Popularity of Medicare Advantage Plans fuels influx of new companies into the marketplace with anticipated enrollment of more than 22.6 million beneficiaries, or more than one-third of Medicare-eligible consumers

Provide care or pursue payment. Until recently those two common healthcare activities were mutually exclusive. But not anymore. Thanks to high-deductible health plans (HDHPs), healthcare providers today—including clinical laboratories and anatomic pathology groups—increasingly must collect full payments rather than deductibles, and directly from patients rather than from insurance companies.

This trend is forcing doctors to become bill collectors and they’re not happy about it. Splitting focus between caring for patients and pursuing payments is causing stress and frustration for those in the medical community.

Collecting Full Payments from the Insured

Physicians and hospitals have long had processes for collecting payments from the uninsured. However, providers must now be prepared to pursue payment from insured patients as well. This includes clinical laboratories and pathology groups.

Dark Daily has covered this critical topic in e-briefings and free white papers, including, “Hospitals, Pathology Groups, Clinical Labs Struggling to Collect Payments from Patients with High-Deductible Health Plans,” Sep 6, 2017, and “Growth in High Deductible Health Plans Cause Savvy Clinical Labs and Pathology Groups to Collect Full Payment at Time of Service,” Jul 28, 2014.

An article in Bloomberg titled, “Doctors Are Fed Up with Being Turned into Debt Collectors,” notes that even large lab test companies like Quest have been impacted by the trend.

“Even large medical companies with national operations are facing the problem,” Bloomberg notes. “Quest Diagnostics Inc., the lab-testing giant, said 20% of services billed to patients in the third quarter of this year went unpaid, costing the company about $80 million in lost revenue.”

Helping Patients Pay

“It’s harder to collect from the patient than it is from the insurance,” Amy Derick, MD, a dermatologist who owns Derick Dermatology in the Chicago area, told Bloomberg. “If the plans change to a higher deductible, it’s harder to get the patients to pay.”

To assist her patients, Derick has implemented a procedure that enables them to review cost estimates from their insurance providers in advance. She finds, though, that collection rates are still slow, especially at the beginning of the year when health plans renew and deductibles are at their highest.  

Gerald “Ray” Callas, MD, an anesthesiologist in Beaumont, TX, is President of the Texas Society of Anesthesiologists. He has introduced payment options for patients that allow them to pay a portion of their bills upfront or make monthly payments until the bill is paid in full. Nevertheless, he finds that patients still avoid his calls and collection attempts. “If they have to decide if they’re going to pay their rent or the rest of our bill, they’re definitely paying their rent,” he told Bloomberg. “We try to work with the patient, but on the other hand, we can’t do it for free because we still maintain a small business.” (Photo copyright: Texas Medical Association.)

Tarek Fakhouri, MD, a Texas surgeon specializing in skin cancer, said about 10% of his patients request payment plans, delay necessary surgeries until they’ve met their deductibles, or choose alternative treatments. He had to hire an additional staff member to work with patients and their insurers for reimbursement of services.

“It’s an unnecessary added cost to the healthcare system to have to hire staff just to sit there on hold with insurance companies to find out what a patient’s deductible status

is,” he told Bloomberg.

Clinical Laboratories Also Struggle to Get Paid

It’s not only independent physicians who are dealing with the consequences of high-deductible health plans. Medical laboratory companies have been impacted as well.

A 2017 Kaiser Health Tracking Poll found that 43% of insured adults said they have difficulty affording their deductibles, and 29% reported having problems paying their medical bills.

Even more alarming was the number of people who said they delayed or skipped medical care altogether due to financial concerns. The KFF poll reported that 27% of surveyed adults admitted they had postponed getting healthcare due to costs, while 23% said they skipped a recommended medical test or treatment altogether. Additionally, 21% said they did not fill a prescription due to the expense. This would apply to blood draws and other medical laboratory visits as well.

“We certainly have a high bad-debt rate for the uninsured,” Mark Guinan, Chief Financial Officer at Quest, told Bloomberg. “But really the biggest driver is people with insurance. It’s their coinsurance and their high deductibles, and they don’t always pay their bills.”

The rising costs of healthcare and health insurance in the US continues to be a burden for everyone involved. When people allocate money for their monthly expenses, it is clear that many are postponing making payments for medical services.

As more Americans opt for high-deductible health plans, healthcare professionals, as well as clinical laboratories and anatomic pathology groups, will need new strategies for receiving payment for their services. 

—JP Schlingman

Related Information:

Doctors Are Fed Up with Being Turned into Debt Collectors

Why Physicians Are Struggling to Get Paid

Kaiser Study Finds Employee Health Insurance Deductibles Rise 4.5 Percent

Data Note: Americans’ Challenges with Health Care Costs

Hospitals, Pathology Groups, Clinical Labs Struggling to Collect Payments from Patients with High-Deductible Health Plans

Growth in High Deductible Health Plans Cause Savvy Clinical Labs and Pathology Groups to Collect Full Payment at Time of Service