Out-of-state Collections

May 1, 2004

We had several patients with out-of-state insurance. Their insurance carriers sent the payments directly to the patient. Several of the patients kept the money. The insurance companies say they can't do anything. What recourse do we have?

Question: We had several patients with out-of-state insurance. Their insurance carriers sent the payments directly to the patient. Several of the patients kept the money. The insurance companies say they can't do anything. What recourse do we have?

Answer: This situation is very frustrating. Despite complaints to the carriers about this, practices continue to face this issue. Unfortunately, there is really nothing that you can do except for pursuing the payment from the patient. It's labor intensive, so this is a situation in which it's worth the fee a collection agency charges. I have seen agencies charge as little as 12 percent of the net bill, and it's hard to do it yourself for less than that. We've heard from a few practices that have taken to sending 1099s to their patients; they should at least pay taxes on these ill-gotten funds.