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Tips for Dealing with Increasing Patient Out-Of-Pocket Payments

November 11, 2013

Like most health care providers, your practice or health organization has probably seen a significant increase in patients with high-deductible health plans (HDHPs), leaving the patient with increasingly large out-of-pocket expenses for treatment – even after insurance has paid its share. (A high deductible plan is defined as private health insurance with deductibles of at least $1,100 for individual coverage, or $2,200 for a family plan.)

Insurance companies have been steadily shifting more and more responsibility for financial accountability to the patient, primarily in the forms of higher deductibles and co-pays, according to data from the Kaiser Family Foundation. With more than 17percent of Americans under age 65 currently enrolled in health insurance plans that require higher deductibles than in the past, more patients are faced with spiraling medical costs, even when all deductibles and co-pays have been met.

The Foundation also notes that health insurance plans offered through the exchanges are expected to also carry high out-of-pocket payments. The lower premiums only tell part of the story; many newly-covered patients may opt for treatment only to find they are faced with unexpected ‘back-end’ payments.

With all of these increases, it comes as no surprise that delinquencies and defaults of medical bills are on the rise, along with their impact on the fiscal health of care providers’ practices. Smart practices are becoming pro-active in heading off problems before they occur by using some of the following tactics.

  • Verification of insurance coverage – including all carriers besides the primary insurance – is critical, especially for higher-end treatment centers or practices, according to Donna Smith, a surgery center administrator from Alabama. It is your office’s job to ask and verify by following up either over the phone or in writing.
  • Your front office should prepare patients for additional costs above and beyond what insurance may pay by educating patients about what their coverage will and will not pay for a procedure or other treatment. When patients know what is expected of them and why, they are more likely to follow through with payment.
  • Asking for payment up front, even before the procedure, reduces the chances of default that frequently occurs from back-end collections. Once the deductible and other out-of-pocket charges have been calculated, ask the patient to take care of those at the time of services. Any overpayments after the insurance has paid their actual amount can be refunded.
  • If necessary, offer a payment plan breaking large co-pays or deductibles and other expenses into more manageable monthly payments. Ms. Smith adds that while the center always asks for up-front payments, they willingly work out payment plans with patients experiencing financial hardship. From their experience, medical bill payment is much harder to collect once the patient has left the center, if not collected at the time of service.

Many practices keep patient credit card information on file for immediate payment of co-pays, deductibles and related charges.

  • Finally, practices and other health organizations need to take a closer look at how they approach the billing process. In the past, software and other billing technology was designed to be used for transactions between the provider and public or private insurance companies, and not patients or their families. By taking a retail approach to payment transactions, health care providers directly involve the patient in the billing process from the beginning of services instead of after the fact.

M-Scribe Technologies, LLC, a leader in billing, coding and medical documentation services, can help your practice with any questions or concerns about billing and payment. Contact our experienced consultants today for more information.

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