Is It Ethical to Discuss Unpaid Bills With Your Patients?

Kuzmick/AdobeStock

This article was update on November 15, 2023.

COMMENTARY

Clinicians in outpatient private practice do not usually discuss finances with patients, yet unpaid dues are a commonly encountered problem. Often, the required balance builds up and clinicians become stuck in a bind: Is it ethical to discuss unpaid bills with patients?

Although payments by insurance companies account for most of the revenue in private practice, the cost of medical treatment has become complicated in the process of negotiations between clinics, organizations, and insurance companies. Patients receiving the same treatment may be paying quite different amounts depending on the coverage offered by their plan, copayments, deductibles, and co-insurances. Most outpatient practices have websites where patients can upload information about their health insurance plans before scheduling an appointment. Additionally, at the initial intake, patients sign a financial agreement which describes in detail that they will be responsible for all charges not covered by insurance or in the case of loss of insurance.

Legal and Ethical Considerations

Legally, hospitals and private clinics are considered like any business exchange. Any patient can be turned away before they enter a clinician-patient relationship. Once the relationship is established, the clinicians become fiduciaries who are held to a higher standard than any other business exchange. The concepts of beneficence and nonmaleficence are the embedded in the clinician-patient relationship. Delinquent patients can be discharged except in emergencies, although clinicians are responsible for the treatment of patients until other medical help is available to them.

When it comes to ethics, the American College of Physicians’ Ethics Manual states, “a sense of duty to patient should take precedence over concern about compensation.”¹ According to the American Medical Association’s opinions about ethics, clinicians charging interest and late fees are encouraged to exercise compassion and discretion in hardship cases.1 Some private practices do follow the 1832 ethical admonition to not “exercise unfeeling rigor in the collection of fees.”² 

Patients need timely and appropriate mental health treatment. According to Federal Reserve Board 2021 report, 23% of adults went without medical care due to inability to pay.³ Although patients sign the financial agreement, it is unclear how many patients take the time to read and understand it. In this context, patients may see the health care system as being “unfair,” “messed up,” or “they only care about money,” which can further negatively impact likelihood of their adherence with treatment recommendations.

For clinicians, unpaid fees are a difficult problem that involves medical ethics, professional etiquette, and financial burden. The comfort of the clinician in continuing to see the patient decreases as the bill amount increases. Although large private practices may be able to afford to forgo some portion of unpaid bills, this is especially problematic for small practices and those in the initial phase of setup. This affects the clinician’s ability to provide treatment, especially in the context of financial burden and inflation that has been amplified due to the global COVID-19 pandemic.

Clinicians may lack knowledge pertaining to a particular patient’s finances. They are under time constraints in a brief medication management appointment. They may also be poorly trained on how to discuss cost of treatment, which is one of the reasons behind reluctance to discuss payments directly with patients. Patients may question if it is ethical for the clinician to talk about payments with them. In the time of feedback surveys and online reviews, exercising rigor about money collection creates the potential for negative reviews and a bad clinician reputation. Health insurance company contracts do not allow fee-waiver by a clinician unless the patient provides proof of financial hardship.

Finding Solutions

The overdue bills can become a barrier to provision of much-needed mental health treatment for patients. It is imperative to promote transparency at the beginning of the clinician-patient relationship and to clarify payments to patients.⁴ Discussing cost of treatment is not unethical and it promotes ethical medical practice. However, the clinician-patient relationship is not just transactional—it is based on higher ethical standard. Therefore, the subject should be approached with sensitivity and respect. Exercising compassion is embedded in physician-patient relationship.

Certain steps can be taken such as providing help to patients so that they understand the financial responsibility of the cost of treatment. Friendly reminders, extended payment plans, and waive of charges on a case-by-case basis may ease the problem of overdue bills for patients and for the practice. Practice managers may intervene early to offer a payment plan to ease the burden before it becomes too difficult for patients to pay. Clinics can also provide patients with help in seeking financial assistance (ie, applying for social security disability insurance).

Clinicians have a fiduciary duty to their patients, and the decision to end the clinician-patient relationship must be made with care and consideration. Patients should not be abandoned; they must be provided with adequate notice, and assistance should be offered in transitioning their care to another provider if necessary. It is imperative to document the reasons for discharge clearly and to ensure that the decision is based on justifiable grounds, not on the patient’s inability to pay. Ensuring that the discharge process adheres to legal and ethical standards upholds the integrity of the clinician-patient relationship and safeguards the well-being of the patient.⁵

Biases, both explicit and implicit, exist in health care delivery. Implicit bias against ethnic, racial, gender and sexual minorities affect patient-clinician interaction, treatment decisions, and patient treatment adherence. Higher implicit bias among clinicians also affects their empathy towards patients. Patients may sense that which impairs their trust in clinicians, adherence with treatment recommendations, and eventually contributes towards the problem of unpaid bills. For clinicians, being aware of these biases is the first step towards resolution. Time-limited skills training can be helpful to create awareness, however, they do not show sustained changes in behavior. Systemic structural and policy changes both inside and outside the health care system are needed to address it.⁶

Medical schools and residency programs may provide trainings in the form of role playing and workshops to clinicians to develop skills to have open and respectful discussions with patients about financial cost.

Federal law considers legal actions against unpaid medical bills to be an extraordinary collection action. States vary widely in terms of patient protection from unpaid medical bills. In the matter of unpaid bills, laws reflect ethics. Still, in the field of medicine, it is ethics that should drive our behavior.

Dr Nuzhat is an attending psychiatrist and assistant professor at Worcester Recovery Center and Hospital, UMass Chan Medical School.

References

1. Hall MA, Schneider CE. The professional ethics of billing and collections. JAMA. 2008;300(15):1806-1808.

2. Baker RB, Caplan A, Emanuel L, Latham S, eds. The American Medical Ethics Revolution: How the AMA’s Code of Ethics has Transformed Physicians’ Relationship to Patients, Professionals, and Society. John Hopkins University Press; 1999.

3. Annual Report - 2021. Federal Reserve. Accessed October 17, 2023. https://www.federalreserve.gov/publications/2021-ar-overview.htm

4. Gupta R, Tsay C, Forgerty RL. Promoting cost transparency to reduce financial harm to patients. AMA J Ethics. 2015;17(11):1073-1078.

5. Kona M, Raimugia V. State protections against medical bills: a look at policies across the US. The Commonwealth Fund. September 7, 2023. Accessed October 17, 2023. https://www.commonwealthfund.org/publications/fund-reports/2023/sep/state-protections-medical-debt-policies-across-us

6. Vela MB, Erondu AI, Smith NA, et al. Eliminating explicit and implicit biases in health care: evidence and research needs. Annu Rev Public Health. 2022;43:477-501