Can a physician’s office charge interest on late payments?
Yes, a physician’s office is able to charge interest, up to 1 percent per month or 12 percent annually [9 V.S.A. 41(a)]. A statement should be included in every bill that the office sends disclosing that the office plans to charge interest on late payments and the amount that will be charged.

What types of debt collection practices are prohibited by state and federal law?

What should a physician know about using a debt collection agency?
To reduce the administrative burden on the practice, a physician may decide to use an outside debt collection agency to help collect debts from patients. There are additional federal guidelines that cover debt collection agencies. Physicians who use such agencies should be familiar with these rules.

Debt collection agencies must follow all of the rules described above. Additionally, they must send the patient a written notice within 5 days of initial communications regarding the debt that describes the amount of the debt, the name of the creditor, and what action to take if the patient does not believe that he or she owes the money. Debt collection agencies also may not:

What can happen if a physician violates these rules?
Engaging in any of the prohibited actions described above is considered an unfair act in commerce under Vermont law and the Attorney General’s Office is authorized to pursue court action to stop the practice. The Attorney General Office’s may also request that a court assess civil penalties and/or reimbursement to the patient and state. The Federal Trade Commission has additional enforcement authority over collection agencies provided by the Federal Fair Debt Collection Practices Act.

Can I bill my patients for missed appointments?
Physicians cannot bill public or private insurers for services that were scheduled, but not actually provided. Therefore, the question left to physician practices is whether they can bill a patient directly for a missed appointment.

American Medical Association (AMA) policy states that physicians can bill for missed appointments if certain standards are met. According to ethical opinion E-8.01, “A physician may charge a patient for a missed appointment or for one not cancelled 24 hours in advance if the patient is fully advised that the physician will make such a charge.” The policy must be made clear and must be applied impartially to all patients. The AMA also encourages practices to only assess “reasonable” finance or service charges (policy E-6.08) and Vermont Statute holds “gross overcharging” to be unprofessional conduct [Title 26, Section 1354 (a)(16)]. Charging a missed appointment “fee” would be less likely to be interpreted as violating balance billing policies.

The question has slightly different implications for physicians who would have billed Medicaid for the appointment versus billing other insurers or the patient directly. The Office of Vermont Health Access (OVHA) Provider Manual states, “federal Medicaid policy does not permit providers to bill Medicaid or beneficiaries any fee for missing a scheduled appointment.” Billing a beneficiary for a missed appointment that your practice would have billed to Medicaid is considered violation of the Medicaid provider agreement and could be grounds for sanctions.

In sum, Medicare and private pay patients may be directly assessed a reasonable fee for missed appointments, if the office publicizes and universally applies such a “no-show” policy.

What am I allowed to charge patients, or others such as lawyers and insurance companies, for providing copies of a patient’s health care record?
Both Vermont statute and the HIPAA Privacy Rule address what physician offices are allowed to charge for providing copies of a patient’s health care record. In sum, you are allowed to charge a reasonable cost-based fee, not to exceed $.50 per page. If the patient agrees, you may also charge for postage or for the preparation of a summary. You are required to provide an itemized bill to the recipient of the record.

Vermont law [18 V.S.A. § 9419] permits a practice to charge a fee that is no more than a flat $5.00 fee or $0.50 per page, whichever is greater. The office is also required to provide the patient, or authorized recipient of the record, with an itemized bill for the charges assessed.

The federal HIPAA Privacy Rule [§164.524(c)(4)] permits offices to charge a reasonable, cost-based fee for copying a patient’s medical records. The fee may include only the cost of copying, including the cost of supplies, equipment lease, and labor for copying the records requested. The fee may not include charges for searching for the record or reviewing the record in connection with copying it.

Your office must follow whichever fee is less. For example, if your office’s reasonable cost-based fee of copying the records is less than the Vermont allowance of $.50 per page or $5.00, you must charge the reasonable cost-based fee for the copies. On the other hand, if the actual cost of providing copies exceeds the amount permitted by Vermont law, you are capped by the Vermont allowance and can charge no more than the greater of $.50 per page or a $5.00 fee.

