Billing for missed appointments and late cancellations: Five questions to consider
Let’s face it. Life can be busy and chaotic. Missed appointments and late cancellations happen for a variety of reasons. Work conflicts, transportation barriers, and personal or family emergencies are just a few of them. The question is, should you bill patients when it happens, and if so, how? In this article, we’ll cover five questions to consider before billing for missed appointments in your medical practice.
The cost of no show appointments
While it may be tempting to overlook no show appointments (i.e., scheduled appointments that the patient does not attend and fails to cancel in advance), the reality is that each one is also a missed financial opportunity, potentially resulting in $150,000 of lost revenue annually. No show appointments are also missed chances to help other patients in need. In addition, no show appointments can also disrupt scheduling and reduce physician productivity. For all these reasons, a no show billing policy and billing for missed appointments, when appropriate, is critical. Billing for missed appointments helps offset these losses while also creating a sense of accountability for patients.
The specific cost of no show appointments in your medical practice will vary depending on your average patient clinical complexity and how often missed appointments occur. While there is no CPT code for billing for missed appointments, you can use a unique internal billing code added to your billing system with a corresponding internal administrative fee. Then you can easily include this code, its description (i.e., missed appointment), and the fee on patient invoices when billing for missed appointments. You can also use it to track your volume of no show appointments internally.
Billing for missed appointments: Questions to consider
However, before you start billing for missed appointments and creating a no show billing policy, consider these five questions:
1. What are your legal obligations? While Medicare permits billing for missed appointments as long as you apply the same fees to non-Medicare patients, Medicaid and other state policies may vary. Private payers may also have their own rules about billing for missed appointments. In addition, third-party liability insurance carriers (e.g., Workers’ Compensation) may have provisions that allow billing for missed appointments under certain circumstances. In general, though, the American Medical Association advocates for physicians to bill a no show fee when appropriate.
2. What no-show fee will you charge patients? Most medical practices charge $25-$75 for no show appointments. Regardless of what you choose, the fee for no show appointments must be reasonable and consistent across all eligible patients. When billing for missed appointments, you could also consider tiered fees that are lower for the first or second offense and higher for repeated no show appointments. Another idea when billing for missed appointments is to send a warning or notice for the first no show appointment and then charge patients for every missed appointment thereafter. The warning should include a reminder of the missed appointment and no show policy, an invitation to reschedule, and a note about how no shows affect the practice and other patients.
3. What will you include in your no show billing policy, and how will you notify patients? A no show billing policy should include the following:
Definition of a missed appointment and late cancellation. For example, you may define late cancellations in your no show billing policy as those made within 24 hours of a scheduled appointment. In addition, you may state that patients who arrive 10 minutes or later to a scheduled appointment will be considered to have missed their appointment. You may also want to define true emergencies (e.g., accidents or illnesses) in your no show billing policy and not penalize patients for scenarios that are out of their control.
Purpose of the no show billing policy and why billing for missed appointments is necessary.
Specific fees or consequences for no show appointments and late cancellations. Your no show billing policy may also want to state the potential for termination.
Looking for a sample no show billing policy? Here’s a helpful one.
In terms of notifying patients of the no show billing policy, consider the following:
Ask them to sign the no show billing policy when they complete their initial paperwork online or in the office. Note that this is a must.
Include the no show billing policy on your medical practice website.
Post signs about the no show billing policy and consequences of no show appointments in the office.
4. What will you do to reduce no show appointments proactively? For example, will you send automated appointment reminders as well as reminders of your no show billing policy? Allow patients to self-schedule appointments? Increase the availability of same-day or next-day appointments? Require copayments in advance? All of these can reduce the likelihood that no show appointments will occur.
5. What will you do if patients consistently miss their appointments? When patients miss appointments consistently, it might be time to have a direct conversation about your no show billing policy. What’s the reason why they’re late, and would adjusting the appointment time or day help? What about connecting them to free transportation if that’s a challenge? In some cases—and as a last resort—you may want to consider terminating your relationship with the patient. While you do have a fiduciary responsibility to ensure continuity of care, you’re also able to dismiss a patient over frequent no show appointments permitted you provide reasonable notice and support the patient with a transfer to another provider.
Leverage technology to prevent no show appointments
Preventing no show appointments helps medical practices remain productive while ensuring access to patients who need care. A no show billing policy is paramount. However, technology plays an important role in connecting with patients and ensuring they are successful. Technology also plays a role in providing patients with timely billing statements and multiple payment options. Medical practices that leverage this technology when engaging patients with clear expectations and billing for missed appointments will be most successful in the long run.
