It doesn’t matter how you accept payment for the services and programs you provide.  There may come a time when you wonder, “Is there any recourse for me not getting paid for services rendered?”  Well that takes us into today’s Tuesday Q&A.

QUESTION:

Lynnelle wrote in:  “I have a question, if someone has a small counseling practice (LLC) and sees medicaid clients, are they able to write off, as a loss, the money they did not receive in reimbursements for sessions on their taxes? This would be due to clients’ insurance not being active for certain periods of times.”  

Lynelle then provided additional information about her situation, saying, “I am currently contracting with a group/independent living home so my clients are teens ranging from 17 to 21 years of age who are on Medicaid. I am not always aware at the time of seeing my clients that their insurance collapsed but once made aware I have continued to see them.  Some of the times I discovered that the young ladies do not have straight Medicaid.  Instead, they had Healthkeepers Plus, part of Medicaid, and I still saw them.”

ANSWER:

Here I could see a few challenges going on in Lynnelle’s question.  It was obvious that providing care to her clients, whether they could pay or not, was important to her.  On the other hand, there seemed to be a need for more insurance verification within her practice and possibly negotiations with the group home to receive payments from them directly.  

Here are a few things to consider when dealing with this type of business situation:

• First check with a tax professional in your state. What is allowed can vary from state to state. 
• Providing counseling sessions when you know there is a lapse in insurance is like working Pro Bono.  You already know the person has no insurance and no means of paying your fee.  Therefore, your decision to render services means you accept the current situation. 
• If you have a contract that states client is responsible for any outstanding charges and they do not pay for services, that is different.  In that case, you have an agreement with the individual and if they fail to honor the contractual agreement, they are still responsible.  When working with a minor, the person responsible is the guardian.  If they never pay, you may be able to write this off.
• When you are seeing a client who loses insurance but then it starts up again you can ask the insurance company if they will pay retroactively.  It is totally up to the insurance company but it never hurts to ask and in some cases an insurance company has agreed to do so. 
• Do you require clients to pay when their insurance does not cover?  Think about renegotiating your contract, in this case with the group home, so that they pay you directly for offering counseling to their current residents. 
• Verify insurance for all clients before their appointment, since this seems to be a reoccurring issue.  You may want to consider hiring a billing company or do this yourself, if you don’t renegotiate with the group home.

Have YOU ever had this happen?  How did you handle it?
In your client agreement, do you cover who is responsible if insurance does not cover a session, whether due to lapse in insurance or some other reason?

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