Question:

Jennifer,

Our practice isn’t the best at collecting co-pays, and when we do, the cash co-pays collected are sometimes not deposited.  What is our exposure?

Thanks, Susan (Office Manager)

Answer:

Susan, your question is a scary one to voice because clearly there is enormous liability with either scenario you’ve brought to light.  On the one hand, failing to collect co-pays constitutes insurance fraud, while on the other hand, collecting them and not including them in the practice’s deposits (pocketing them) is tantamount to tax evasion (unless the practice is reporting cash amounts at the end of the year).   (For a reminder on why failing to collect co-pays is insurance fraud, click here.)

Especially disturbing is the fact that co-pays are, when push comes to shove, fairly easily identified and trackable should an authorized agency request access to the practice’s books.  Unlike other businesses where a customer may receive a service and cash is taken in without accountability, patients entering a medical practice are required to be documented on many different levels – services provided, pre-approval received where required, HIPAA forms and policies executed and kept on file, medical information maintained, etc.  Failing to document financial info such as co-insurance, deductibles and co-payment amounts leave gaping red flags in a patient’s file.

A common complaint on the co-pay topic is that patients simply won’t pay them or the practice feels they just can’t ask patients to pay co-pays.  Co-pay payment starts with practice policy.  If the practice fails to adopt a co-pay policy, how can the practice reasonably expect to adhere to a co-pay policy.  Further, if the practice has not adopted a co-pay policy, and therefore does not adhere to any such policy, how can the practice expect patients to have an expectation that they will be required to pay co-pays?  So, the first step in collecting co-pays is implementing a “co-pay” or “patient financial responsibility” policy that is promulgated and disseminated to patients.  The second step is training your staff at the front desk to religiously collect co-pays.  Successful practices collecting co-pays often report that its collecting co-pays at the time of check-in, prior to seeing patients that is most effective – while the patient is reaching into their wallet to provide proof of identification or an updated insurance card.

If you would like assistance in creating a policy for your practice or you are concerned you have exposure, email or call me at jennifer@kirschenbaumesq.com/(516) 747-6700 x. 302.

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