Are appropriate Patient Collections being affected by High Deductibles?



It has been observed, that since 2008 and after the Affordable Care Act (ACA) has come into being, there has been a major doubling of patients with high deductibles plans. People often have picked a high deductible plan because it has a lower premium and out of pocket expenses are lower and can fit into their budget. Unknowingly, patients, thus end up paying more out of pocket expenses on their healthcare. Moreover, employers too prefer high deductible plans for their employees as this saves money on the healthcare coverage. Further, the ACA has been one of the major factors that has pushed up the number of people taking on healthcare high deductibles plans. The impact of this is not really favorable to either parties – the patients or the hospitals/physicians attending to them.

For the patient, once they realize that the healthcare insurance plan is not giving them total coverage, they are reluctant to seek further preventive care. And the negative impact on the medical practice, high deductible takes it’s toll on the medical Revenue Cycle Management (RCM).

Patients with High deductibles affect patient collections in various ways:

  • High Administrative costs: High deductibles and/copays are stated to be one of the major challenges that the medical billing services face. Since patients think that having a high deductible insurance scheme gives them total coverage, often they end up not being able to make the payment, and hence it is left to the billing services to chase the patients and leads to more paper work than necessary. A recent research study found that uncollected deductibles ruin practices and that nearly 81 percent of self-pay net revenues go unrecovered, leading to twice the expense of administrative costs for collecting from a patient when compared to that from a payer.
  • Physician’s dilemma: Physicians often find themselves in a dilemma, especially with people with high deductibles, in cases where medical treatment is critical. If the healthcare plan does not cover the appropriate treatment required, the appropriate patient collection upfront could be a tricky job for the physician as the inability of the patient to pay for treatment could lead to bad debt on the patient’s side. Moreover, physicians have to maintain that fine balance between maintaining that personal relationship with their patients and collecting their dues seamlessly without effort.
  • Increase in Out-of-pocket-Payments: The healthcare providers are all too aware of the unique complications inherent in the medical billing service with respect to high deductible plans – lack of knowledge about what to bill at various points in the revenue cycle management process is the core dilemma. It has been noted that, based on study of America’s Health Insurance Plans (AHIP), the growth in High Deductible Health Plans is a major contributor to current expectations and it has been observed  that the out-of-pocket payments for insured patients is expected to grow to $420 billion by 2015 from the $250 billion that it used to be in 2009. This could lead to bad debt on either sides, patients as well as the medical practice.
  • Increase in Accounts Receivable: In the recent past, nearly 50 percent of patient revenue would be uncollected and may not have been so detrimental to the practice. But today, failing to collect an upfront fee from patients can lead to a loss of 15 percent or more of revenue, weighing down A/R and increasing costs to collect thus affecting the Revenue Cycle Management (RCM).

If healthcare practitioners enable certain payment schemes among the high deductible patients, then the process of patient collection services becomes manageable and thereby streamlines the RCM process without any loss to either party. Some of the options like:

  • Communicate payment policies upfront- During scheduling appointments, communication material for walk-ins, better front desk interactions that help explain it all.
  • Providing different schemes for payment- This could involve interacting with the types of insurance schemes your patients have and help them understand what is covered and what type of insurance could benefit them; having credit card payments accepted at front desk; and even providing them a low credit risk installment payment option.

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