Collection of Deductibles in Advance of Service

The State of New Hampshire

Insurance Department

21 South Fruit Street, Suite 14

Concord, NH 03301

Roger A. Sevigny

Commissioner

Alexander K. Feldvebel

Deputy Commissioner

BULLETIN

Docket No.: INS 07-043-AB

TO:

All New Hampshire Licensed Health Insurance Companies, Health

Maintenance Organizations, Fraternal Benefit Societies and

Third Party Administrators

FROM:

Roger A. Sevigny

Insurance Commissioner

DATE:

April 02, 2007

RE:

Collection of Deductibles in Advance of Service

A question has been raised as to whether a provider may collect a deductible from

a member having a managed care product before service is rendered. This Bulletin is

intended to clarify the requirements that must be met in order for a provider to collect a

deductible in advance of providing service.

RSA 420-J:8 defines certain standards that must be contained in every contract

between a health carrier and a participating provider. These standards generally require

that the provider agree not to collect a deposit from or have recourse against a covered

person for services provided under the agreement between the health carrier and the

provider. However, RSA 420-J:8 (I) (a) does not prohibit the provider from “collecting

coinsurance, deductibles, or copayments, as specifically provided in the evidence of

coverage, or fees for uncovered services delivered on a fee-for-service basis to covered

persons.” The question presented is whether the collection of a deductible amount in

advance of service constitutes the collection of a deposit, which would violate the statute,

or the payment of a deductible, which is allowed under the statute.

It is the department’s position that a deductible may be collected in advance of

service only when the provider has actual knowledge that the member has not paid the

deductible. Actual knowledge requires confirmation from the carrier of the amount of the

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e collection of a deposit, which would violate the statute,

or the payment of a deductible, which is allowed under the statute.

It is the department’s position that a deductible may be collected in advance of

service only when the provider has actual knowledge that the member has not paid the

deductible. Actual knowledge requires confirmation from the carrier of the amount of the

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deductible that remains unpaid at the time the service is provided. A provider that does

not have actual knowledge of the amount of the deductible owing at the time service is

requested may not collect the deductible and later refund an over-collection. An over

collection of the deductible will be deemed to violate the statutory provision that

prohibits a provider from collecting a deposit from a member. Any contractual provision

or other notice issued by a carrier that advises providers that they may collect deductibles

without actual knowledge of the amount of the deductible then owing and later refund the

over-collection shall be considered a violation of RSA 420-J:8.

Questions should be directed to Leslie Ludtke at the New Hampshire Insurance

Department.

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