Are doctors’ ‘administrative fees’ legit?

Primary care and specialist physicians are saddled with evermore administrative tasks — haggling with insurance companies, gaining prior approvals for medications, maintaining electronic health records — and all of that comes at a cost in time and the personnel needed.

Insurance reimbursements don’t keep pace. In fact, they seem to shrink year by year.

To cover some of those costs, it appears that a growing number of doctors are charging their patients a little extra, usually called an “administrative fee.” While it's difficult to pinpoint an exact number, it’s something that’s happening more frequently.

Some examples:

• Answering patient emails: Responding to patient inquiries that require a detailed explanation.

• Getting medical advice: A patient may subscribe to have a certain number of phone consultations a year.

• Not having to pay for a missed appointment. If you don’t cancel an appointment 24 hours in advance, or whatever the policy is, you wouldn’t get billed for a co-pay.

• Filling out forms: Completing paperwork for insurance, employers or other entities takes extra time.

• Faxing documents: Sending documents to employers or other third parties can be charged as an administrative fee.

• Calling in prescriptions: This requires staff time and can involve contacting multiple pharmacies.

Can they do this? Yes. Even if they accept Medicare and commercial insurance, it’s legal for doctors to charge administrative fees for services that aren’t covered by insurance.

Don’t confuse this with direct primary care. Under this model, a patient pays a monthly or annual subscription to have unlimited access to their doctors without the hassles of health insurance. This type of care typically doesn't cover emergencies, specialized care, tests or hospital stays, so a patient may still need insurance.

Practices that charge administrative fees are adopting the subscription or membership model, but they still bill a patient’s insurance for covered services. The American Medical Association includes a section in its Code of Medical Ethics titled “Fees for Nonclinical & Administrative Services” to guide its members.

These administrative fees can be charged on a per-item basis, or on an annual basis, usually $100 to $200 a year.

But there are some considerations for providers, and you should know what these are if you suddenly encounter administrative fees at your doctor’s office.

Providers should first look at the socioeconomic realities of their patients’ lives and decide whether collecting a fee is fair or even feasible.

Then, they should let patients know well in advance — at least 60 days ahead of time — that an administrative fee will be collected and how much it is to give patients the opportunity to change doctors if they want to. Medicare requires its doctors to provide an Advance Benefit Notice, or ABN.

It has to be very clearly communicated what the fees pay for, and it can’t be something that’s already covered by insurance, such as a telehealth visit. (You may recall that I mentioned in a recent column that Medicare coverage for telehealth visits, a benefit left over from the pandemic, was due to expire at the end of March. It’s now been extended to the end of September.)

There should also be a plan in place for patients who refuse to pay, such as allowing patients to opt out of paying the fee or referring the patients to another physician. This is where a doctor’s reputation may be at risk, if patients complain publicly about fees.

What else might you get for your $100 or $200 a year? This is anecdotal, but a friend recently told me that she called her doctor to get an appointment, but there were none available. When they saw she had paid the annual administrative fee — “They saw I was a member,” she said — an appointment time magically opened up.

Paying for access to an appointment doesn’t seem to me like a non-billable administrative expense, and it begins to make the health care playing field a little more uneven than it already is. If you can pay the hundred bucks, you can get an appointment. If not, well, it’ll be six weeks before we can get you in?

I don’t begrudge physicians their administrative fees. They should, however, be very transparent with their patients on what exactly they’re paying for.

• Teri (Dreher) Frykenberg, a registered nurse, board-certified patient advocate, is the founder of www.NurseAdvocateEntrepreneur.com, which trains medical professionals to become successful private patient advocates. She is the author of “How to Be a Healthcare Advocate for Yourself & Your Loved Ones,” available on Amazon. Frykenberg offers a free phone consultation to readers. Contact her at Teri@NurseAdvocateEntrepreneur.com.