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    A Revenue Lifeline
    to Stay Afloat as Costs Rise

It's an understatement to say that it's a tough time to be a physician in the United States.

Malpractice insurance rates are skyrocketing. Managed-care companies are cutting reimbursements - while at the same time, pushing physicians to see more patients. Patients are demanding a higher

Violating Government and Commercial Insurance Contracts

    The U.S. Office of Inspector General (OIG) issued a warning to physicians about charging Medicare patients additional fees for already-covered services.
    In the 2004 notice, however, the OIG stated that doctors can charge beneficiaries "extra for items and services that are not covered by Medicare."
   The OIG cited an example of a physician who violated his Medicare agreement by asking patients to pay $600 annually for a "Personal Health Care Medical Care Contract."
    In return for this fee, patients received longer appointments, comprehensive physicals, coordination of care and other services. The OIG argued that many of the services included in the access fee were already covered by Medicare payments.
    The physician agreed to pay a settlement amount to OIG and to stop offering the contracts to patients.
    Medicare is not the only insurer taking issue with access fees. Some insurers, such as Harvard Pilgrim Health Care, based in Massachusetts, have decided to no longer contract with physicians who charge access fees. The decision came after some patients complained they couldn't afford them.
    Still, many practices have found that they can successfully charge access fees if they deliver additional services. For example, a Washington state insurer allows its contracted physicians to charge access fees as long as the fees are for value-added services that are optional.
    Keep in mind that state and federal lawmakers and insurance agencies are evaluating access fees and may be less tolerant in the future.

level of medical care, which can include everything from more face time to telephone consultations 24 hours a day.

All these financial pressures have some medical practices searching for ways to earn more money for the work they do. Some doctors have hit upon a simple, yet controversial, formula for increasing revenues - charge patients directly for services that aren't being reimbursed by insurers.

A-La-Carte Fees

These so-called "access fees'' include charges for responding to patient telephone calls and e-mail messages, renewing prescriptions, copying records, and filling out extra summer camp and school physical forms. They can range from a one time fee of $5 to $50 to a monthly or an annual fee totaling several hundred dollars.

A small number of physicians are taking the concept further and charging several thousand dollars annually for retainer-based or "concierge" medicine that provides longer office appointments, house calls, same day appointments, extensive annual physicals and more.

Some patients don't object to access fees. They see them as an acknowledgment of the growing financial bind that doctors find themselves in. The cost of operating a multi-specialty practice has been climbing in recent years, while total revenues are failing to keep pace, according to a study by the Medical Group Management Association. And the federal government has also cut physician reimbursements under the Medicare program.

Doctors contend that charging access fees is justified because of the industry's financial woes and the fact that the average physician spends hundreds of hours a year handling unreimbursed requests. The fees merely compensate physicians for their time and put the burden of paying for such services on those patients who request them.

The Downside of Access Fees

However, there are some legal and practical issues involved in setting up an access-fee system. First, there's the risk of losing patients who object to paying for services that had been provided free in the past as part of the practice's customer-service efforts.

Also, some insurers take a dim view of doctors under their plans charging additional fees. Commercial and government payers contend that many of the services doctors believe should be subject to the fees are already covered by payments for other services, such as office visits. Such ``bundled'' services can't be broken out for separate charges, insurers contend.

For example, most health plans prohibit the doctors they contract with from charging patients for phone consultations. The health plans consider such services to be covered with office visit charges. The government Medicare program has long prohibited participating doctors from billing patients for refilling prescriptions under the bundling theory.

The rules governing what is covered in bundled charges vary from insurer to insurer and should be ascertained by having an attorney review each health plan contract, as well as state law. Managers should also contact managed-care companies directly to find out what charges are specifically covered under the office visit billing code.

Some physicians have used the trial-and-error method to ascertain what kinds of fees are acceptable to payers. For example, doctors who charge $5 to refill a prescription by phone have been warned by insurers that such fees violated their contracts with the plan. Insurance company officials have urged doctors to require that patients schedule appointments in order to get prescriptions refilled, so that an office visit charge could be billed. That office visit charge, of course, is several times the $5 fee.

Since access fees can provide a significant revenue stream for medical practices, it's important to set up a system to efficiently collect them. The first step is to find out what fees insurers are likely to allow. 

Heads Up

If you decide to go forward with a new fee schedule after weighing all the legal, regulatory and other issues involved, let your patients know what's coming in advance. Send out a mailer explaining the reasoning behind the fees and when payment is expected. Have all patients read the new policy as part of your check-in procedure and post a copy of the fee schedule prominently at your front desk or in the waiting room.

Be careful how you handle patients who cannot pay the fees. Above all, deliver the services promised in return for the fee. Most patients don't want to switch doctors and might be willing to pay a little more for better care. But nothing can kill a practice's reputation quicker, or generate legal action faster, than a failure to respond to a request for medical services.

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