One of the least popular aspects of private practice is fee collection. The complexities of third party reimbursement can make fee collection an administrative challenge for the private practitioner. Ellen Snyder, MSW decided to simplify some of her administrative tasks by routinely waiving the insurance co-payment for her clients. Most of her clients had 80% of her charges covered by their insurance. Ms. Snyder felt that billing and collecting the per session co-payment was more trouble than it was worth. She would accept the insurance payment as total compensation. Unfortunately, the insurance companies did not share her opinion and started an insurance fraud investigation.
Insurance fraud can be broadly defined as any deliberate misrepresentation of the facts, that would result in an insurance company paying for services or paying more for services than what is specified in the insurance contract. Your malpractice insurance does NOT cover insurance fraud as it is a criminal charge and, therefore, cannot be covered by insurance.
What are some typical examples of insurance fraud? Submitting a claim for services that were not rendered can be insurance fraud. If a client misses an appointment without canceling, many social workers bill for that missed appointment. However, the social worker should NOT bill the client’s insurance carrier unless the client’s contract allows for reimbursement for services not rendered.
Another common practice is signing insurance forms for services performed by another person not authorized to receive reimbursement. Such an arrangement is typically seen when a new social worker is working in a private practice while awaiting licensure. This practice is acceptable ONLY if the client’s insurance contract covers the services of unlicensed providers.
Taking a reduced payment for services is yet another form of fraud. Ms. Snyder has every right to waive a co-payment or reduce a fee for a self-paying client. However, when the client’s insurance covers the services that the social worker is providing, the social worker cannot waive the co-payment or reduce the fee. Doing so is a form of insurance fraud.
The best risk management technique for liability related to fee collection, is to be familiar with your client’s insurance contracts and to bill accordingly. The variety and complexity of insurance coverage have lead many social workers to hire a professional billing service for these tasks. Additionally, establish a policy for missed appointment and any fee reductions. Never base this policy on the availability of insurance coverage and follow it consistently.
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