Cash, Insurance & Membership Plans

I recently got asked by a chiropractor to help her deal with a nasty board complaint and investigation. It started as a fee dispute and escalated from there with a number of issues arising in the course of the investigation that she was not expecting.

The first lesson here is that if a patient asks for a refund, ask yourself if your records and your financial documentation can withstand the scrutiny of a thorough investigation before denying that refund or sending anyone to collections. Filing a Board complaint is pretty easy in most states and boards are obligated to respond. The last thing you want is for a board to start pulling the loose string on your practice sweater. 

The chiropractor claimed she was 100% cash and was operating a "Membership" type practice. In the course of the Board investigation she was asked by the Board if she saw Medicare patients and she said she did. The Board then asked for records on some of her Medicare patients and unfortunately she did not document according to Medicare standards or the state rules.

She also saw "some" PI patients but in those cases she billed the insurance company directly and did not give them the benefit of her pre-paid plans.

She also did not follow the prescriptions of the Board in regards to the implementation of pre-pay contracts. Many state boards have specific language on how to deal with pre-pay and go so far as to tell you exactly what you must say in the contract and what you must do in various situations.

They may also have language that tells you how to handle refunds. In this case the chiropractor had a confusing formula for returning the unused portion of a pre-paid plan and in the end the Board found it unreasonable.

Generally, states require that the plan must be cancellable by either party at any time for any reason without penalty of any kind to the patient.

Also, upon cancellation of the plan it is typically expected that the patient receive a complete refund of all fees paid on a pro rated basis of the number of treatments provided compared to total treatments contracted.

Typically boards want the plan to provide for a limited, defined number of visits as opposed to unlimited care at a fixed fee.

Lastly, regardless of payment type, your records need to meet documentation standards and should reflect an adherence to the accepted standard of clinical care. The patient's file must contain the proposed treatment plan, including all aspects of evaluation, management, and treatment planned to therapeutically benefit the patient relative to the condition determined to be present and necessitating treatment.

One last note: if you are being told by a practice management guru that the contracts they are selling you or advising you on are legal and compliant make sure you understand that you will not be able to blame any oversight on your guru. It is your license and the board is going to approach it that way.

If you have any questions about insurance coverage please contact us at ChiroFutures.