Today, copays are the norm, and they're only becoming more costly. To top it off, many insurance plans — especially those that individuals and small businesses purchase (including HSAs) — have large deductibles that patients must meet before insurance will pay for anything.

While it's obvious that these increased copays and deductibles put a burden on patients, they also burden physical therapy practices. How? Many practices don't have the procedures in place for effective fee collection from patients — especially not in person.

Instead, they're willing to simply write off cash collections when the patient doesn't pay. But with declining insurance reimbursements, successful over-the-counter collections are more important than ever.

What are the implications of not collecting?

In an APTA podcast, Nancy White says, "studies show that the chance of collecting from a patient drops almost 20 percent as soon as the patient leaves the office." Anecdotally, I think it's higher — especially after patient discharge.

While some front offices may find it easier to simply mail a statement after the visit, there are usually hidden costs associated with this. In fact, according to White, there is data that indicates "it may cost between $5-$10 per patient to send and process each statement by mail."

Not to mention that when you mail statements rather than collect upfront, you're decreasing your chances of receiving payment, and there's a self-made waiting period for any payments patients do send.

Collecting up front is also easier for the patient. A final bill for six visits is far more overwhelming (and appears much more difficult to pay) than paying for each individual visit at the time or service. There's a reason infomercials always say that the magical gadget is yours in six easy payments.

Plus, collecting copays before providing services is the norm in the medical industry, especially physicians' offices.

If I don't collect, can I just waive it all?

If your practice is struggling to collect, waiving copays and deductibles is not the solution. Why? Here are four simple reasons.

1. You can't afford it

Consider this example from the APTA: A typical outpatient PT clinic has two therapists and one PTA. If patients' average copay is $25 and each clinician treats an average of 12 patients per day, that's $900 per day in revenue that patients owe to the practice. This amounts to close to $200,000 in a typical year.

What practice can honestly afford to walk away from that amount of revenue? These are the days of decreased reimbursements! It's critical that you collect the fees your patients owe. You shouldn't be embarrassed or ashamed to collect fees. You’re providing a valuable service, and the more you waive copays, the more you're diminishing the value of your practice.

And if you're worried about losing physician referrals because you're charging too much, don't. If you have any kind of relationship with your referring physicians, discussing and overcoming the issue of collecting copayment should be easy. They're in the same boat, after all.

2. Medicare considers it fraudulent

An even bigger reason why you should not waive copays and deductibles is that carriers could consider it fraudulent. Medicare and Medicaid don't allow practitioners to waive copays and deductibles, because doing so misrepresents the true charge for your services.

Although Medicare may permit waiving copays in very select circumstances, you should never assume that this will be the case. (And with third-party carriers, permission to waive is just about unheard of.)

3. Commercial carriers view it as a HIPAA violation

If you waive copays and deductibles for privately-insured patients, you run the risk of a HIPAA violation or fraud accusation because you're technically misrepresenting charges to the commercial carrier.

For example, if you waive $20 copayment on a $100 charge, then you're basically admitting that you value that service at $80. Thus, the carrier should actually owe you only 80 percent of $80 (not $100). To read about this in further detail and see another example, check out the APTA's article on waiving copayments.

4. You're worth more than this

Most carrier contracts stipulate that the total amount of payment for service includes the insurance reimbursement and the copay amount. If you're consistently waiving the copay, then you're saying that your services are worth less than they are.

Do you really want to represent yourself that way? I know I don't — and more importantly, my business couldn't run on that. When you waive copays, you're devaluing yourself. Don't do that.

What about financial hardship circumstances?

Even for patients with financial hardships, it's best to avoid waiving copays. And declaring financial hardship is not just a matter of the patient stating, "I can't afford it." Most carriers require significant documentation justifying the hardship.

Here’s an example of a hardship letter from a PT practice. If you have hardship cases, here are some options that the APTA recommends in an article on waiving copayments.

So, what do I do?

Develop procedures for collecting all patient fees (including copays, deductibles, coinsurance and payment for noncovered services and supplies) at the time of service. Don't be shy about it; this represents the value of your practice.

No matter what, though, don't sell yourself short; don't jeopardize your practice; and most importantly, remember you're running a business — you deserve to get paid because your services are worth it.

People have no problem shelling out cash for gym memberships, personal training sessions or special classes. Why would your services — services that tremendously impact and improve patients' quality of life — be any different? It's up to you to set the standard.

Effective collection keeps you in business, allows you to hire quality employees, and most importantly, enables you to provide exceptional patient care. We're empathetic, caring, good-natured practitioners, but that doesn't mean we should let anyone bamboozle us into predicaments where we endanger our license, our practice or our profession.