One-time Payments (or Schedule Pay) and Health Fund Claims

Here is a common scenario in practice:

Patient accepts a $3000 care plan over 1 year – 60 adjustments at $50 per adjustment. If the patient makes a one-time up front payment, they get a discount – let’s say it’s 50% to make our maths easy – so they pay $1500.

The practice will then bill the first 30 adjustments at $50 and the remaining 30 at $0.

But then the patient can only claim the first 30 adjustments and not the second 30 from their health fund. If the patient’s fund clocks over into the new payment year during this second half, there is a lot of benefit the patient cannot claim. What can you do?

If that’s the case, you have a several options.

1. You can go in and edit his record after each adjustment after some arbitrary amount and set the discount to zero. But… this is a lot of work and you must not make any such changes after you have generated an insurance report. The reason is this: if you produce another insurance report which does not match the first and the patient submits both to claim, the insurer is likely to detect the discrepancy, label it fraud, and your practice can be black-banned by that insurer and the doctor reported to the board. We’ve seen it happen and it’s ugly. Please don’t do this.
2. You can make your care programs shorter so they naturally reset. e.g. instead of 12 month programs do 6 month. As all health funds reset on a 12-monthly cycle (some at membership date, some at calendar new year, some at financial new year) by doing this you will allow the patient to claim more. But then your patient is making a shorter commitment and the benefit to their health is naturally less.
3. Tell the patient there is nothing you can do but… they will get to claim their next program from their fund. Ultimately most patients will claim their limit from their fund on the next program so at the end of the year, they get the same amount back, just a little later. Of course this won’t happen if they don’t continue and the patient may like the idea of ‘a bird in the hand is worth 2 in the bush’. Many practices just make a policy of this and that’s the end of it. If you want to use the prepayment system, this is probably your best way.
4. Change your adjustment fee so the patient is billed pro-rata across their entire program. e.g. if you have $3000 program that you bill at $50 per visit and give a 50% discount, bill them at $25 instead of $50. This way the patient will be able to claim for every visit… but if they stop part way, they still get the discount and you have to issue a refund. You could use a hybrid with 3. above and say set them to pay, say, 60% but with a cap at $1500. This way they can claim for most of their adjustments but you don’t end up with so much risk of refunds.
5. Don’t use one-time pre-pay or schedule pay. Use Membership or retail pre-pay.

Maybe you can think of another way? Post below if you have an alternative suggestion. But please don’t use option 1! Besides being risky, it just makes so much more work for yourselves so for that reason alone it’s a bad idea.