Q. Can I charge interest on a patient balance?
A. Yes, but tread carefully or risk violating the law. You should always consult with legal counsel when crafting a policy regarding interest of overdue accounts. Also, you must apply the policy consistently to all patients.
Physicians are allowed to charge their patients interest under certain circumstances as specified by state and federal law, as long as the interest rate is below the ceiling specified in state law and published monthly in the Texas Register. You also can find the ceiling rate in the Texas Credit Letter published by the state Office of Consumer Credit Commissioner.
To charge interest, you must have a written agreement with the patient. Physicians may charge a very low interest rate without a contract. The allowable rate, specified by state law in Texas Finance Code §302.002, currently is 6 percent beginning the 30th day after the date on which the amount is due.
It would be ethically and otherwise preferable to notify patients in advance of charging any interest amount, as directed in American Medical Association Ethics Opinion 6.08 — Interest Charges and Finance Charges, which says in part:
The patient must be notified in advance of the interest or other reasonable finance or service charges by such means as the posting of a notice in the waiting room, the distribution of leaflets describing the office billing practices, and appropriate notations on the billing statement.
Source: TMA’s You’ve Got Questions? We Have Answers, a collection of FAQs from the TMA Knowledge Center. TMA members can ask the TMA Knowledge Center questions at www.texmed.org/findanswers/, or by calling (800) 880-7955 or emailing knowledge[at]texmed[dot]org.
Published July 12, 2016
TMA Practice E-Tips main page
Last Updated On
December 06, 2016
Originally Published On
July 12, 2016