If the recipient of the record has requested that the records be mailed, the HIPAA Privacy Rule allows you to charge postage in addition to copying charges. You may also charge for the preparation of an explanation or summary of a record, in lieu of the full record, if the recipient has agreed in advance to receive an explanation or summary and if he or she has agreed in advance to the fees. You should document in the patient’s record if he or she has requested that the record be mailed, or has agreed to have the record summarized.

Vermont law prohibits any charge for copies of records needed to support a claim or an appeal for public benefits such as welfare, Social Security, Medicare or Medicaid; this stands under the HIPAA Privacy Rule.

Vermont law allows physician offices to charge a cost-based fee for providing copies of x-rays, films, models, disks, tapes or health information maintained in other formats. This provision is consistent with the HIPAA Privacy Rule.

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Is there a limit to how long an insurer can take to reimburse a claim?
Under Vermont law, any health insurer has 45 days from the time of receipt to either pay a claim or to notify the claimant in writing that the claim is contested or denied. The notice must include specific reasons and a description of additional information required to determine liability. Once the additional information has been supplied, the health plan then has another 45 days to complete consideration of the claim.

What happens if the insurer fails to either pay the claim or provide a notice within the 45-day timeframe?
If the 45 days have passed and the insurer has failed to pay, then the claimant may begin to charge interest at a 12 percent annual rate. The interest may begin to accrue starting:

Are there any cases where the 45-day timeframe or the interest charges do not apply?
If a physician has negotiated specific payment terms in a contract with an insurer regarding interest for late payment or the type of notice the plan is required to provide, those specific terms will govern the reimbursement process between the physician and insurer.

In rare cases, the commissioner of BISHCA may suspend the accrual of interest if failure to pay is deemed to be the result of a major disaster, act-of-God, unanticipated computer system failure, or if the health plan’s solvency is at risk.

These rules apply equally for workers’ compensation cases with the additional requirement that the insurer notify the Department of Labor regarding contested claims. Interest and penalties may be assessed by the commissioner of labor.

What can a physician do if a claim dispute is unable to be resolved or if an insurer repeatedly ignores or violates the 45 day timeframe?
Any dispute arising out of payment of a claim or interest on a claim may be settled by arbitration at the request of either party. The arbitrator’s decision may be entered in any court having jurisdiction.

In the event a health plan engages in a pattern of violating the law regarding the timely reimbursement of claims, the commissioner of BISHCA is authorized to levy a civil penalty (up to $500 per claim). Health care providers who experience timely payment problems can send a complaint to the deputy commissioner for health care at BISHCA.

What requirements are there in order to get reimbursement from Medicaid?
According to the OVHA Medicaid Provider Manual, in order to receive reimbursement from Medicaid, the following conditions must be met:

Who is responsible for verifying that the patient is eligible for Medicaid?
Health care professionals are expected to verify eligibility for every beneficiary prior to providing the service or item to clarify who has financial responsibility for the service. Eligibility can be verified up to nine days in advance. Eligibility can be verified through the POS/swipe box, the automated voice response system (Malcolm), on-line Transaction Services (vtmedicaid.com) or by calling the provider services help desk. When an eligible aid category code is given, the provider should determine that the service to be provided is covered within that aid category. This will also show what other insurance is on file. To ensure timely processing of a claim, validate other insurance with patient or refer them to the Department of Children and Families.

Can I limit the number of Medicaid patients I see?
Yes, physicians may limit the number of Medicaid patients they accept since the physician-patient relationship is consensual. A physician is under no obligation to accept patients against his or her medical or business judgment. However, in limiting the number of Medicaid patients, a physician may not abandon patients with existing medical conditions and should be cognizant of possible hospital or contractual requirements to treat Medicaid patients. Under the terms of the Medicaid provider agreement, participating health care providers can be selective in the number of patients they see and which patients they choose to serve so long as the do not discriminate on the basis of race, creed, color, national origin, sex, marital status, sexual orientation, or disability/handicap.

Must I bill Medicaid for all services I provide to my Medicaid patients if I am a participating provider?
No, if you inform your patient that you will not bill Medicaid for a particular service and will instead bill the patient, and the patient accepts responsibility for the payment, you may bill the patient instead of Medicaid for that particular service. The OVHA Form 287 (Provider Notification to Recipients) is the form to use when you choose not to participate in Medicaid for a particular service.

