Billing and Financial Information for Our Valued Patients

Here are some updates regarding the financial landscape of our practice and how it impacts both our operations and your care.

1. Rising Health Insurance Costs and Decreasing Reimbursements

Despite the rising costs of health insurance, clinics in private practice are experiencing significant decreases in operational income. Over the past twenty years, there have been substantial cuts to reimbursement rates. Our practice currently collects less money from a patient visit than it did in 2006 when we first opened. In addition, Medicare reimbursement to clinics in private practice will be cut again by a further 3 % in 2025. These cuts exclusively impact clinics in private practice, making it increasingly difficult for us to continue operating under current financial conditions.

In contrast, hospitals and hospital-based clinics enjoy, on average, between 30-100% higher reimbursement from Medicare and insurance for the same services, and are not subject to yearly cuts (they are actually paid more each year to counteract inflation).   For example, the reimbursement for a skin biopsy (CPT code 11102) in a private practice clinic is around $80, whereas the same procedure in a hospital-based clinic might be reimbursed at $160. This discrepancy further exacerbates the financial challenges faced by private practice clinics. 

When patients get upset about the short duration of their appointments, the above financial realities dictate the number of patients that need to be seen in a day for us to stay in business. 

2. Understanding Billing and Reimbursement

Our practice is unable to ‘balance bill,’ which means we cannot raise prices relative to what we receive from insurance companies or Medicare. Regardless of what we charge, patients are only responsible for paying the amount contracted with their insurance or Medicare, not the total bill. This contracted amount has not significantly changed in over 20 years, and in fact, has decreased despite massive inflation and increased costs for staffing, rent, insurance, and supplies. Medicine is one of the few industries unable to protect ourselves against inflation and rising costs, as we are bound by contracts dictated by the government.

3. Legal Requirements and Billing Practices

Legally, we are required to bill accurately for office visits and any procedures performed. According to coding and billing laws, along with Medicare laws, we must ensure that all services are billed correctly to avoid committing fraud. This means we cannot change what patients are billed based on subjective perceptions of the cost or satisfaction. Here are some key legal points:

      •   Accurate Billing: We must bill accurately for all services provided, as mandated by coding and billing laws.

      •   Under Medicare laws, which extend to all patients even with commercial insurance, it is not permissible to write off a patient’s bill to zero, or reduce a bill, simply because the patient is dissatisfied with service. Writing off a patient’s bill can be considered fraud and abuse.  Non-compliance with these rules can result in significant penalties, including exclusion from healthcare programs, civil monetary penalties, and potential criminal charges. The laws that Medicare enforces regarding non-discrimination extend beyond federal programs and apply to how providers handle billing and discounts across all different payer types.

        •   Under the federal Anti-Kickback Statute, offering something of value (such as a discount) is prohibited. Healthcare providers are required to treat all patients fairly and equitably. 

      •   Medicare Regulations: Medicare laws state that we cannot offer services for free or reduce bills arbitrarily. Everything performed must be billed accurately. These billing regulations also apply to all commercial and private insurance.

      •   Fraud Prevention: Any medical office that does not bill accurately may be committing fraud. Therefore, we cannot honor requests to reduce bills simply because they seem too high. If a procedure was not performed, please inform us immediately so we can correct the bill.

4. Financial Protection Measures

In response to these challenges, our clinic actively protects our financial viability. These plans include, but are not limited to:

      •   Addressing Patient Appointment No-Shows: Patient appointment no-shows pose a significant threat to the financial survival of our clinic. Each no-show results in a significant loss in our daily operational income, causing approximately a 3% gross loss for each missed office visit and a 15% gross loss for each missed procedure. To safeguard our practice’s financial stability, we routinely charge fees for patient no-shows. Failure to pay these fees or other medical bills will result in the account being sent to a collections agency, potentially impacting credit ratings. Please note: Some patients claim they “called to cancel their appointment” after missing it without prior notice, known as a ‘no-show no-call.’  We record and log all incoming calls and archive every message. Patients who no-show and ask not to pay the fee must provide evidence of their call (via a call log at least 24 hours in advance) to waive the charge. Simply calling our office and not leaving a message is insufficient for this purpose. 

Due to the ongoing financial disparities between private practice and the hospital systems, it is only a matter of time before all independent medical offices (that bill health insurance) will close or need to sell to a hospital system.  We appreciate your understanding and support. Our primary goal is to continue providing the highest quality care while navigating these financial challenges. Should you have any questions or concerns, please do not hesitate to contact our office.

Thank you for your continued trust in our practice

Anacortes Dermatology Inc

1801 Commercial Ave,

Anacortes, WA, 98221

360-399-6036 (ph)

360-588-1691 (fax)