Be wary of 'fee pitfalls' hidden in your practice
In an effort to improve their bottom lines in this struggling economy, many plastic surgery practices have adopted new practices and policies - some of which are inherently risky, while others are challenging from an execution standpoint.
The custom of prepaying for aesthetic surgery at least two weeks prior to surgery has existed for decades. Patients who pay in advance not only demonstrate a commitment to the surgery - they also tend to have less postoperative dissatisfaction. After all, if they don't prepay, once the nose is reshaped or the breast enhanced, the work is done - and the surgeon has little recourse if the patient chooses not to pay. Therefore, the prepayment policy protects the surgeon in terms of both time and finance.
Over the years, the American population has become more casual about planning appointments and keeping reservations of all sorts. Consider that airlines now charge fees that would have been unheard of a decade ago. It's also become common for most high-end restaurants, massage therapists and hair stylists to require deposits at the time a reservation is made. And so it goes with plastic surgery practices - but these policies at worst can introduce substantial risk and at best merely irritate patients.
To avoid these pitfalls, common sense and good judgment are required. No matter how articulate your financial policy reads, situations will arise that don't fall neatly into categories. Rule No. 1 when enforcing these policies: Think.
Aesthetic consultation prepayment
Asking for a deposit for a consultation is more common today than it was five years ago (though practices vary on this). At the high end, practices charge the patient's credit card for the visit at the time an appointment is made, and the office immediately sends the patient a follow-up letter regarding the terms of appointment cancellations and changes - and notes whether the letter has been sent via email (with the patient's permission, of course) and opened, or sent via U.S. mail.
This change has virtually eliminated no-shows and, in our experience, less than one in100 patients demand a credit card refund. Even if a refund request is made, once the letter is shown to the lender, the refund is denied (in most cases).
Practices that take a credit card guarantee and only charge if the patient fails to keep the appointment are in the middle of the spectrum. At the other end of the spectrum are practices that offer "free consultations" as an inducement, usually to discount-seeking prospects. If you actually reserve 30 minutes or more for your aesthetic consultations and provide a superior patient experience, patients will come and be willing to pay.
Prepayment for aesthetic surgery
The "pay two weeks ahead of your surgery date" policy going back to the 1960s and1970s has morphed. A recent look at surgical quotes from around the country shows that many practices in "sunshine states" and all urban areas now require some form of pre-payment upon scheduling. This policy, akin to earnest money in home buying, ensures that the patient is serious.
The reason behind this is that many practices have encountered patients who planned to see three surgeons. To play their options, some would come in for a consult and schedule surgery, knowing full well that they planned to see one or two additional surgeons. Last-minute cancellations play havoc with a surgeon's ability to effectively schedule block time - thus the genesis of collecting at the time of scheduling.
Prepayment amounts vary from a flat fee to a percentage of the fee. If the surgeon owns the surgical facility -and he or she has to pre-book anesthesia and post-op nursing recovery staff, and order implants - additional work and potential expense is required. In any scenario, scheduling a case requires staff time. Therefore, the percentage of the charge should reflect a series of hassles - such as when the patient is adding and subtracting procedures while making a decision. This vacillation can create bookkeeping headaches too numerous to elaborate here.
When considering the amount of the deposit or scheduling fee, it's critical to consider a parallel and balanced refund policy - more on this point in a minute. An important principle to keep in mind is that words count. We recommend clearly labeling the deposit as a "non-refundable scheduling and booking fee." Because of recent decisions by some state Boards of Medical Examiners - for instance, in Texas - some are saying that retaining money for surgery not performed should be classified as fraud. Have patients sign and date each important document - and keep the original document in your files - but also ask them to initial each key paragraph as evidence that they have read it.
Revisions
The details included in financial quotes provided to patients with regard to revision surgery or treatment vary widely. It's wise to discuss and document the circumstances that might warrant revisional surgery, as well as the anticipated costs. Some plastic surgeons may agree to revise a "dog ear" post-op on an abdominoplasty in their procedure room for no surgical fee - yet charge a "tray fee." For implant capsulectomy, there's a range of revision costs, from nothing to a full fee. The latter would involve explaining that the procedure would not be to fix a "complication" - and this also would be discussed in their consent form.
