Excess and shortfalls are the biggest headaches any private medical practice will face. You will not stop them despite what you may think so you MUST have a process in place to identify them and action them.
What are excess and shortfalls?
Just like your own car insurance when a patient takes out medical cover, the policy will have an excess. For example, the patient is liable for the first £100 or £250. The value of the excess will be dependant on the precise details of the policy.
Normally, lower insurance premiums are accompanied by higher excess amounts and vice versa. You may, of course, ask the patient what excess his/her policy has and that will help. But that will NOT stop you from having excess deductions made against any payment for your services made to you.
Each private medical policy will have its own maximum entitlement figure. This is known as the benefit payable.
For example, the total benefit that may be paid out under a policy says £12,000 in any one year (just an example to illustrate the point).
That seems fine until you realise the average cost of a hip replacement in the UK is currently around the £11,500. If the patient requires additional consultations (say £500 worth) and additional costs appear (another £350 for example) then the total cost will soon exceed the total benefit of £12,000 i.e. the total medical fees of £12,350 is greater than the benefit payable.
Thus the shortfall (the patient’s liability) in this example is £350.
If there is already a £100 excess on the policy and a £350 shortfall, the patient’s personal liability to you will be £450.
This may be an extreme example but it is the principle that is important to understand.
In reality shortfalls and excess payments are normally around the £75 to £100 mark respectively. That doesn’t seem a lot but have 10 shortfalls/excess a month and over that one month, you will be owed £750 by your patients personally.
Over a year you will be owed £9,000.
That is why excess/shortfalls are one of the biggest problems faced by a private consultant surgeon.
Once shortfalls/excess have been identified (preferably as they are actually deducted from payments made to you), you must have a robust process in place to manage them. That can only be done one way.
You MUST CONTACT THE PATIENT, there is simply no alternative.
The first thing to do is to send your patient an invoice for the excess or shortfall.
This should include how much to pay and how to pay it. If this invoice is ignored by your patient then the best solution is to telephone the patient and ask for payment. The longer an invoice for excess or shortfall remains outstanding, the likelihood of it being paid reduces.
You must act quickly: preferably every single week.
Whatever you do, therefore, do NOT under any and all circumstances leave excess and shortfall amounts unattended.
Excess and shortfalls can simply build up and up to the point where you realise you are owed thousands and thousands of pounds with little chance of getting paid.
Consider it this way.
You cannot prevent excess and shortfalls from happening.