The Complete Guide to Surgery Cancellation Fees for Practices

The Complete Guide to Surgery Cancellation Fees for Practices

Patients backing out of surgeries throw schedules into disarray and can cause costly repercussions for the practice. It’s a perennial problem affecting providers and there is no silver bullet solution.

One way to minimize surgery cancellations and delays is to charge a surgery cancellation fee. While levying fines may reduce last-minute dropouts, there’s more than just the bottom line to consider.

“We have a surgery cancellation policy for a couple of our surgeons, but we don’t have a change fee,” said a practice manager at a Colorado-based clinic. “We charge for cancellations in most cases, to discourage future cancellations, but in extraordinary circumstances, we’ve waived the fee.”

In this article, we’ll explore points in favor and against charging a surgery cancellation fee.

The Guide to Charging Surgery Cancellation Fees

A surgical patient on the phone to cancel their surgery

What is the Best Approach to Handling Patient Cancellations for Surgeries?

In the following article, we will explore the pros and cons of billing for canceled surgeries and when it is beneficial for surgical practices to charge patients who cancel surgeries.

The Case for Charging A Surgery Cancellation Fee

A surgical patient cancelling their surgery online

Every scheduler has been there. The surgery schedule is perfectly organized, and then something happens the day before to throw the entire day into shambles. It’s too late to slot in a replacement surgery, so the surgeon loses their cool. It’s frustrating for everyone.

No wonder management fantasizes about how to penalize patients who cancel at the last minute. While your powers of “punishment” are limited, one way surgical practices deal with patients who wreak havoc with the schedule is to disincentivize cancellations.

Why A Change or Cancellation Fee For Surgery Is Justified 

While canceling or not showing up for surgery may seem insignificant to a patient, it has costly ramifications for the surgeon and practice. Although some surgical practices think the idea of charging for changes or cancellations is a no-go, others have had enough of paying for their patients’ indecision and have implemented a change or cancellation fee.

A surgical patient cancelling their surgery online with their laptop

It’s not hard to understand why some practices are making this – admittedly controversial – move. The surgeon is usually paying for the use of the OR or ASC rooms. And if the patient doesn’t show up, the surgeon can kiss any financial compensation for this slot goodbye – not to mention the expense of the surgical, nursing, and ancillary staff who are also involved in the procedure.

The cost of surgery cancellations can equal thousands of dollars for each canceled procedure.

And that’s not even taking into account the time and work that went into scheduling and coordinating the surgery in the back office – from setting up the appointments to making sure all the surgical scheduling paperwork was in order and the insurance companies were on board.

With so many stakeholders put out by just one cancellation, requesting a symbolic surgery cancellation fee is reasonable, even just to make patients think more carefully before canceling or postponing their surgery.

Advantages of Implementing A Surgery Cancellation Policy

A surgical patient thinking bout cancelling their surgery online

Reducing Cancellation Rates For Surgeries

Willamette ENT in Salem, Oregon charges for cancellations and date changes. The practice charges a $100 cancellation fee, which wavering patients find just enough of a burden to deter them from canceling.

The practice did not make the change or cancellation fee for surgery decisions lightly. “We had many conversations about this before we finally wrote and implemented a policy,” explains Teresa Bailey, R.N. Surgery Scheduling / Preauthorization Manager at Willamette ENT. “The schedulers, doctors, and surgery center staff were becoming so frustrated with the number of surgery reschedules and cancellations we were experiencing. It was especially frustrating for the surgery schedulers as they were spending so much time rescheduling cases and refilling surgery blocks at the last minute.”

Willamette ENT is upfront about its surgery cancellation fee so patients do not feel misled or uninformed. The surgery cancellation policy is included in the patient packet that each patient reviews and signs at their first appointment.

Discouraging Last-minute Surgery Cancellations

The practice also has a policy for last-minute surgery cancellations. They charge a fee of $250 if a patient cancels their surgery less than 24 hours before it is scheduled to take place.

Interestingly, it has rarely had to be implemented and Willamette ENT has found that cancellation rates dropped significantly after implementing the new policy. Often, just the mention of the charge is enough to get a patient to keep their date as scheduled.

The Case Against Charging a Surgery Cancellation Fee

Though billing a patient for a canceled surgery may seem reasonable and fair to a practice from a business perspective, patients may perceive such punitive measures as an infringement on their rights. It’s their body, their surgery, and ultimately their decision. Surely it’s their right to back out of surgery, too.

Disadvantages of Billing for Canceled Surgery

Patients Will Leave the Practice

Today, patients consider a visit to a physician no different from that of any other service provider. As with any business, if the service isn’t up to scratch, or the terms attached are less attractive than those offered elsewhere, customers will make their dissatisfaction known. They will likely take their business elsewhere, but not before letting everyone else know.

Negative Publicity

Whereas in the past a disgruntled patient made do with a stern letter addressed to senior management, today, grievances are posted on social media in a heartbeat.

