High-Deductible Health Plans and Your Medical Practice: Be Prepared

In a recent blog I discussed limitations on the ability of physicians to waive co-pay and deductible payments for patients experiencing financial difficulty. I recommended that practices prepare proper financial policies and document patients who experience financial hardship, even if the practice can afford to waive the fees.

Most physicians do not have the luxury of providing care without keeping a very close eye on the bottom line. After all, medical practices are businesses and many are fighting to stay afloat, needing every cent they can collect to care for patients who cannot, or will not, pay their share of healthcare costs.

The difficulty in collecting payment from patients has only been augmented by the increase in health care plans with high deductibles. Although such plans can be obtained for lower premiums, they can pose problems for people who cannot afford the associated out-of-pocket costs. According to a Kaiser Family Foundation Report, for a family earning $25,000 a year, the out-of-pocket costs of a high-deductible plan would amount to an estimated 15 percent of their annual household budget. Moreover, as the cost of health insurance continues to rise, we can all expect to see high-deductible plans, with ever-higher deductibles, becoming the norm.

The biggest problem with high-deductible plans is that patients are often not thinking about whether they will be able to afford the deductible, only whether the premiums are affordable. A procedure that costs $3,000 may need to be paid entirely by a patient who has a $5,000 deductible. When patients need to use their coverage, the costs are often more than they can afford.

It’s not a surprise that high-deductible insurance plans are having a direct impact on physician practices. I recently received an inquiry from a practice concerned about how to handle patients with large deductibles who require a surgical procedure that will be covered by insurance. The insurer informed the practice it should bill the insurance after the surgery and wait for an explanation of benefits before billing the patient. Understandably, the practice was concerned about its chance of getting paid by the patient after the services were already provided. Unfortunately, absent a formal and effective policy, a practice will be limited to chasing down a patient using whatever collection practices it may have in place.

When it comes to getting patients to pay, a proper financial policy is the best approach especially with expensive procedures. For example, some practices may require payment of all or a large portion of the patient’s deductible in advance of scheduling the procedure. A sample policy requiring pre-payment might include the following provisions:

“If you require a procedure, the practice will contact your insurance company to confirm eligibility and an estimate of your covered benefits. Prior to the procedure, you are required to pay in full for your estimated out-of-pocket expense related to the procedure. Such amount may be paid by credit card. Any remaining balance is due within thirty (30) days of our receipt of payment from your insurance company. This balance may be charged to the credit card you have provided to us and you will be required to sign an authorization allowing us to charge your credit card for this purpose. Any credit balance will be refunded to the responsible party within (30) days of our receipt of payment from your insurance company.”

Demanding payment upfront may feel odd for some physicians. But more aggressive tactics to protect your bottom line are needed (and more common) in today’s healthcare environment. This does not mean that patients with financial concerns cannot be assisted through a payment plan option (secured by credit card) or other policies that address financial hardship.

There is no single way to handle patient collections, and a practice’s ability to implement certain financial policies may be impacted by the type of patient, such as federal patients (Medicare) or workers’ compensation patients, state law, and payer contracts. However, a comprehensive financial policy is particularly helpful when it comes to high-deductible health plans. Make sure your practice modernizes its policies to match its specific concerns and patient needs. This may be the only way to stay competitive, and afloat, in the current healthcare environment.

Find out more about Ericka L. Adler and our other Practice Notes bloggers.