Is it legal and ethical to charge for no-shows?

No matter how streamlined your practice is when it comes to booking patient appointments, the reality is that every so often (and sometimes more) patients will fail to arrive for their scheduled visit.  Extenuating circumstances aside, no-shows are not only frustrating but can have a negative impact on your practice’s revenue.

In an attempt to avoid the consequences of no-shows, many medical practices have enforced a cancellation policy that typically holds patients liable for a portion of or the full consultation fee if appointments are not cancelled 24 to 48 hours in advance. Although this may sound reasonable, many practitioners question whether it is ethical to expect patients to pay for a missed appointment. Or how to treat cases when patients weren’t able to make their appointment due to an emergency or circumstances beyond their control? And most importantly, what steps can you take to ensure you don’t breach any ethical guidelines in an effort to protect your practice financially?

What does the HPCSA say?

According to the Health Professions Council of South Africa (HPCSA) it’s against the guidelines of their ethical rules to charge a patient for services that were not rendered. The ethical rules state that: “A practitioner shall not charge or receive fees for services not personally rendered, except for services rendered by another practitioner in his or her employment or with whom he or she is associated as a partner, shareholder or locum tenens.”

However, charging for no-shows isn’t as black and white as the HPCSA ethical rule indicates.  According to Section 17 of the Consumer Protection Act, a consumer has the right to cancel any advance booking reservation or order for any goods or services to be supplied. It also states that a supplier, or healthcare provider in this case, who makes a commitment or accepts a reservation to supply goods or services may impose a reasonable charge for cancellation of the order or reservation, and a charge is unreasonable if it exceeds a fair amount in the circumstances, taking into account:

• The nature of the goods or services that were reserved or booked.
• The time the notice of cancellation was provided by the consumer/patient.
• The reasonable potential for the service provider, acting diligently, to find an alternative consumer between the time of receiving the cancellation notice and the time of the reservation that was cancelled.
• The general practice of the relevant industry.

The Consumer Protection Act also states that you may not impose a cancellation fee if the person making the appointment was unable to honour the booking because of a valid medical emergency (specifically death or hospitalisation).  

Although almost two decades old, in October 2001 the  Medical and Dental Professions Board made an ethical ruling that a patient reserves the right to cancel a medical or dental appointment, and a medical or dental practitioner may not charge a consultation fee or a procedure fee for such a cancelled appointment unless:

• A cancellation was made less than 24 hours for a specialist appointment and less than two hours for GP appointment, before the appointment time.
• A practitioner can provide evidence of failure to find an alternative patient between the time of receiving the cancellation notice and the time of the cancelled appointment.
• The practitioner can provide sufficient proof that the patient was informed about the cancellation of appointments policy.
• The practitioner has first established the reasons for the patient’s failure to cancel or honour the appointment.

How to implement an ethical ‘no-show’ policy

Taking the above information into consideration, you may still be confused as to whether or not to implement a cancellation policy. While the HCPSA is clear that charging for services not rendered is unethical, there is some grey area with regards to whether enforcing a late cancellation fee is the same as charging for services not rendered.

• Spend time assessing the current impact of no-shows

A good basis for your decision may include looking at your practice data to understand the true impact of missed appointments and any associated patterns. If no-shows are having a marked impact on revenue, then it is worth considering a cancellation policy. While it’s important to enforce the policy, if you decide to implement it, simply having a policy in place could serve as a deterrent for patients who would readily not show up for appointments. The policy effectively makes them give consideration to their own financial loss that could result from their actions.

• Ensure that you inform your patients of new policies

If you decide to implement a cancellation or no-show policy it’s critical to inform your patients at the time of booking and on other forms of patient communication. Practice staff should also be well versed in courteously explaining the policy to patients, clearly stipulating that they will be liable to pay X amount, or the consultation fee in full, if they fail to arrive for their appointment.

• Help patients remember their appointments

Another important step towards minimising no-shows is to be proactive in your communication with patients. Making use of automated SMS reminders is an effective way to jog your patients’ memory about their upcoming appointment, leaving them enough time for them to cancel if necessary. If you don’t have a practice management solution that offers automated SMS, you could make use of other reminder methods, such as email or even a quick phone call. If the patient makes the appointment in person, your receptionist can give patients a completed appointment card as a hard-copy reminder.  

If you are still undecided about whether or not to charge for no-shows, there are other ways to discourage missed appointments.  Introducing a discounted pre-paid appointment option, whereby patients pay for their consultation upfront, will mean they are far more likely to keep their appointment. Again, the impact of implementing this strategy and others should be informed by your practice management data. Using the information you have on hand can help you quickly and easily assess the risk to your practice and gives you a good basis to decide which options are best for your business and patient relationships.

Contact us about how we can help you access your practice data to make informed decisions.