Avoiding unresolved fee balances

The pressures of a recessionary economy combined with increasing numbers of people facing financial and job losses could potentially lead to more malpractice claim against dentists, risk management experts say. They recommend dentists effectively manage financial communications with patients to minimize exposure to such allegations.

“Although the precise number of retaliatory filings is unknown, dentists should be aware that many professional liability claims begin as a retaliation against attempts to recover a patient’s debt,” said Dr. John Vaselaney of CNA HealthPro. “One of the most important things dentists can do is avoid allowing outstanding balances to linger unaddressed. Patients should be contacted earlier rather than later.”

Insurers agree that the quality of communications between a dentist and patient has a strong impact on the ability of an insurer to defend a dentist against an unfounded allegation of malpractice. According to the 2005 ADA Survey of Professional Liability Insurers, claims filed in retaliation for a billing dispute or collection problem are the second most frequent communication problem between dentists and patients to be the primary cause of a paid claim. Insurers gave the frequency a value of 6.7, when a value of five indicates frequency is fairly common and a value of 10 indicates very common frequency.

Many dentists are already aware potential problems may be looming when account receivables fall behind. Jaime Welcher, senior risk management analyst at The Dentist’s Insurance Company, in California, says more dentists are calling the TDIC Advice Line in recent months with concerns that their patient accounts are further in arrears than usual.

“Patients who are sent to collections often claim faulty dentistry as the reason for not paying the bill. We help dentists communicate with patients and hopefully avoid sending the patient to collections,” says Ms. Welcher.

Ideally, the dental practice’s protocols for fee payment should be put in place and communicated to patients before payment misunderstandings can occur, risk managers say. Those communications can begin as early as when a patient walks into the dentist’s waiting room for the first time.

“A sign in the lobby or waiting room noting that the dental office bills insurance as a courtesy, but the patient is ultimately responsible for moneys owed, helps patients understand office policies upfront,” says Ms. Welcher.

Risk management experts recommend that dentists ask patients to commit to a financial payment plan, as well as a treatment plan, in writing.

“When discussing your treatment plan with patients, explain financial arrangements as well, including how much treatment will cost and when payment is expected,” advises Dr. Vaselaney. “We recommend that treatment fees be addressed in conjunction with the informed consent discussion of proposed treatment and treatment alternatives.”

Having patients sign an agreement upfront before dental work is commenced, acknowledging their responsibility for the total amount due, regardless of what the insurance carrier ultimately pays can bolster a dentist’s legal position and potentially make collection efforts more successful and less costly, according to Frequently Asked Legal Questions: A Guide for Dentists and the Dental Team. The resource, published by the ADA Division of Legal Affairs, answers more than 150 questions dentists frequently ask the Legal Division and devotes an entire chapter to fee payment and collections.

“A signed document can be a stark reminder to a patient who later refuses to pay and sends a clear message to the patient early in the collections process that his or her agreement will be quickly used against the patient in a court of law, if necessary,” the guide notes.

Ms. Welcher says sometimes a signed agreement to pay for a procedure is often all it takes to remind patients of their financial obligations and avert a potential conflict.

“The whole point in putting such communications in writing is to avoid misunderstandings, initiation of the collection process, or allegations of substandard work once the collection process starts,” says Ms. Welcher. “If the patient’s records reflect the treatment was provided within the standard of care and accepted by the patient, the likelihood that an attorney will pursue legal action is diminished.”

“If the documentation shows the work was provided within the standard of care and signed off on by the patient, there’s not much chance an attorney will pursue that case.”

Risk managers say placing a patient account into collections should always be a dentist’s last resort.

“Patients who are struggling to pay aren’t going to have more money just because their account was put into collection,” notes Dr. Vaselaney. “And a patient who was otherwise satisfied with his or her dental experience might become angered by a collection action and allege malpractice on the part of the dentist.”

CNA HealthPro claims specialists estimate that as many as 1 of 4 dental malpractice cases they handle are triggered by collection actions or other financial conflicts.

Many fee misunderstandings occur because patients don’t understand their dental benefit plans, risk managers say.

“Patients sometimes mistakenly believe that dental plans are akin to medical plans and that necessary services are generally covered to some extent,” explains Dr. Vaselaney.

One policy risk managers recommend dentists consider is asking patients to pay a substantial fee in advance of treatment or at certain steps in the treatment plan. For example, a dentist could require a patient to pay half of a crown or bridge fee before even scheduling the preparation appointment, then an additional percentage at the time of the impression, with the remainder due at delivery of the crown or bridge.”

For patients who have outstanding fee balances and have not followed up with treatment recommendations or stayed in touch with the practice, risk management experts recommend that before proceeding with collection procedures dentists send a letter to the patient and document that the letter was sent in the patient’s chart.

“The letter can address the outstanding balance, but it should primarily remind the patient of their oral health status, any additional treatment needs, and the potential risks of delaying the completion of treatment,” explains Dr. Vaselaney.

Contacting the patient to convey your concern about his or her oral health may be all the encouragement needed for the patient to straighten the situation out,” Ms. Welcher advises. “In some cases, it may be a good idea to send a letter certified mail to ensure it is received.”

In the event a patient does file a malpractice lawsuit, a letter of concern from the dentist increases the likelihood that a court or jury would view the patient’s lawsuit as having been filed in retribution for the collection procedure and not because of dissatisfaction with the prior treatment, risk managers say.

“A letter can be a very powerful form of defense for a dentist. It can show that, notwithstanding the outstanding balance, the dentist was still focused on the patient’s well-being,” says Dr. Vaselaney. “Your records should reflect your efforts to at all times fulfill your professional duty. The clinical component of the follow-up letter is an important part of that.”

Dr. Fred Wetzel serves on the Board of Medical Liability Mutual Insurance Co./New York and is one of its risk management consultants. As part of his 2008 ADA annual session presentation, Dr. Wetzel cited real case scenarios to illuminate the importance of accurate documentation and record-keeping in dental practice.

In one case, a patient was awarded $850,000 by a jury when an ill-fitting bridge that was intended as a temporary wasn’t recorded that way in the patient’s chart. The patient didn’t return for the permanent bridge but went on to seek a new dentist who diagnosed the patient with temporomandibular joint disorder as a result of the bridge.

“Accurate record-keeping is key to avoiding such problems,” says Dr. Wetzel. “Whether a patient files a civil claim or complains to a state regulatory agency, it’s a dentist’s first line of defense.”

Frequently Asked Legal Questions: A Guide for Dentists and the Dental Team devotes a chapter to fee collection, as does Fast-Track Training: the Basics for Dental Staff.

To purchase these ADA resources, visit the ADA Catalog at www.adacatalog.org or call 1-800-947-4746.

For more information about patient financing plans, ADA Business Resources endorses CareCredit, the largest provider of dental financing for patients in the U.S. For more information about CareCredit, call 1-800-300-3046, Ext. 4519.