More Hospitals Start Upfront Medical Billing Practices
- One of the biggest changes in medical billing over the last decade has been rising deductibles. As trends shift and new laws get passed, more patients find themselves footing the bill upfront when visiting the doctor or hospital. Not only is this something that individuals need to be aware of, but medical facilities need to do their part to inform their patients of this change.
According to industry data, the overall number of citizens with high deductible plans – annual deductible of $1,250 or more for individual coverage, $2,500 for a family – increased from 1 million in 2005 to 16.5 million in 2013.
This trend is not going to slowdown. Ceci Connolly, the managing director of PriceWaterhouseCoopers’ Health Research Institute in Washington, told Bloomberg the current laws do not curb high deductibles and more employers are going to start adopting it.
Because of this, healthcare providers and insurance companies need to start adjusting how they operate. For patients that are not able to handle a large upfront sum, hospitals need to provide alternative options like financial assistance programs like low-interest loans or a payment plan. Another option is to help patient’s signup for Medicaid or individual coverage on the Obamacare exchanges.
Andy Scianimanico, the vice president for revenue cycle at Northwestern Memorial HealthCare, the parent company of Chicago’s largest hospital, told CNNMoney that the goal is to minimize the after-service bill shock and get patients financial assistance or into a program for more affordable care right at the start.
He added that this is something that has been in the works for some time. Northwestern has offered upfront financial counseling with patients since 2011 and it is now available in four departments, including surgery and imaging. The goal is for the entire four-hospital network to offer financial services in the next two years.
“It’s a dramatic change in collection practices,” Scianimanico told the Chicago Tribune in November 2013. “The biggest challenge for us is to move conversations (with prospective patients) as far up in the process as possible. It’s not about strong-arming patients to pay. It’s about getting information into the hands of patients so they can make better-informed decisions.”
From the hospitals standpoint, this approach is more profitable. The American Hospital Association reported that in 2012, hospitals provided $46 billion in uncompensated care and $41.1 billion in uncompensated care in 2011. That is around 6 percent of their total expenses for those given years. Furthermore, hospitals have traditionally had trouble collecting directly from patients, recouping between 10 and 20 percent of their portion within 120 days of sending the first bill.
“It’s such a big deal because it makes (hospital) financial planning and revenue projections difficult,” Kip Piper, a former state Medicaid official and White House budget officer who advises large health care organizations on health policy, finance and business strategy, told the Chicago Tribune. “Hospitals are definitely worried more about collecting in an environment where the consumer is at greater financial risk.”
