Cover Story

Nonbillables: When should patients pay for them?

A debate is raging among physicians about whether to charge patients for services that payers don't cover.

By Ken Terry
Senior Editor

Although many say they'd like to, only a small minority of doctors are charging patients for things like phone calls and photo copying that third-party payers don't reimburse them for.

Bernd Wollschlaeger, a family physician in North Miami Beach, FL, is one of them. He charges $25-$35 for a phone consultation or e-mail consult, $10 for a phoned-in prescription refill, $25-$40 for completing a form, and 50 cents a page for copying records.

Wollschlaeger established this policy about a year and a half ago. "I was upset about the freebies I had to render on a daily basis, which took a lot of time away from patient care. I found it abusive. I had to figure out a way to compensate for the time that I was spending."

About 80 percent of his patients accepted the new policy without question, he says. The rest grumbled, but nobody has left the practice so far.

FP David Bright of Stuart, FL, is thinking about charging for nonbillable services, but he hasn't done it yet. With his costs rising and his revenues stagnant, he expects he'll eventually start losing money unless he can see more patients or find new sources of income. He's concerned, however, about patients leaving if he begins billing them for phone care and other extra services. "It's hard to be out in front. But if you don't do it, you'll slowly starve to death."

In between Wollschlaeger and Bright are many doctors who've started to charge for some "freebies"—usually copying records and filling out forms. Most who've tried billing for phone consults have backed off it because of patient opposition. But physicians have found that some patients are willing to pay for e-mail access, perhaps because it's new and suits their lifestyles.

Meanwhile, the national primary care societies are working on payers to reimburse doctors for nonvisit care, and it looks as if the American Academy of Family Physicians is starting to achieve some results (see "Will payers start reimbursing for nonvisit care?").

We took a look at how doctors deal with this difficult situation, and what they have to take into account.

Is it legal to charge for nonbillables?

Billing patients for nonvisit and administrative services could get you in trouble with Medicare and some commercial carriers.

The Centers for Medicare & Medicaid Services won't allow you to bill patients for telephone or e-mail consults or for refilling prescriptions. These services are considered part of the work you do to follow up on or prepare for an office visit, says a CMS spokesperson. (CMS doesn't object to doctors charging Medicare patients for medically necessary services that it doesn't cover, though. And you can also charge for copying records and filling out forms unrelated to covered care.)

Many commercial insurers won't pay for nonvisit or administrative services, but it isn't always clear whether they prevent physicians from billing members for them. Michael L. Blau is one attorney who thinks that many plans might prohibit physicians from charging an additional fee for administrative work. HMO agreements, for instance, usually state that primary care doctors are obligated to coordinate care and do the associated paperwork, says Blau, who's co-head of the health law department at McDermott, Will & Emery in Boston.

Blau believes that plans can take action to stop doctors from billing their members for nonvisit services, as well. But he hasn't heard of any plans threatening or dropping doctors who charge patients for nonbillables.

An informal survey of several leading insurers yielded ambiguous results. Humana declined to comment on the issue. Aetna said it had no problem with doctors billing patients for noncovered services. But UnitedHealthcare and PacifiCare opposed it.

"There's language in our contracts saying that providers will only bill members for covered services," said a PacifiCare spokeswoman. "E-mail, phone consults, and paperwork are considered noncovered, nonbillable services." While those services aren't specifically stated in PacifiCare contracts, she added, "It's known across the industry that these things are nonbillable."

UnitedHealthcare's position is that services such as telephone calls and copying records "are already included in the base fee for office visits," said a spokesman. "We would not tolerate contracted physicians charging additionally for covered services for which we already compensate them."

Can you get paid for telephone calls?

Some medical leaders vehemently disagree with viewpoints like these. Talking with patients on the phone "is real medical work, and it should be reimbursed like face to face visits," says pediatrician Sandy Melzer, chair of the telephone committee of the American Academy of Pediatrics.

Melzer has two suggestions for doctors: First, keep track of your phone work, using the existing CPT codes, and use your log in negotiations with plans. A few larger groups, he says, have been able to work out fee schedules for phone calls.

In Melzer's opinion, you can safely bill patients for phone work if your contracts specify that the plans won't reimburse you for that. If your agreements don't address this issue, he says, you can negotiate a "contractual disallowance" that permits you to bill patients. The patients should sign a form saying they understand they're responsible for these charges, he adds.

To make billing easier, Miami FP Bernd Wollschlaeger asks patients who want phone consults and administrative services to give his office their credit card numbers in advance. He lets all patients know, when they enroll or come back for a visit, that his practice charges for called-in prescription refills and other "auxiliary services." If they don't want to use these services, they have to make an appointment.

Practice management experts, however, warn of patient backlash. "Patients expect free telephone consults," says Darrell Schryver, a consultant for the Medical Group Management Association. "They just don't accept being charged for that."

Gray Tuttle, a consultant in Lansing, MI, doesn't know of any practices that bill for phone consults, but one group that experimented with charging for phone refills had to back off, he says. "There's a natural reluctance to bill patients for this," he adds. "One reaction is, 'If we don't do this in a proper way, we'll come across as money-grubbing, price-gouging doctors, and people will stay away from us.' "

In contrast, physicians who've made the leap to e-mailing with patients are often prepared to charge them for the privilege. Some practices levy a flat monthly or annual fee. Others are using services like Medem, RelayHealth, and HealthyEmail, which charge patients up to $25 per e-mail, take a small piece, and remit the rest to the doctor.

GP Liza Shiff of San Jose, CA, says that her use of Medem's e-mail service has reduced the pressure on her staff. "The phone doesn't ring as much, leaving more time for the front staff to do their work and pick up new-patient phone calls. Meanwhile, the Medem checks are slowly rolling in, minus the hassle of collections."

