With Medical Debts Rising, Doctors Are More Aggressive About Payments
By Jenny Gold
KHN Staff Writer
Apr 25, 2014 - Kaiser Health News
This story was produced in collaboration with NPR
ALEXANDRIA, La. -- Mid State Orthopaedic and Sports Medicine Center is hard
to miss. The practicefs new, 30,000-square-foot building is marked with an
enormous sign along one of the main roads in this central Louisiana city of
about 48,000 people.
In the elegant, high-ceilinged interior, the practicefs 11 doctors see about
300 patients daily to bring in $10 million in revenue each year. Itfs a highly
successful operation. But when practice administrator Spencer Michael started
here two years ago, the business was struggling with a common problem:
collecting payments from patients.
The recent economic downturn and the increasing use of high-deductible
insurance plans ghas driven patients to want to put off paying their bills,h
Michael explains. Whether itfs for a hip replacement or a broken bone, he
frequently sees patients on the hook for a $3,000 to $5,000 deductible.
gWe have to be able to be the creditor,h says Michael. gWefre essentially a
bank at that point.h
Between 2008 and 2012, multispecialty practices saw their bad debt go up 14
percent, according to a survey by the Medical
Group Management Association (MGMA), a trade organization for doctor
practices. Thatfs money that practices were owed but couldnft collect. Some of
them have begun to change their billing strategies to combat those debts, says
Ken Hertz, a principal consultant with the MGMA Health Care Consulting
Group.
gIn the past someone at the front desk would say, eWould you like to pay
today?f Because the simple answer to that is eWell, no! If I can walk
out without paying, Ifm walking out without paying!f h says Hertz. gToday, itfs
more of eMr. Smith you have an outstanding balance. How would you like to pay
for that?f h
One option for the doctors is to send patients who donft pay their bills to
collection agencies faster. Practices generally used to wait a full 180 days
before taking action. But that could mean patients who were well past the
treatments didnft feel the import of settling the debt, according to Hertz .
gThatfs six months. Ifm feeling a lot better. Six months? Beat me up, try to
collect from me,h says Hertz. He is encouraging practices to send patients to
collections after six to eight weeks instead.
Another option is to collect the payments before a procedure even happens –
an approach thatfs proved particularly effective at Mid State Orthopaedic.
On a recent morning, patient Gayle Jackson-Pryce, 63, stopped by the practice
to have her shoulder checked.
gI was on a business trip and I picked up my luggage and immediately thought,
eOoh, did I tear something?h she recalls.
Dr. Michael Leddy tells her she needs surgery on her shoulder. As she
leaves the exam room, she passes by the billing desk, where she pays her $50
copay for the office visit.
Then, as she heads out of the building, she passes a second payment desk,
where Deanna Tharp sits, one of two employees at Mid State Orthopaedic whose
sole job is to collect payments from patients, often even before they have
surgery. Tharp has an incentive to do it well; the more she collects, the bigger
her bonus will be.
Tharp starts with the practicefs electronic record system. gThis is the
rotary cuff repair code, this is the price for it, this is Dr. Leddyfs price,h
she explains to Jackson-Price.
The system can access a patientfs insurance details to find out exactly how
much shefll owe. The total for the orthopedistfs portion of Jackson-Pricefs
surgery comes to $1,917.90. Once the insurance companyfs portion is deducted,
Jackson-Price will owe the doctor a total of $831.
Jackson-Pryce says shefll be able to pay the total amount up-front, although
the practice recommended she wait a few days so they could double check her
deductible. For those who canft pay up-front, Tharp can help them set up a
payment plan.
Patients who still canft make it work are advised to seek treatment instead
at the local safety-net hospital. Hospitals usually offer some sort of charity program to help low-income patients pay
for care but thatfs not the case for most private physicians practices.
The doctors at Mid State do offer some free care when they can, says practice
administrator Michael, gbut at the end of the day, this is still a business, and
still we do have to keep the lights on.h
Soon, patients will be offered an even faster payment option. Theyfll be
handed a tablet computer in the waiting room with a credit card swiper attached,
and given the option to store their payment info for future bills. The upfront
payment model is working; bad debt at Mid State Orthopaedic has gone down by 25
percent over the past two years.
But when patients hand over that kind of cash, Michael says they expect to
get what they paid for. Like the fancy new building, which, he acknowledges,
drives up the cost of care. gBut thatfs the expectation of patients these
days. And if we canft make that happen, theyfre going to go where they can get
that,h he says.
Jackson-Price says itfs the quality of the doctors she cares about, not the
amenities.
gIfm old, donft you know that? Old people donft get concerned about
buildings. We figure wefre paying for it. Oh boy I gotta pay more ecause the
building is nice!h she says with a laugh.
After nine surgeries over the course of her life, she says shefs used to
paying a portion of her medical bills. So she always sets $1,000 aside in case
something happens. But, she says, that kind of money can cramp your style.
gI never thought I would look forward to Medicare, but I do. Yes I do,h she
adds.
jgold@kff.org
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