"Re-do's" on breast augmentations for patients who want to go slightly larger represent another unique circumstance. Remember, even if the surgeon doesn't charge for revisions, there may be additional charges for anesthesia, facility and the device/product expenses.
It's wise to add a paragraph to your quote and consents, stating that: "From time to time as an executive and discretionary measure, fees may be waived to assist patients in achieving their goals, and this in no way indicates an admission of negligence or sub-standard care." Such a statement may help avoid the perception of a settlement that could be both admissible in litigation and reportable to the national Data Bank (which tracks and lists settlements). Be specific, and include a revision/correction timeframe (for example, within the first year); surgeon's fees; additional care as needed - and what's not included, such as implants when the patient desires to go bigger.
A statement such as "Consideration of waived fees for revisions requires you keep all postoperative appointments and that you demonstrate that postoperative instructions were followed" would be a prudent addition to your document.
Refunds
Include refunds in your financial policies, as well. There are two parts to this issue. The first concerns refunds to patients after a procedure if they are dissatisfied. Sometimes, as a business decision, it's wise to refund surgical fees, but be careful here. The patient typically must sign a release - acceptable to your liability carrier - that frees the practice from any litigation relating the procedure in question. Don't make the refund and then call your insurer. The liability carrier should be notified of such discussions - and use its release forms for patient signatures before you return funds.
The patient must be given appropriate time and consultation prior to signing are lease. Making a refund is not an admission of guilt or negligence, but it is a business decision. Only after the patient signs can funds be released. But there should be a specific time allowed and deadline for signing after the patient receives the release - there are examples of patients signing and immediately taking the money, but returning for more cash with claims that they hadn't understood the document. Circumstances will dictate whether anything additional to the surgical fee is included in the refund. This wisely terminates the patient relationship, yet can avoid litigation.
Postponed or cancelled surgeries are the second refund issue. Be sure your quote and financial policy include carefully drafted language. Psychiatrists have charged for cancellations at least since the 1970s, so it's not a novel concept in medicine. After all, hotels, airlines and almost every other service provider - including hair stylists - require fees for cancellations and missed appointments.
Consumer casualness is at the root of this problem. For example, there are patients who schedule with the first two surgeons they consult, and then later decide with whom they will proceed. It's almost impossible at the last minute to schedule a four-hour case to fill the time after another patient cancels - sometimes with no good reason for doing so. You lose the time, the financial contribution and the opportunity.
The difficulty is that some state Boards of Medical Examiners have deemed refusing to refund surgical fees as a form of fraud for charging for surgery that was not performed. Therefore, clearly describe a non-refundable "scheduling and booking fee" that can be a percentage of the overall surgical fee. Make it higher, if you have to hire others. Suggestions vary between a percentage of the fee, but arguably not greater than 50 percent of the fee. A death in the immediate family is an example of a justifiable reason to cancel.
Patients will "game" their cancellations to avoid paying, so the better it's outlined, the easier enforcing cancellation fees becomes. Cancelling more than four weeks before the surgery date may incur a staff fee of a fixed amount, while any cancellation within the two-week period just before surgery would have this full obligatory fee. You can individually decide if this should be applied if they reschedule or seek other services.
Carefully construct quotes for proposed procedures, including a time deadline after which the quote is not valid. In many cases, you as the plastic surgeon don't control the prices of facilities and anesthesia or manufacturers - make that clear. The quote should include the surgical fee, a scheduling and booking fee, facility and anesthesia fees (if applicable) and a cost estimate for future revisions, necessary replacement surgery, lab tests and pathology. The better you estimate and clearly define patient responsibilities, the easier it is in avoiding conflicts when they arise.
As we all know, our practices can be challenging, yet fun. But they do involve hidden risks - which usually can be avoided, if we're aware of their existence - and know where to find answers ahead of time.
Dr. Reisman, a member of the ASPS Professional Liability Insurance Committee and Risk Retention Group Task Force, holds a law degree from the South Texas College of Law. He can be reached at drreisman@hotmail.com. Karen Zupko, a practice management specialist who focuses on plastic surgery, can be reached at kzupko@karenzupko.com.
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