Penney Wise But a Lot More Than a Pound Foolish

By Stuart E. Hoffman, DC, FICA
ChiroSecure President

Pre-paid care plans are a growing trend in chiropractic and are a centerpiece of many cash practices. Regulators have challenged such arrangements in many jurisdictions, but the recognition of a consumer’s predominant right to contract and purchase a quantity of services appears to be winning out. How the chiropractic practitioner chooses to view their responsibilities and those of the patient in such arrangements can make all the difference. Here is a case in point.

A 49 year old female patient presented with headaches, soreness in the upper body, fatigue and difficulty sleeping. After three visits, the individual experienced rapid and significant relief of her symptoms. Based on her positive experience, the patient entered into a one-year pre-paid care plan, making a one-time payment according to a written policy the practitioner had presented.

Within a month, following regular care, the individual reported her previous symptoms, particularly headaches and some “disorientation” had returned and she sought additional evaluation and care from the doctor of chiropractic with whom she had her care plan. After additional evaluation and a series of additional adjustments the symptoms did not improve. The doctor of chiropractic conducted additional tests and indicated to the patient that he felt they had an advanced inner-ear condition that was impacting her balance and causing pain. He referred her to a medical specialist, and the patient followed up on the referral.

The patient did not resume chiropractic care and after a period of six weeks, the doctor received a letter from the patient expressing their wish to terminate the pre-paid contract and seeking a refund for the unused portion of the pre-paid fee. The contract was based on a reduced fee for pre-paid services, thus providing the patient with a significant discount over per visit charges. In response, the doctor calculated the “value” of the services already provided at the full retail value and deducted that enhanced amount from the full pre-paid fee and issued the patient a refund check. The difference in the refund with the retail calculation was an additional $457 in favor of the provider,

The patient expressed disappointment in a second letter, having received considerably less that she anticipated and requested the full refund she believed she was due, based on the written provisions she was shown before she entered into the contract. The doctor declined, and a series of increasingly combative letters went back and forth, with no change in the position of either party.

Nearly four months after the issue of the refund was raised, the patient filed a complaint with the state’s regulatory board, as well as retained legal counsel in preparation for a malpractice lawsuit. The doctor contacted their malpractice carrier, whose coverage included state board incidents and complaints and was strongly advised to live up to the exact terms of the agreement they had entered into with the patient.

Representatives of the malpractice carrier quickly entered into discussions with the attorney retained by the patient and in a negotiated settlement any malpractice suit was dropped, in exchange for costs and the full refund. The resolution with the state board was not so easy. The complaint from the patient was investigated for several months and the issue of unprofessional conduct became the basis on which the board proceeded to discipline the provider. The doctor’s license was put on probation for six months and a fine of $900 was levied.

The lessons of this example are clear and compelling. Know the exact terms of the rules and regulations regarding pre-paid plans in your jurisdiction and follow them religiously. Equally important, you must recognize how important the good will of the patient is, even if a few hundred dollars is at stake. This does not mean that we are suggesting that you bow to every refund request however, you must look at each situation and determine the merits from the patients point of view Vs the potential for a negative follow up that you will get to deal with. In our contemporary society, consumers are regularly encouraged and empowered to stand up for what they believe are their rights. We in the chiropractic profession also face a legal situation where there is an attorney around every corner ready, indeed eager, to egg on any consumer, no matter how flimsy the real complaint might be, to take legal action. All of this can be avoided by the application of cautious and wise thinking. It is truly worth it in the long run.