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Coding & Billing
Penalize Patients Who Cancel Surgery
Richard Vagley
Publish Date: October 10, 2007   |  Tags:   Financial Management

Every empty airplane seat, hotel bed and restaurant table represents lost revenue, never to be recaptured. When you think about it, surgical practice is no different in that regard. We sell time and space in the operating room. When a patient, especially a private-pay cosmetic surgery patient, cancels or postpones elective surgery at the last minute, you can't re-utilize operative time you've committed to her in an equally productive way. Just like many airlines, hotels and restaurants, I penalize patients who cancel surgery my staff and I scheduled on their behalf and at their request.

Commit body, soul and pocketbook
I don't charge patients a consultation fee and certainly wouldn't strong-arm them into paying a non-refundable deposit toward any surgery we might discuss at consultation. My staff and I go to great lengths to educate each patient about all of the pros and cons associated with the surgery, including costs (always confirmed in writing, by the way). Each patient is able to decide for or against surgery at her leisure with no pressure from us, and, most importantly, at no financial obligation or risk. But once that patient commits to surgery, she'd better be prepared to commit body, soul and pocketbook.

When a patient indicates her decision to proceed with surgery to my staff and me, and all parties - patient, operative facility, anesthesiologist (if applicable) and myself - agree on what will be undertaken, where and when, my staff and I immediately send that patient (if necessary, via overnight delivery) what I call an engagement letter that confirms the foregoing and provides all of the information she might require to prepare for surgery, including a breakdown of its total cost, how and to whom the payments for surgery are distributed and when payments are due. We even provide each patient with envelopes pre-addressed (and, if I'm feeling generous, pre-stamped as well) to the recipients of all payments. Payments to all parties are payable, in full, no later than two weeks before the day of surgery, which is an industry standard among plastic and cosmetic surgeons.

Now, if the patient cancels or postpones surgery during that two-week window, we refund that patient his surgical fee, less a $750 service charge. We won't reschedule surgery until we receive payment in full of a non-refundable surgical fee.

If the patient cancels or postpones surgery on the day before or the day of surgery (by which time I can't "re-sell" operative time already committed to her), that patient forfeits her entire surgical fee but, if applicable, is returned the equivalent of the cost of any implants (such as breast implants) factored into the surgical fee. Subsequent rescheduling of surgery proceeds only after payment in full of a non-refundable surgical fee.

A patient who cancels or postpones surgery before that two-week window isn't penalized in any way but, once again, subsequent rescheduling of surgery proceeds only after payment in full of a non-refundable surgical fee.

Exceptions to the rule
As with all policies, there are exceptions. If I or any other physician involved in the care of a patient determine that surgery is contraindicated and shouldn't proceed as planned, no financial penalty accrues to the affected patient. I remember one diminutive patient who was in an automobile accident on the day of her surgery while en route to the operative facility and, though anxious to proceed with her bilateral breast augmentation, was deemed an inappropriate candidate because of a head injury (which, thankfully, proved benign and delayed her surgery by only a week, at no financial penalty to her). I also remember a high-ranking Pittsburgh police officer, an impressive macho fellow who was decorated for bravery under fire but who, literally minutes before his bilateral otoplasty, bailed out because he couldn't face needles of any kind. (Go figure!) Needless to say, he forfeited his entire surgical fee and decided to live with his protruding ears.

The operative facilities and anesthesiologists with whom I work don't penalize patients who cancel or postpone surgery during that two-week window I previously mentioned, since more often than not they can reschedule the corresponding lost time. But they, like me, don't return pre-payments for their respective services to patients who cancel or postpone surgery on the day before or the day of surgery, by which time staffing (and its concomitant expense) for the day of surgery is in place.

More than a few patients affected by the foregoing policies have groused about and even challenged my pre-payment policies, but none successfully. One patient, who paid for my services via credit card, submitted a formal complaint to her credit card company, which in turn necessitated a written defense from me. Shortly thereafter, I received a call from a representative of the credit card company supportive of my position in the dispute in question and complimentary of my written pre-payment policies because of their clarity, fairness and transparency.

If your facility deals with cosmetic or pre-pay patients and you have yet to develop a policy for dealing with last-minute, patient-initiated cancellations or postponements of surgery, you may wish to give serious thought to instituting such a policy. After all, many businesses which sell time and space (such as airlines, hotels and restaurants) employ such policies to the essentially universal acceptance of the customers who utilize those businesses.