Money matters: minimising bad debts and maximising satisfaction

Jun 8, 2017

We sometimes receive calls to our Medico-legal Advisory Service (MLAS) from members for advice about obtaining informed financial consent from patients. This can help to minimise the need to chase patients for unpaid fees for services they received, which can take up an enormous amount of time and energy.

It’s also important to note that issuing requests for patients to pay outstanding fees can often result in patients making a complaint to a regulatory authority.The time and resources spent dealing with the complaint can in some cases exceed the amount of the unpaid fees. Therefore, it’s preferable to avoid these situations altogether.

The good news is there are a number of strategies doctors and practices can employ to minimise the number of patients who don’t pay their fees.

Informed financial consent

The first step is to think carefully about the information you provide to patients before they decide and consent to treatment.In a well-run practice, considering finances and informed financial consent from both the doctor’s and the patient’s point of view is as important as informed consent for treatment. Before they commit to the procedure, all patients should be advised in writing of the fees that they will be liable for if consenting to a certain procedure. The written quote should include the following:

  • Your fee for the treatment/procedure – this should be as accurate as possible given your expertise in terms of technicality and associated charges. Any known risks, for example, complications that might occur, should be stated and where possible, the estimated impact on fees.
  • A statement acknowledging other fees – the patient should be aware that they will have to pay hospital fees (or, at least, possibly part pay depending on their private health insurance), the anaesthetist’s fees, costs for prostheses or equipment, pathology fees, radiology fees, and possible allied-health fees, in addition to your fee. You do not have to accurately specify the amount of these fees, but acknowledge that they exist and indicate how the patient can find out exactly what will be payable.
  • If you have another doctor acting as surgical assistant during your procedures, you should always inform the patient that there will be another doctor present, and the billing arrangements that will apply. It is important to note that MBS regulations require patient consent for bulk-billed medical services which would include surgical assistance.
  • An indication regarding the contributions from Medicare and/or a private health fund toward the fees and how to determine what gap (remaining fees) there will be after these contributions.
    Most practices will have systems that identify the benefit the patient will receive from private health funds and Medicare prior to a procedure.
  • A statement that extra fees may be payable if the patient requires additional procedures. Patients may be more receptive to these extra fees if they are charged at the Medicare rebate level or a no gap health fund amount. Especially, if the additional procedures and hence fees, relate to complications from the initial procedure.

Minimising the cost when complications occur

Another strategy is considering reducing the cost to the patient when complications occur.Some practices have an internal policy that the practice will refund the gap paid by the patient if things do not go as expected.However, this strategy should only be employed with a statement that it is practice policy to do this so that it’s not seen as an admission of liability.

Avant recommends that any additional treatment or revision surgery that is required due to a complication should not put the patient out-of-pocket. This may require liaising with colleagues and requesting that further treatment be charged at refund amounts only.

Rewarding payment upfront

Requesting payment upfront ensures that where possible any gap payable by the patient is paid before the procedure is performed.

It’s also a good idea to consider rewarding patients who pay upfront and to encourage respectful behaviour in terms of fee payments. Sometimes, even a small discount for early payments can make all the difference and lead to more patients paying upfront and on time.

Greater fees, greater patient expectations

It may sound obvious, but the greater the gap/fees the patient must pay, the greater the expectations from the patient.Therefore, keeping the gap/fees as low as possible is likely to reduce the possibility of a patient not wishing to pay the fee, even if a minor complication occurs.

Drawing a line in the sand

Sometimes cutting your losses and not pursuing unpaid fees in situations where you are aware that the patient is unhappy about the service or a complication has occurred is the best strategy. As noted above, the cost to you and the practice in terms of the time and resources required to deal with a complaint can far exceed the amount of the unpaid fees.

Patient feedback mechanism

Implementing a good feedback process in your practice (both from GPs, as well as patients) to establish how your patients perceived the service they received (including fees), can also be very useful. The insights can be used to improve practice management processes in terms of setting fees, the consent process and recovering outstanding fees.

Key lessons

  • Provide sufficient patient information regarding the procedure and fees to ensure the patient has provided informed financial consent prior to having the treatment or procedure.
  • Minimise costs to the patient when complications occur.For example, refunding the gap paid.
  • Ask patients to pay fees upfront and consider rewarding early payments to encourage fees to be paid upfront and on time.
  • Understand that the more the patient pays, the more they expect from the service they receive.
  • Consider not pursuing unpaid fees if the patient is unhappy about the procedure or a complication has occurred.
  • Use feedback processes to review and improve your practice strategies.

More information

For more advice on this issue, visit our website or if you require immediate advice, call Avant’s MLAS on 1800 128 268.

Share your view

We welcome your feedback on this article – email the Editor at: editor@avant.org.au