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Five years ago, few people had ever heard of a flex or a cafeteria plan.

Today, up to 25% of "insured" patients have such plans and we see more and more instances where patients have traditional insurance as well as a flex plan.

While there are variations on the theme, a flex or cafeteria plan allows employees to dedicate a pre-determined portion of their paychecks to be set aside for the purpose of paying for health care.

-------------------------------------------------------------------------"It behooves doctors and staff to learn how they can use the plans to help their patients accept a higher level of care."
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Once the employee (patient) provides proof of payment of a health care bill to the employer, the dedicated funds are paid to the employee without federal or state tax deductions.

It behooves doctors and their staff members to learn all they can about how these plans work and, more importantly, to learn how they can use the plans to help their patients accept a higher level of care.

Flex/Cafeteria plans have caused some of our doctors and their administrative staff to become really creative in filing claims and assisting their patients in dealing with these plans.

Unfortunately, a few offices have crossed the line from simply being creative and helpful to committing out and out tax fraud.

Consider these telephone calls that have come into our office support program during the past couple of months:

"Our Phase II case fee is $5,000 but the patient gets a 20% ($1,000) discount for having been in Phase I. The patient has asked us to leave the fee at $5,000 so he can file a claim for the full case fee with his flex plan. Then, when the entire $5,000 account balance is paid off, the patient wants us to write him a $1,000 refund check. Will we get in trouble if we do that?"

"The patient has written us a post-dated check for $2,100 for payment in full for a bridge we have already done. She has asked us for a receipt showing the payment so she can take it to her flex plan administrator for payment. When she is "reimbursed" by the flex plan, she will make a deposit and cover our check. Since this is one of our best long-term patients, the doctor said to go ahead and give her the receipt. Should we?"

"We started orthodontic treatment right after Christmas but we have found out the patient’s flex plan won’t pay in 1999 for treatment started in 1998. Since it is only a couple of days difference, can’t we just tell the flex plan that treatment was started in January?"

----------------------------------------------------------------------------------------------------------------------------"You will have far better case acceptance if you agree to work with your patients to identify the amount of flex coverage they have available."
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In each of these cases, the practice has assisted, or is being asked to assist, the patient in committing tax fraud!

Remember that flex plans are federally inspired mechanisms to allow people to pay for health care with before tax dollars.

Any "manipulation" that is done to get patients flex benefits they would otherwise not be entitled to is actually assisting them in defrauding the US Government.

This is not simple insurance fraud. The IRS is not likely to slap your hands, send you a warning letter, or give you a small fine, which is often the case with first time insurance "billing errors."

Even if the doctor were not convicted of a crime, how would you like the headlines in your local newspaper to say, "Local doctor under investigation for assisting his patients to commit tax fraud!"

This is a far-fetched scenario but some of the flex/cafeteria plan manipulation I have seen recently makes that scenario all too possible.

Flex plans are a terrific benefit for patients and for dentists and there is every reason to believe there will be more employers offering such plans in the future.

You will have far better case acceptance if you agree to work with your patients to identify the amount of flex coverage they have available, exactly how that coverage will be paid, and whether or not the benefit will be paid directly to the practice.

With that information in hand, it is perfectly reasonable to accept assignment of a flex plan benefit just as you would with traditional insurance, assuming you are able to confirm those three issues.

----------------------------------------------------------------------------------------------------------------------------"Welcome the flex plans as a true benefit."
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Our overall recommendation is to welcome the flex plans as a true benefit to your patients and to your practice, to learn all you can about them, and never, never, fudge the rules, never change dates, and never give receipts for money not actually paid.

Play it straight with these plans and you will do very well with them.

Reprinted from the Winter/Spring 1999 Zuelke & Associates Newsletter.
Written by Paul Zuelke.

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