Some commercial carriers are also experimenting with reimbursement for e-mail. Insurers are more likely to pay for that than for phone care, says attorney Blau, because they can easily obtain documentation of the exchange.

Refills: a hard line or a soft sell?

One of the biggest drains on staff and physician time are phone requests for prescription refills. A few physicians like Bernd Wollschlaeger now charge for nonvisit refills, while others won't provide them outside of a visit.

The internal medicine department of Mid-Michigan Physicians in Lansing, MI, used to have two full-time people answering phones, and a large portion of their time was spent on refills. Now the 11 internists tell patients to ask for refills when they're at the office. If they don't, says internist Fred Isaacs, they have to come in and pay for an extra nurse visit. "It really changes people's mindset," he says. "They pay attention to when their meds are due to be refilled. We've been able to eliminate two employees by doing that."

The best way to achieve a balance between excessive follow-up visits and becoming a "phone practice" is to have patients return at medically appropriate intervals, notes David Scroggins of Clayton Scroggins Associates in Cincinnati. Decide how often patients should come in for optimal care, advises Scroggins. If they come in that frequently, he says, your office will get fewer refill calls.

Forms, copying, and no-shows generate the most activity

The majority of physicians we contacted charge for completing some, but not all forms. Pediatrician Allen Schwartz of San Diego, for instance, doesn't bill patients for simple forms like those required for camp, school, and sports participation. But his practice charges $35 for more complex tasks such as an eight-page college entrance medical form that takes 15 minutes to complete. Some internists and family physicians charge approximately $20 for filling out disability insurance forms, but do other forms for free.

Other doctors bill patients for filling out sports, disability, and Family Medical Leave Act forms only if they have to be completed prior to a visit. Otherwise, they do it as part of the visit; a few practices even bring patients in just to do their paperwork, and bill them for a level 2 or 3 visit.

However they charge, many doctors no longer view filling out forms and copying records as an integral part of an office visit. Internist Bing Ko of Medford, MA, charges $10 to $75 for these tasks, based on the following formula: 25 cents a page to cover paper and equipment costs, $15 an hour of staff time, and $150 an hour of physician time.

Fearing they'll offend patients, some physicians charge only a nominal amount for copies or forms. But even that may be too much in some communities. Pediatrician Adam Stuart of Miami says, "A few area pediatricians charge $5 per form. How do I know? The irate parent who was asked to pay the fee subsequently left that physician's office, and the kids are now my patients."

Other doctors feel it's an imposition to ask patients for these extra fees. "Patients already have to pay high copays, they can't afford their medications, and I feel uncomfortable asking extra for things I've always done for free," says internist Cindy Levine of Belmont, MA.

FP Richard Sagall of Philadelphia says, "One pet peeve of mine is physicians who charge their patients for completing forms required by pharmaceutical patient assistance programs. These patients can't afford to purchase their medicines. If their doctor won't help them by completing the forms, all the medical care and advice the doctor provides is an exercise in futility."

FP Jim Martin of San Antonio, president of the American Academy of Family Physicians, believes it's wrong to ask patients to pay for complex forms—like FMLA or disability forms—that other parties require them to complete. "I don't feel comfortable charging a disabled patient $50 for these forms. It wasn't the patient who asked for them, it was Social Security. My feeling is that whoever asks for these forms—whether it's the employer or the government—has a responsibility to say, 'We're going to cover your time on this.' "

No-show charges are also starting to become more common in medical offices. However, many doctors are fairly lenient. Some charge a patient only after the person fails to show up two or three times. FP David Schechter of Los Angeles has a $50 no-show fee that he sometimes waives for a good patient.

Consultant Darrell Schryver feels that charging for no-shows is unethical, "because no services were provided." If your no-show rate is above 6 to 8 percent, he suggests, you can reduce it by calling patients before they come in and following up with letters.

You may try to get compensated for nonbillable services, but don't annoy your patients by nickel-and-diming them, says consultant David Scroggins. "The physician's got to be careful that his resentment and irritation with the insurance carrier doesn't cause him to initiate an action that's resented by his patient. The physician is the one who signed the agreement with the insurance carrier."

Also remember that charging patients for nonbillables isn't the way to go about solving your cash-flow problems. "The amount of dollars you could potentially realize is small compared to the kinds of difficulties you could create for yourself in the process," says attorney Steven I. Kern of Bridgewater, NJ.

Will payers start reimbursing for nonvisit care?

Specialty societies are putting pressure on Medicare and commercial payers to compensate doctors for telephone and e-mail work. The American College of Physicians recently called for reimbursement for nonvisit care, and the American Academy of Pediatrics has formed a committee to investigate how doctors can get paid for phone care.

The American Academy of Family Physicians has had discussions with both CMS and private payers about compensating physicians for nonvisit care. AAFP President Jim Martin, a family physician from San Antonio, says the society has proposed that government and private insurers pay doctors a set fee of $3 to $5 per member per month to cover the time and expense of communicating with patients by phone and e-mail. Most payers are amenable to the idea, he says.

"They think the family physician's ability to have that communication without bringing the patient in for an office visit saves money and improves health outcomes," he notes. "So they want to find some way to reimburse for this."

While physicians have long provided phone advice for free, notes John Dumoulin, director of practice advocacy for the ACP, the amount of phone calls from patients has steadily increased over the past 10 years. "People are demanding more care over the telephone or by e-mail. So we think the traditional method—which is to bundle it all into the E&M charge—doesn't solve the problem anymore. It's an antiquated policy that doesn't really reflect the fact that the face of ambulatory care has changed."

Ken Terry. Nonbillables: When should patients pay for them?

Medical Economics

Nov. 21, 2003;80:58.