Real or imagined, it’s your word against the patient’s – and negative publicity spreads fast. If your practice is active on social media, be prepared to deal with negative feedback when patients discuss their issues with you – and your surgery cancellation policy – online.

Counteractive Impact on the Patient

A surgical patient thinking about cancelling their surgery on a smartphone

It’s clear why canceling patients might resent paying a fine after the fact, but what about patients deliberating whether to have surgery in the first place? How could the prospect of paying a surgery cancellation fee weigh on the mind of a patient getting cold feet over elective surgery? There are various factors patients typically weigh up before committing to a surgery, such as:

  • The risk of the procedure itself
  • Convalescence and rehabilitation
  • Pain and discomfort

But on top of them, patients heavily consider the financial implications. This is especially true for people in distressed economic situations or those lacking job security and fearful of taking extended sick leave.

It’s in these touch-and-go cases that a cancellation fee for surgery may be the final push that tips the scales in a no-surgery decision – even when the procedure is necessary for the patient’s wellbeing.

Perhaps without the added stress of a financial repercussion to consider the patient would have had the peace of mind to arrive at a more prudent decision about their future.

Limitations on Implementing A Surgery Cancellation Fee

To help you decide whether or not to introduce a surgery cancellation policy to minimize surgery cancellations and delays, it’s worth taking the following factors into account.

You Can’t Charge All Patients Who Canceled Surgery (Even If You Want To)

There are strict rules governing which patients can be charged for cancellations or no-shows. Medicare or Medicaid patients are exempt from paying a cancellation charge; a factor that Teresa Bailey explains is burdensome. “The schedulers get frustrated by this rule since canceling, no-shows, and rescheduling has been a big problem with some of the Medicaid patients.”

Some Things Are Just Out of Your Control

A surgical patient dialing their phone to cancel their surgery

While you might be considering instituting a policy of tough love with your patients who canceled surgeries, don’t be too rigid. Penalizing patients for illness, family emergencies or issues out of their control will probably not get your practice raving reviews on social media.

The potential reputational risk is why many surgical practices continue to absorb the cost, despite the hassle and annoyance.

Willamette ENT does not charge for cancellations that are caused by reasons out of patients’ control. Even a patient who becomes too stressed by the idea of surgery and cancels their procedure is not charged. With this surgery cancellation policy, the practice maintains fair play on all fronts.

Give Patients Full Disclosure

Before reaching the stage of charging a surgery cancellation fee, perhaps you need to think about how your practice presents the cancellation policy to your patients. Think about implementing a 24-hour grace period (just like booking a flight on some airlines) in which any change will not be penalized.

Sometimes, people think they are free when they aren’t and the pressure of committing to a date makes them say yes when they should say, “Let me think about it.”

This works for Willamette ENT, which suffered from patients choosing surgery on dates that were unworkable. Now, even the threat of being charged a fee motivates patients to carefully check their schedules and stick to their surgical dates. It’s a tactic that is working for their practice.

Timing is Everything For A Surgery Cancellation Policy

If, in the end, your practice decides that certain circumstances do warrant a surgery cancellation fee, you need to decide when and how to inform the patient.

Raising the subject at the outset might put the patient off the idea of surgery altogether – or at least through your practice. Fail to mention it at all and you could be pilloried by patients who bail at the last moment for not being transparent enough.

Probably the most effective time to bring up the surgery cancellation policy is when the patient commits to surgery and a date is chosen. Then, they understand that the time allotted to them could be used by another patient.

Correct timing and tone when billing for canceled surgeries are needed to avoid a lose-lose outcome for the practice.

Alternative Options for Reducing Cancellation Rates for Surgeries

A surgical patient dialing their phone to cancel their surgery last minute

Whether you are still undecided about introducing a cancellation fee for surgery or are looking for a compromise solution to prevent surgery cancellations, the following suggestions can help you implement a ‘middle-of-the-road’ policy.

Prevention Is The Best Solution

While the interest of the patient is of supreme importance, it must not be allowed to undermine sensible business practices.

Remember, the surgeon, PA, and schedulers have already invested collective time and energy in getting the patient this far in the journey to the OR.

Rather than imposing a surgery cancellation fee, the effort to reassure patients uncertain about surgery should be redoubled. While this requires a greater investment of resources on the part of the doctors and staff, the case to be made for scheduling more surgeries is compelling. Patients should never feel under duress to have surgery unless it is life-threatening.

Sweetening The Pill

If your practice is undecided on this issue, there are creative ways to soften the impact of a full-on surgery cancellation fee policy. These can include variable rates, for example:

  • Charging the full fee if they cancel the surgery less than 48 hours before the scheduled date
  • A reduced charge of only 50% of the fee if the surgery is canceled less than a week before
  • Charging no fee at all if they cancel before then

Practices can also show flexibility when it comes to the reasons patients give for canceling, affording them the freedom to judge case