Forgiven Copayments, Patient
Termination, Charging Interest and Fees
The American Dental Association Code of Ethics states that it is unethical
conduct for a dentist to accept a third party payment under a copayment
plan as full payment without disclosing to the third party that the
patient's portion will not be collected. This is overbilling, according
to the Code.
The reason for the focus on abrogation of copayment is the misrepresentation
of fees it represents. Imagine that a procedure's fee is $100. The insurance
plan pays 90 percent of the dentist's fee and the patient is obligated
to pay the remainder. When the dentist waives the copayment, he or she
is actually charging only $90. The dentist should then collect only
$81 from the insurance plan (90 percent of the fee charged). Instead,
by collecting $90, he or she has collected 100 percent of the fee actually
charged but the insurance company does not realize it. In this case
the dentist is in violation of both the ADA Code of Ethics and of state
To avoid this difficult situation, dentists are advised to report what
they charge the patient as their fee.
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Patient Termination/Avoiding Abandonment
Occasionally a dentist will have reason to withdraw responsibility
for a patient of record.
Once a dentist-patient relationship has been established, the dentist
has a legal duty to treat a patient until the relationship is terminated. Consequently, patients may bring charges of abandonment against a dentist
if the patient has suffered an injury due to the dentist's failure to
continue to perform his/her duty to treat the patient.
The dentist-patient relationship can be terminated only by:
- cessation of the necessity which gave rise to the relationship;
- discharge of the dentist by the patient; or
- the dentist's withdrawal of the patient.
Dentist termination of patient
If you decide to terminate the relationship,
it is prudent to notify the patient, in writing, through the mail
with a certified letter, return receipt requested stating the following
- Indicate the date the relationship will end
- Suggest how to find another dentist
- Offer to forward records to the patient's new dentist or anywhere
else the patient might want records sent.
- Offer to provide emergency and interim care to the patient for
a reasonable period of time.
- Indicate current status of care and future need for treatment.
The dentist must continue to see and treat the patient until
the patient can find another dentist and a smooth transition
Patient termination of dentist
If the patient ends the relationship,
- Document the patient's decision in your dental record
- Advise patient in writing of incomplete treatment plans
- Recommend continuation of unfinished treatment
- Offer to forward records to the patient's
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Charging Interest and Fees
Proper charging of interest and fees on patient's statements can be
confusing and disturbing to the patient. A dentist may charge interest
on unpaid balances as long as the interest rate does not exceed the
State Usury Law of 21 percent per month, and late fees, missed appointment
fees, billing, and re-billing fees are not allowed unless specifically
set forth in the terms of engagement or provided by a contract between
the dentist and patient. For missed appointments, the dentist should
incorporate a waiver clause for unavoidable cancellations caused by
family emergencies, etc.
Rhode Island law provides that interest in all business transactions
is "at the rate of twelve dollars ($12.00) on one hundred dollars
($100.00) for one year, unless a different rate is expressly stipulated." [Section
6-26-1. Legal rate of interest.]
However, you may enter into an agreement with a patient to charge up
to 21 percent per year. You may not charge over 21% interest. The penalties
for charging over 21 percent are severe under the state's usury law.
[Section 6-23-3 Usury] They include voiding the contract and imprisonment
for up to five years.
Finally, before entering into agreements with patients, be sure that
the charges incorporated are not banned by the terms of the provider
agreement with the patient's dental insurance plan.
Whenever a dentist wishes to institute a charge which will be assessed
against a patient, this charge, and a clear explanation of it should
be communicated to the patient and included in the terms of engagement
or provided in a contract. The following steps can help dental offices
comply with state usury laws:
This information is provided as some guidance for complying
with state usury laws. Although it refers to state
is not, nor is it meant to be, legal advice. For specifics,
consult a personal attorney, or an accountant.
- Incorporate any terms relating to interest and fees in the patient's
terms of agreement or contract at the beginning of the dentist-patient
- Charges should be posted in the office, and made clearly visible
- A statement of interest and fees should be printed on billing
- Cancellation fees should be printed on appointment
- Do not charge illegal interest rates.
- Update patient's dental record annually to include
the terms of payment, and interest and fees.
- Do not include interest or finance charges in principal amounts when computing interest on customer accounts or when assigning accounts for collection.