When you find yourself in a situation where a patient is dissatisfied with their treatment and requests a refund, how should you respond? For instance, you might believe your work is satisfactory and be reluctant to issue a refund due to your time invested in their care. Alternatively, you may seek a quick resolution. This article will explore practical ways to manage patient refund requests.
Factors to Consider When a Patient Requests a Refund
Issuing a refund to an unhappy patient may seem like a straightforward solution to address what can be an unwelcome and complex patient dispute. However, there are several issues to consider, some of which may not be immediately obvious. Therefore, before considering a full or partial refund for a patient, you should reflect on the following issues:
Additionally, will the refund trigger an obligation to file a report with the National
Practitioner Data Bank (NPDB)? It depends. The NPDB information website states:
Payments by Individuals1
Individuals are not required to report to the NPDB payments they make for their own benefit. Thus, if a practitioner or other individual makes a medical malpractice payment out of personal funds, the payment should not be reported. However, a professional corporation or other entity composed of a sole practitioner that makes a payment for the benefit of a named practitioner must report that payment to the NPDB. (See next section.)
Previously, the NPDB had required that all medical malpractice payments made on behalf of a practitioner - even payments made out of personal funds - be reported. However, on August 27, 1993, in American Dental Association v. Shalala, the U.S. Court of Appeals for the District of Columbia Circuit held that an NPDB regulation requiring a report from each “person or entity” making a medical malpractice payment was invalid when applied to payments made by a practitioner on his or her own behalf, because the regulation was inconsistent with statutory language requiring any “entity” to report medical malpractice payments to the NPDB. The NPDB removed previously submitted reports on medical malpractice payments made by individuals for their own benefit.
The payment amount is irrelevant; there is no de minimis exception. Furthermore, payments not made in connection with litigation (e.g., those resulting from professional peer review proceedings) may need to be reported. Peer review committees and others investigating and resolving patient complaints against practitioners should consider informing practitioners of reporting requirements before making a payment.
Patient Refunds are Not a One-Size-Fits-All Situation
Despite the guidance above, consulting with a local attorney is always highly recommended. According to your state law, there may be stricter requirements for so-called refund payments.
Whether to offer a refund of fees must be decided on a case-by-case basis. Consider it a business decision; most practitioners want patients to have a good experience. A full or partial refund can be acceptable (a refund is not an admission of liability) to satisfy a customer. Clarify to the patient that the treatment in question was appropriate. The aim of providing the refund is to enhance customer satisfaction. If refunding all or part of the fees achieves that, you are open to discussing a settlement.
When considering whether to offer a refund, consider whether the treatment, which is the source of the complaint, was performed as intended. For instance, does the patient's complaint reflect a common procedure complication or a deviation from accepted standards of care? In the latter case, quickly settling the dispute is wise. Generally, refunding a fee is a small price if it can prevent a board complaint or a lawsuit.
Negotiating the Patient Refund and What a Settlement Looks Like
If an insurance carrier covered the treatment partially or entirely, you must inform them about refunding the patient. Once you clear that hurdle, be prepared to negotiate the refund amount; start with a percentage of what they request and work towards a mutually agreeable settlement. Avoid negotiating via text message, email, or with an unauthorized third party (potential HIPAA violation). Instead, it’s best to have discussions in person or over the phone. If the patient involves an attorney in the negotiation, you should stop communication with them and notify your malpractice insurance carrier.
Should every refund be accompanied by a release of liability? The simple answer is no. The value of a “release” lies in its ability to memorialize the settlement terms; for example, it clarifies that the refund does not constitute an admission of liability, thus helping to prevent future mischaracterization. It also indicates that the parties have negotiated and agreed upon the terms. Requesting a release of liability before dispensing any funds is a case-by-case determination. Factors to consider include the emotional state of the patient, the refund amount, and the potential threat of a lawsuit, all of which are relevant. While releasing liability is prudent in certain disputes, it is never an absolute “bar” to the patient initiating subsequent legal or regulatory action. Do not distribute funds until the patient signs the document regarding the release. Sometimes, patients may refuse to sign a “release”; however, this should not hinder the agreement. If you choose to proceed without a “release,” the patient cashing the refund check is some evidence of your goodwill in assisting the patient and settling the dispute.
1. https://www.npdb.hrsa.gov/guidebook/EMMPR.jsp
Disclaimer: The information contained on the DentistCare Blog does not establish a standard of care, nor does it constitute legal advice. The information is for general informational purposes only. We encourage all blog visitors to consult with their personal attorneys for legal advice, as specific legal requirements may vary from state to state. Links or references to organizations, websites, or other information is for reference use only and do not constitute the rendering of legal, financial, or other professional advice or recommendations. All information contained on the blog is subject to change.