Advise clients up front that claims are their obligation
Question: Recently a workers’ compensation insurance carrier denied payment for multiple visits on one patient. This patient was seen about eight times and released to full duty after an apparent work-related injury. About one month after release, we were notified the carrier had declared the condition nonwork-related. We didn’t know the work relatedness of this case was ever in doubt until receiving the letter. The patient has no general health insurance and has not made payment on the bill.
With a tight budget for our clinic, situations like this are very frustrating. How much financial responsibility should the employer and insurance carrier bear when they send me a patient for treatment? I believe it is unfair for my clinic to assume total liability in such cases, but how can I resolve this with employers?
Answer: Your question struck home with the Occupational Health Management board members consulted for advice. They’ve all been frustrated by the same situation you describe.
Pat Stamas, RN, COHN, president of Occupational Health and Safety Resources in Dover, NH, says she has faced this situation many times, especially in a previous position when she was director of a hospital-based occupational health program. Her initial reaction was to just write off the bad debts as uncollectible and consider the loss an unfortunate part of providing occupational health care. But the amount of the bad debts soon became intolerable, so her program hired a collection agency. New Hamp-shire law specifies that the injured worker is ultimately responsible for paying the medical bills, so the collection agency was a reasonable response after the insurer refused payment.
"But we soon realized that the return from the collection agency was minimal," Stamas says. "It turned out not to be worth the effort and expense."
Instead, Stamas tried a different tactic. She began adding a clause to the contracts her program used that made the employer responsible for all medical costs when treatment had been provided already but the insurance claim was denied. In her experience, most employers agree to take on that responsibility once you explain that you are providing immediate treatment to their workers on good faith, trusting that either the insurer or employer will pay. And since employers already are motivated by financial concerns to avoid sending non-occupational injuries to you for treatment, they generally understand that their risk of liability is low.
To further reduce the chance that you could be left holding the bag, Stamas says there also is the option of requesting a "retainer" from the employer who is new to your program. Similar to a retainer given to an attorney, the employer posts a sum of money, which is held by the occupational health program for use in covering uncollected debts. She notes this option is a bit more aggressive than simply asking the employer to agree to pay denied claims but explains it is a reasonable option if you have a particularly bad history of denied claims and uncollected debts.
However, the likelihood of getting clients to provide a retainer is questionable. Melissa Tonn, MD, MBA, MPH, medical director of occupational health services at Memorial Hermann Healthcare System in Houston, says a retainer would solve much of the problem, but she doubts many clients would agree to provide one. Instead, she advises clients upfront that they are responsible for paying for visits to her clinic if the workers’ comp carrier does not cover the debt. Some small companies resist the idea, she says, but most larger companies understand they must pay when they authorized the clinic visit.
"We’ve seen this problem most often with first or second visits, when the employee is being sent over to determine if the injury is work-related," Tonn says. "We don’t bother trying to get the bill paid by the employee because that’s just like trying to get blood from a turnip."
(For more information, contact: Pat Stamas, Occupational Health and Safety Resources, 1515 Surrey Run, Dover, NH 03820. E-mail: [email protected].)
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