A Patient Refused to Pay For What His Insurance Refused to Cover. What Can I Do?

In this case, your basic options are (a) to sue, or (b) to forgo your right to collect the payment due. However, there are things you can do to make your future collections efforts more successful.

Dentists often presume that patients will remit co-pays, pay for any portion of the bill that is not covered by insurance, and remit full payment even if their insurance refuses to pay the claim. But when a patient refuses to pay, the dentist has to make a judgment call weighing the risks and rewards of pursing a collection action.

The collection process is not without cost, in both time and money, and it is not a sure bet. In a lawsuit, the patient will be given the opportunity to explain his or her position, which is likely to be the dentist agreed to do the work in question without holding the patient financially accountable for the disputed amount (such as, “Dr. Smith told me not to worry about insurance, and that he would collect whatever he could from my insurance company.”). In such a case, the court may wind up believing the patient, or at least some doubt as to who owes what to whom.

Knowing the risks in filing a collection suit, many dentists in such situations have decided to forgo their right to sue. In addition to the value of your time and the expense involved in the collection process, there are also reputational risks, such as an aggrieved patient posting negative comments on social media, or yellow journalism. One way to bolster the dentist’s legal position in future cases, and potentially make collections efforts more successful and less costly, is to have patients sign a clean agreement up front, before dental work is commence, acknowledging their responsibility for the total amount due, regardless of what the insurance carrier ultimately pays. A signed document to this effect can be a stark reminder to a patient who later refuses to pay, and send a clear message to the patient early in the collection process that this agreement will be used against the patient in court if payment is not forthcoming.

In addition, you may wish to follow the lead of the many dental offices that post and publish their financial policies. These policies can be displayed on a plaque at the receptionist’s desk and can be published in the practice’s brochure, website, or in a special mailing. While likely not as helpful to the dentist’s collection case as having the patient’s signature on an agreement accepting financial responsibility, evidence that the patient was on notice in this manner would likely be a positive in a legal action for collection purposes.

Finally, there are certain things that you may not do, such as withholding the records of non-paying patients, both for ethical and legal reasons.

A Dentist’s Guide to the Law Page 167-168