May I bill a patient for all or part of my charge for a service if I have also billed Medicaid?
You may not balance bill a patient for a service that you have billed Medicaid for unless:

What if I decide to stop participating in the Medicaid program?
Should a physician decide to disenroll from the Vermont Medicaid Program, the physician should adhere to the following procedures:

Are there legal requirements with respect to adequacy of Medicaid reimbursement?
Yes, under federal law, states must “assure that [Medicaid] payments are consistent with efficiency, economy, and quality of care and are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.”

Reimbursement from Public Insurers -- Medicare
Physicians may choose among varying degrees of participation in the Medicare program. Higher levels of participation offer more generous benefits to the physician but also place more restrictions on how the physician may be reimbursed for services rendered to Medicare patients:

How does a physician become a participating provider or change status to a non-participating provider?
In order to become a participating provider, the physician must complete an agreement form (Form CMS 460) and submit it to each carrier to which the physician plans to submit Part B claims. All Medicare carriers have an open enrollment period at the end of the year (generally November). It is during this period that a participating provider may decide to become a non-participating provider, or opt-out entirely by not re-enrolling with a carrier.

What is Medicare “balance billing?”
Balance billing is the practice of charging Medicare beneficiaries more than the fee schedule established by the United States Secretary of Health and Human Services, either for a participating or non-participating provider. This practice is prohibited by state law, although 33 V.S.A. 6503 does offer some exceptions. If a physician feels that he or she needs to charge Medicare beneficiaries more than the 115 percent cap allowed to a non-participating provider, the physician must opt-out of Medicare entirely and may then enter into a private contract with the patient.

What are the drawbacks to opting out of Medicare?
If a physician opts-out of Medicare, he or she may not submit any claims to Medicare for any patient for a period of two years. A physician may not treat any Medicare beneficiary during that period without entering into a private contract (with an exception made for emergency situations). Medicare places strict conditions on the nature of the contract that a physician may enter with a Medicare beneficiary and an affidavit must be filed with the relevant carrier as well. It is recommended that a physician who has opted out of Medicare consult with a lawyer before entering into a private contract with a Medicare beneficiary.

Are there any other balance billing requirements?
Vermont law requires that physicians who treat Medicare patients post in a conspicuous place in their offices a summary of the balance billing rules that is prepared by the Department of Aging and Disabilities and distributed by the Secretary of State’s Office. Failure to do so may result in a $50 fine.

Resources

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About the Author & Editor

Chesley Thurber worked for the Vermont Medical Society in 2006 as a policy specialist. He supported VMS's policy efforts on several issues including mental health, tobacco use, and the implementation of the Medicare prescription drug program. Before joining VMS, Chesley graduated from Middlebury College in 2004, and worked in legislative affairs for United Parcel Service in Washington, D.C. He currently works as the legislative aide to Vermont Senate Pro Tem Peter Welch.

Madeleine Mongan is counsel and vice president for policy for the Vermont Medical Society, representing the interests of the physicians who live and practice in Vermont. She works with the Vermont Legislature, state agencies and insurers on health care policy and provides education and technical assistance to Vermont physicians on legal issues. Her practice addresses a range of health law issues including confidentiality, licensing, managed care, public health, contracting, and fraud and abuse. She represents Vermont physicians on the steering committee of the Vermont Bar Association Drug Policy Committee, the Area Health Education Centers Advisory Board, and the Vermont Health Resource Allocation Plan Board. She is a member of the American Health Lawyers Association and the Vermont Bar Association where she co-chairs the Health Law Committee. She received her B.A. from the University of Delaware, M.A. from Stanford University and J.D. from the University of California at Davis.

Resources

18 V.S.A. 9419 http://www.leg.state.vt.us/statutes/fullsection.cfm?Title=18& Chapter=221&Section=09419

Resources

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About the Author & Editor

18 V.S.A. 9419
http://www.leg.state.vt.us/statutes/fullsection.cfm?Title=18&
Chapter=221&Section=09419