You’re familiar with the restrictions placed on medical professionals by HIPAA and other laws regarding patient privacy. After all, patients need to feel secure, trusting that practices can be counted upon for their confidence and discretion. Doctors who value doctor-patient confidentiality take many steps to make sure their teams comply with all the legal and ethical safeguards.

But what practices can or cannot say to the patients are sometimes overlooked. This is especially true regarding financial transactions, where laws and statutes never written for medicine, still apply. It’s in your best interest to occasionally review your discussions with patients to ensure you are fully compliant with all pertinent regulations.

At ALPHAEON CREDIT, we know that the logic of financial regulations can often feel worlds apart from a practice’s goal of helping patients. So to help clarify, we’ve compiled a list of the top three things that you can’t say to a patient.

You can’t say “No Interest” or “0% Financing”

Well, you can, but only when you follow with additional information about potential charges.

WHY NOT?

Over 50 years ago, Congress passed the Truth in Lending Act (TILA). Included in this act was a provision called Regulation Z. Regulation Z requires that lenders disclose the interest rate and certain fees when you apply for a loan and at regular intervals after. ALPHAEON CREDIT and our financial partners inform patients at those regular intervals as required by the law, but when discussing financing with a patient, they need to understand what they’re agreeing to.

The act has been modified and expanded since the 1960s, including a 1988 change that specifically focused on credit cards.

Regulation Z considers “no interest” or “0% financing” to be a “trigger term.” A “triggering term” is a phrase that must automatically “trigger” further disclosures.

According to the guidelines published by consumerfinance.gov, “If the phrase ‘no interest’ or similar term regarding the possible avoidance of interest obligations is stated, the term ‘if paid in full’ must also be stated in a clear and conspicuous manner preceding the disclosure of the deferred interest period.” It is especially important that all printed and marketing materials communicate this clearly. Always offer a brochure with financing information to your customers, this will help them evaluate their options. If you apply on their behalf, you will also need to provide them a credit card agreement form as well.

When discussing Deferred Interest Payment Plans, it must be clear to the patient if they fail to make their payments and pay off the balance within the promotional period, they will be charged interest for the entire purchase amount. The patient needs to understand that not paying their promotional plan balance in the required time may cost him or her additional hundreds or thousands of dollars.

WHAT CAN I SAY?

Instead of “We offer no interest plans,” you may consider saying, “We offer 12-months no interest financing if paid in full within 12 months. If the entire purchase amount is not paid within the 12 month period, you will be charged retroactive interest back from the date of purchase, which often can amount to hundreds or thousands of dollars.”

This is for verbal conversations. If you promote deferred interest payment plans in print or online, you must include additional disclosures.

Sometimes, practices are worried that these disclosures are going to scare off potential patients from choosing to finance. However, we believe disclosures (besides being required by law) create trust by empowering patients to make educated choices regarding financing options.

You can’t say, “We offer financing, and charge a small fee if you use it.”

As a matter of fact, you can’t charge a fee for financing at all.

WHY NOT?

Well, remember TILA? According to the way that law was written, adding a fee for “no interest” or a program with a fixed APR changes the offer. That additional fee can be viewed as additional interest charged. And in order to charge for it, you’d have to disclose it as part of the calculated Annual Percentage Rate (APR).

At that time, the government was trying to crack down on some shady financing offered, specifically from the car sales industry.

WHAT CAN I SAY?

“We offer financing to all patients, however if you’re interested in paying in cash, we do offer a cash discount”.

When the cost of offering financing is a concern for a practice, we recommend you build the price of financing into the cost of the procedure, and then offer a cash discount.

We’ve written about this before. This is something we encourage all practices to implement because it’s a great way to cover your costs, while still remaining in compliance with the law.

We even offer a Cash Discount Calculator so you’ll know exactly how much to add into your procedure cost and how much you can reward your cash-paying patients.

You can’t ask “What does your Credit Score Look Like?”

You may think you’re helping patients by guiding them to the best financing options, but you might be breaking the law.

WHY NOT?

The Equal Credit Opportunity Act (ECOA) guarantees that all applicants have access to the same lending opportunities. At first glance, it looks like you’re helping guide them to the appropriate lender that will finance their procedure.

But here’s the problem: guiding patients to a different financial company based on what you perceive as their ability to pay, runs afoul of the law. Because the plans offered aren’t exactly the same, there might be differences in interest rates or terms. Even using something like their credit score could be seen as discrimination.

WHAT CAN I SAY?

“We encourage all of our patients to apply with ALPHAEON CREDIT. Approval is not contingent upon credit score alone; multiple variables are considered. We won’t know with any certainty until you apply. It only takes a minute or two to apply and we will receive a response instantly. Do you have time to apply right now?”

If you are offering multiple patient financing companies, we recommend leading with the company that offers the best chance of success from the beginning since patients are, understandably, reluctant to apply with another company once they have been declined once.

As Lisa Taylor, Vice President of Business Development at ALPHAEON CREDIT comments, “Offering financing to every patient is the easiest way you can help your patients. Even patients you think can easily afford to pay out of pocket, appreciate the flexibility of paying over time. By offering them ALPHAEON CREDIT, you’re offering a great option for those that need financing and those that simply want financing.” Ensuring that patients both understand and feel comfortable with their payment plan is essential to their overall feeling of satisfaction with their treatment.