Effectively collecting copays (or coinsurance for procedures) has become much more important in recent years. One reason is they’ve become a much bigger proportion of total reimbursement. Once just a token $5 or $10 payment, office visit copays have increased to $30, $40, or even $60 in many cases. They now often account for a third or more of the revenue your practice can receive for these services. Not collecting them reliably is a threat to your profitability.
Besides ensuring full reimbursement, there’s another, equally compelling reason for your practice to master time-of-service copay collections: Your payer contracts almost certainly require it. If you’ve been in the habit of waiving copays, or even billing for them, you are probably violating these agreements.
Health plans view copays differently than you probably do. Copays are not just a way to reduce their portion of your fees; they’re designed to discourage patients from receiving services they don’t need. Copays are supposed to help keep patients on the side of the payer in the battle to reduce costs. That’s why your contracts will usually state that you agree to collect them, and often further state you should do so at the time of service. (Some waivers may be allowable, but only when certain hardship conditions are verified.)
Contracts also often contain language about the plan being entitled to the same discounts you give other parties — so that if you give the patient a discount by waiving any amount they owe, you need to give the plan the same discount. (This might mean you owe the plan 100% off if you waived a patient’s full copay!)
For these reasons, waiving copays routinely can lead to serious problems in the event your practice is audited. If your practice frequently waives these payments — or if some of your clinicians choose to — it’s important to get everyone up to speed on why you need to collect as you’ve agreed to in your contracts.
I’ve written quite a few papers recently on front office technology that can help you collect more easily and reliably, while keeping the focus on patient service. (Finally, a technology trend that can make something easier for practices!) If you haven’t seen them before, I encourage you to start with this piece, which will direct you to others on specific solutions. These tech tools are so revolutionary and beneficial for your practice, it’s time to check them out if you’ve been sitting on the sidelines.
I also encourage you to check out a very powerful cautionary tale shared by healthcare attorney Mark Weiss on his blog. He describes how a network of ambulatory surgery centers (ASCs) lost a $37 million judgement to Aetna (!). The ASC group’s routine copay waiving helped their opponent win. Definitely a worthwhile read.