Late appointment cancellations and missed appointments are common. Unfortunately, patient actions affect physicians and patients in multiple ways. The patient is not receiving the medical treatment he or she needs, another patient who requires medical treatment is unable to take that appointment slot, and the physician’s office loses money because it cannot charge for services the physician would have otherwise rendered during that appointment.
No payer reimbursement
There is no Current Procedural Terminology code for late cancellations or missed appointments. When a patient does not cancel with adequate notice or fails to show for an appointment, payers, both government and commercial, refuse to reimburse because they do not consider it a medically necessary or covered service. In other words, a no-show falls outside the umbrella of what payers will reimburse, leaving the practice holding the bag.
While payers may not reimburse for no-shows, they also often do not prevent physicians from imposing financial penalties. Unless the physician has entered into a contract with a payer that prohibits late cancellation or no-show charges, the patient can be held directly liable if certain conditions are followed. Under CMS guidelines, Medicare also allows a no-show fee (assuming there is no contract that says otherwise) if the practice follows the rules.
Although each payer may have its own guidelines (which is why it is important that physicians look at each contract), most have the same basic requirements.
The terms of the guidelines govern the circumstances under which a patient can be billed. For example, the practice may state that it can charge patients who cancel with less than 24-hours’ advance notice, or that showing up more than 30 minutes late can result in a no-show and a bill. Patients, however, must first be advised of the rules and, significantly, must sign an agreement whereby they explicitly consent to financial responsibility.
How much to charge?
The amount of the fee is left to the physician’s discretion, but it is important that the charge reflect a missed business opportunity, and not the amount the practice would have received had the patient not canceled or missed the appointment. Practices should also ensure that their no-show policy is consistent for all patients, regardless of the patient’s payer, and the dollar amount should be contained within the signed patient agreement. It is also good practice to document in the patient’s file any no-show instances to support the billing.
Written policy essential
Practices must provide a written policy that requires the respective patient’s signature prior to rendering services and (1) advises patients that their insurer or CMS will not cover late cancelations, missed appointments, or late arrivals because they are not covered services; (2) makes clear that by signing the agreement, the patient is consenting to financial liability for missed or late appointments; (3) explains that missed or late appointment charges are reflective of a missed business opportunity (e.g. “When you do not show up for a scheduled appointment, you are taking an appointment slot that could have been used for another patient.”); and (4) specifies what the cancelation fee will be (e.g. $40 or $70).
Actually billing the no-shows or late arrivers is a powerful behavior tool that can reduce headaches while capturing what would otherwise be lost revenue.
Andrew H. Selesnick is a Shareholder in Buchalter’s Los Angeles office, and is a member of the Firm’s Litigation and Health Care Practice Groups. He is also Chair of the Health Care Litigation Practice Group. He can be reached at [email protected].
Gemma Karapetyan is an Attorney in Buchalter’s Los Angeles office, and a member of the Firm’s Litigation and Health Care Practice Groups. She can be reached at [email protected].