Patients Pay Before Seeing Doctor as Deductibles Spread
By Stephanie Armour - Oct
14, 2013 - Bloomberg
When Barbara Retkowski went to a Cape Coral, Florida, health clinic in August to treat a blood
condition, she figured the center would bill her insurance company. Instead, it
demanded payment upfront.
Earlier in the year, another clinic insisted she pay her entire remaining
insurance deductible for the year -- more than $1,000 -- before the doctor would
even see her.
gI was surprised and frustrated,h Retkowski, a 59-year-old retiree, said in
an interview. gI had to pull money out of my savings.h
The practice of upfront payment for non-emergency care has been spreading in
the U.S. as deductibles rise. Now, the advent of the Patient Protection and
Affordable Care Act is likely to accelerate that trend.
Many of the plans offered through the lawfs insurance exchanges have low
initial premiums to attract customers, while carrying significant deductibles
and other out-of-pocket cost sharing. The second-lowest tier of Obamacare plans
in California, for example, carries a $2,000 annual
deductible.
Hospitals say they need to charge patients prior to treatment because
Americans are increasingly on the hook for more of their own medical costs. And
once care is provided, itfs often difficult for hospitals to collect.
gIt used to be taboo to look like you were looking for money at a time when
you were supposed to be focused on patient care,h David Williams, president of
Boston-based consulting firm Health Business Group, said. gItfs not taboo
anymore.h
High Deductibles
Employers are following suit as they push workers to share more financial
responsibility for health care. The percentage of insured workers with a
deductible of $1,000 or more for single coverage jumped to 34 percent in 2012
from 12 percent in 2007, according to a study by the Kaiser Family Foundation and the
Health Research and Educational Trust.
Overall, the number of people with high deductible plans rose to 15.5 million
in 2013 from 1 million in 2005, according to Americafs Health Insurance Plans,
the industryfs lobbying group in Washington. The Internal Revenue Service largely defines
high deductible health plans as those with an annual deductible of $1,250 or
more for individual coverage.
gWe expect the trend toward high deductibles to continue,h said Ceci
Connolly, managing director of PriceWaterhouseCoopersf Health Research Institute
in Washington. gTherefs nothing in the law that curbs high deductibles and we
very much expect more and more employers to move to high-deductible plans.h
Fast Money
Doctors and hospitals at New York University Langone Medical Center
collect co-insurance and deductibles upfront for inpatient and outpatient
services, said Andrew Rubin, vice president for medical center clinical affairs
and affiliates. The amount may be based on estimated cost of services. The
practice helps clarify bills for patients and saves on administrative costs when
it comes to collections, he said.
gWe get our money faster,h Rubin said in an interview. gAs patients pay
higher deductibles, wefre talking about potentially thousands of dollars. People
get excited to buy a TV, but health care is a service they donft like to pay
for.h
Lee Memorial Health System in Fort Myers, Florida, collects co-payments and
deductibles prior to elective services, Mary Briggs, a spokeswoman, said in an
e-mail. If a doctor decides a procedure is urgent, theyfll work out payment
plans, she said.
Bad Debt
And unless itfs an emergency situation, Presbyterian Healthcare Services, a nonprofit
hospital system based in Albuquerque, New Mexico, requires patients with insurance
to pay their deductible, copay and co-insurance at the time of service, and the
uninsured pay in full. The hospital has financial assistance available and says
on its website that it can reschedule appointments if patients arenft able to
pay.
gWefre seeing a shift to patients with more high deductible plans, and itfs
causing an increase in bad debt expense,h Dale Maxwell, senior vice president
and chief financial officer, said by telephone. gThe revenue pressures we are
facing here are significant.h
Hospitals provided $41 billion in care for which no payment was received in
2011, up from $3.9 billion in 1980, according to a January report by the American Hospital Association. About 25
percent of uncompensated care stems from insured patients, Caroline Steinberg,
vice president of trends analysis at the association, said in an interview.
Patient Risk
Consumer advocacy groups say the upfront payments limit access to medical
care.
gIt puts the employee or patient at risk of not getting the service because
the deductible may be a barrier to care,h said Mark Rukavina, executive director
of the Access Project, a Boston-based nonprofit that focuses on health-care
access.
Hospitals counter that discussing payment upfront helps connect patients
earlier to financial assistance programs while ensuring providers get paid.
gIt helps because you get it at the time of service rather than trying to get
it afterwards,h Rich Sheehan, a spokesman for Boulder Community Hospital in Colorado, said by telephone. gDoctorsf offices have been
doing it for years.h
To contact the reporter on this story: Stephanie Armour in Washington at sarmour@bloomberg.net
To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net