Billing Practices of Medical Providers

Posted by Catherine Cownie Adam Freed on Monday, July 20, 2015

A recent Iowa District Court case in Clinton County addressed issues regarding the billing practices of medical providers.  In L & M Accounts, Inc. v. Max and Jennifer Zilisch, a dentist sued a patient for an unpaid dental bill in the amount of $988.24.  The dentist had originally put a crown on the patient's broken tooth.  The patient later sought additional treatment from the same dentist for an abscess on the tooth with the crown.  The tooth was removed and replaced with an implant.  Ultimately, the patient returned to the dentist and requested an artificial tooth in place of the implant.  The patient discussed the cost of the artificial tooth with an employee of the dentist and was told that her insurance would cover 80% of the cost of the new artificial tooth.  The patient was told that she would only owe 20% of the cost.  The patient paid the 20% amount and wrote on her check "implant in full."  The insurance company did not cover the remaining 80% as expected and the dentist attempted to collect the balance from the patient.  

This case provides a couple of practice tips for dentists and other medical providers with regard to billing and collections:

(1) If a patient provides a check with the language "Payment in Full" or some similar language, the provider should not deposit the check before consulting with legal counsel or obtaining a check from the patient without such language.  Essentially, when the patient includes this language, the patient is making an offer to pay the bill in full for the amount of the check.  By depositing or cashing the check, the provider accepts the offer, thereby forming a binding contract with the patient.  Providers should advise their billing staff to watch for this type of language on checks they receive from patients.

(2) It is also important for providers' staff members to be careful about the statements they make to patients regarding the cost of procedures.  In this case, the dentist's staff member represented to the patient that the cost of the procedure to her would be $247 (the 20% amount).  Although this turned out to be untrue, the patient justifiably relied on the staff member's statement.  By relying on the staff member's statement, the patient effectively "accepted" the dental office's offer to provide the service for $247.  The Court did not actually decide this particular issue in this case due to the language on the check, but this could provide patients a second possible basis to avoid paying the full bill.