Collecting full payment at time of service for patients with managed care coverage

I recently received a call from a client asking if they can begin charging all patients at the time of service and refunding the patient’s payment when insurance payment is received.  This would only apply to those patients with managed care policies. They are aware that they can’t collect more than the fee schedule or allowed amounts from patients and that some contracts prohibit collecting from the patients at all.  They have created complex fee spreadsheets that the front desk staff can use in collecting payment and have a letter ready to go out to all their patients notifying them when this will take affect. The practice is asking will they run in to trouble.

Unfortunately, most contracts forbid the physician from collecting anything other than the co-pay, co-insurance or deductible from the patient based on the language noted below.  Almost every payor contract has language similar to this in it.  I haven’t seen it tried yet, and I doubt the payors would agree to it, but you could always try to negotiate a change in the language.

1.1 Copayments, Coinsurance and Deductibles.
Provider may charge Participants applicable Copayments, Coinsurance and Deductibles in accordance with the process set out in the Administrative Guidelines.

1.2 Limitations On Billing Participants.
Provider shall not bill, charge, collect a deposit from, seek compensation, remuneration or reimbursement from, or have any recourse against Participants or persons other than the applicable Payor for Covered Services or for any amounts denied or not paid under this Agreement due to Provider’s failure to comply with the requirements of _______’s or its designee’s Utilization Management Program or other Administrative Guidelines, failure to file a timely claim or appeal, or due to the application of the Payment Policies.  This provision does not prohibit collection of any applicable Copayments, Coinsurance and Deductibles.  This provision survives termination of this Agreement, is intended to be for the benefit of Participants, and supersedes any oral or written agreement to the contrary now existing or hereafter entered into between Provider and a Participant or persons acting on the Participant’s behalf.  Modifications to this section will become effective no earlier than the date permitted by applicable law.