Many patients find themselves with high deductible insurance plans leaving them on the hook for a larger percentage of the cost for their care.
These costs often create financial hardships for patients. Nearly 25 percent of Americans had trouble paying a recent medical bill, according to a 2016 survey by the Kaiser Family Foundation and the New York Times.
It doesn’t take a large medical bill to push a patient into debt, as the average unpaid medical debt recorded on credit reports is $579, according to a 2014 report from the Consumer Financial Protection Bureau. The same report found that 54 percent of patients with medical debt have no other debts listed on their credit reports.
This can create difficult problems for physicians, who try to ensure their patients are receiving the care they need while also trying to fund their practices.
Sterling Ransone, MD, a family physician in Sterling, Virginia, says that these high-deductible insurance plans are saving people money in the short-term, but are leading to unexpected consequences.
“We are seeing a lot of people not coming in, and we’re seeing people delay care because their deductibles are so high, they feel like they can’t afford to come,” he says. “I’ve had a couple of folks where basically their families drag them down here because they were looking ill, and they really didn’t want to come in because they were worried about their copay.”
Waiting to receive care can lead to greater health issues which can increase the cost for patients further, Ransone says.
According to the Kaiser and New York Times survey, 32 percent of adults between the ages of 18 and 64 have postponed getting needed care due to the cost and 40 percent said they have relied on home remedies and over-the-counter drugs.
Before the patient gets in the office
Windel Stracener, MD, runs a family practice in Richmond, Indiana, at the Wayne County Community Health Center. He said a large barrier to care in his practice is just tracking what is covered for each patient in the ever-changing insurance marketplace.
“So, we have to change what we do from day to day, just based on whether people have the same coverage they had when you saw them four days ago,” he says.
There are staff members at the center who focus on tracking these changes and ensuring that the physicians don’t make financially devastating healthcare decisions for their patients, according to Stracener.
This strategy can avoid some medical bills that can lead to debt.
Andrew Hajde, a healthcare industry adviser and assistant director of association content for the Medical Group Management Association, recommends using technology before the patient arrives for their appointment to see what they will have to pay.
“Engage with that patient, either with your front office staff or with some sort of a financial counselor in the office, so they understand that they’re going to be paying a portion of their bills and what that means to them,” he says.
Communication is key
Hajde says that making patients aware of their payment obligations is an important component in receiving compensation for care before a practice has to send it to a collections agency.
“I think some practices get themselves in trouble because they don’t do that up front, customer service and communication,” he says. “And they let patients continue to be seen indefinitely without paying and then they rack up large balances. It’s more about prevention instead of trying to fix it after the fact.”
He says customer service can give a patient a feeling that the practice cares about them.
“I think it’s critical that throughout the process all the way from when the patient walks through the door the first time, through when their claim’s paid, that whoever is in charge of the billing department for that practice is in constant communication with the patient to about their balances and continuing that relationship with a positive interaction with that patient,” Hajde says.
Patients are hungry to know what their care will cost them so they can make informed decisions about care providers, according to a September 2019 survey from United Health Group.
Ransone says that when a patient comes in, he discusses the cost of various services with them. “I’ll say, ‘Well, this is what I think you need,’ and I’ll tell them what the cost is at the point of care,” he says. “And we try to update that fairly frequently. So, we try to be pretty upfront about that.”
Hajde says this transparency is very important in practices that offer more expensive services.
“So that’s where really having that transparency and upfront kind of conversation about fees and patient balances is critical,” Hajde says. “Nobody likes any surprises as it relates to out of network or anything else. So, they want to have confidence as to what they’re going to be responsible for.”
Stracener says patients with high-deductible insurance policies tend to be the ones asking in advance how much a healthcare procedure will cost, and his practice will work with those who can find their care in another location for less. His practice will help the patient shop around for better prices on care, and will help make arrangements for that care with another physician if necessary.
Another option available to patients is the “Hospital Compare” section of the Medicare.gov website which offers patients a comparison of hospitals in their area. It also includes information about how prices compare with national averages.
Another useful strategy is to set up a payment plan with the patient that would allow them to pay their balance over time rather than all at once.
Hajde recommends setting up a plan within the practice if possible, but a practice should be willing to work with a third-party company if the cost is high.
“If we’re just talking about a smaller balance, … offering a payment plan through the practice where they pay on that to the practice over a period of six to 12 months, I would say is a lot more appealing to patients versus them trying to get approval for credit and other things,” he says.
To set up a payment plan, Hajde recommends:
Third party companies should be used for procedures that likely won’t be covered by insurance, like cosmetic surgery, according to Hajde.
“So, let’s say somebody is going to pursue having bariatric surgery or something like that, it’s going to be several thousand dollars or more for them to pay,” he says. “I think that’s an example where something like credit company that works with healthcare would be super beneficial for patients because they can pay on something like that over time.”
Even with these plans in place, though, there’s still the chance the practice won’t get paid, Stracener says. “And there are times where you just have to look at things and realize that your patient can’t pay, and you have to let it go,” he says. “What we try to do is work things out and make decisions based so that everybody feels good about what happened.”
When to send bills to collections and what to expect if you do
Before sending a medical bill to collections, it’s best to exhaust all other options. But sometimes that just isn’t going to happen and a collections agency may be the spark which can get a patient paying again, Stracener says.
He says his practice sends the patient three or four statements and will make an equal number of phone calls, and if they are not answered and payment doesn’t resume the bill is then sent to collections.
Stracener says this is often enough to get the patient paying again.
Sending a bill to collections, though, is not a panacea. Hajde says that when a bill is sent to collections the amount that can be recovered has already been reduced.
“By that point, the practice has already lost a lot of money if they didn’t engage the patient early and make sure that they work with them on paying their bills up front or as early as possible,” he says.
He says that the cost of sending a bill to a collections agency is already cutting into the amount that can be collected, while Crowe LLP, a public accounting and technology accounting firm, found in 2017 that the average collections on hospital inpatient accounts is 10.9 percent, while outpatient accounts average 18.2 percent.
Sending a bill to collections, or filing a civil lawsuit can also backfire on the practice by leading to negative publicity. For example, the University of Virginia came under fire in September 2019 for suing 36,000 patients over a six-year period in an effort to collect on more than $106 million in unpaid bills.
Ransone said this has tarnished the hospital’s image. “It’s really tough because it’s horrible optics there,” he says. “So, they’ve got a lot of issues that they’re going to have to work through to try to figure out how to go about doing it.”
Stracener says his philosophy is that by the time a bill must be sent to collections he assumes he’s not going to receive any of it. “So, anything that we get is a bonus,” he says.
“When you are a physician you sometimes feel, when it comes to money, you’re in a no-win position,” Stracener continues. “And I think that you try very hard to balance that with the financial needs of the practice with the social needs of the community and the medical needs of the community, and just try to do what’s right for the right reason.”