The Dangers of the Deductibles in the New Insurance Plans

Jun 17, 2014 at 11:11 am by steve

Matt Coleman

With the introduction of new health insurance plans stemming from the Affordable Care Act, deductibles and copays may be leaping beyond most patients’ ability to pay. “Some of our clients have seen deductibles of $5,000 or more,” says Jim Stroud, CPA, with Warren Averett Kimbrough & Marino. “Practices that have struggled in the past to collect $50 copays are going to suffer significantly.”

“Physicians are not going to perform ‘free’ elective surgeries anymore. We’ll need to get that money upfront,” says Matt Coleman, administrator for Alabama Orthopaedic Surgeons in Birmingham.

One Birmingham clinic that had not been verifying deductibles prior to surgeries racked up $29,000 in unpaid patient-owed debt from just 12 procedures last fall.

“It’s imperative that practices know what the patient’s responsibility is on their plan before the patient even enters the door,” says Mary Elliott, CPA, with Warren Averett Kimbrough & Marino. “Having insurance no longer means an insurer will be paying any significant part of the bill."

To offset this risk, Alabama Orthopaedic Surgeons tells patients, who call to schedule procedures, that their insurance and deductibles will be verified. “Then when they get here, we let them know how much is due before the procedure,” Coleman says. “The week before, we re-verify their deductible, and we let them know again what they need to pay upfront.”

About one in 15 Alabama Orthopaedic Surgeons patients say they cannot afford the amount requested. “We tell them we have to reschedule then, because it’s an elective surgery,” Coleman says. Getting payment for non-elective surgeries on patients with large deductibles presents a conundrum. “We haven’t come up with an idea for those.”

Some practices now hire financial counselors. “They talk patients through the financial responsibilities, so there is a clear understanding of what their insurance is covering and what the patient will pay. All before any treatment or procedures,” Elliott says.

Practices without a financial counselor on staff need to invest in their front office people. “They’re the only people who can secure this money for you,” Stroud says. But they need training on handling and expressing the correct phrasing, responses, postures and situations to be effective.

“Start referring to copays and deductibles from the first encounter,” Elliot says. “Use the confirmation call as a second time to touch on that copay and mention the large deductible. Also at that time, remind them if they have past due payments from previous encounters.”

Coleman has had success with high-deductible patients financing procedures using CareCredit, a medical credit card. The patient can get financing for $200 to $25,000 with the first 18 months often interest-free. “We run the credit card and CareCredit pays us in two days, minus their fee, which is about three percent,” Coleman says. “So if it’s a $5,000 fee, we give CareCredit $150 to take on the liability. That probably wouldn’t cover the cost for us in man hours and sending out statements.”

In the last two months, 15 patients at Alabama Orthopaedic Surgeons have chosen this payment option.

“It’s a good option for some. It works well for dentistry,” Elliot says. “The problem is that if a patient misses a payment, then the interest due can be retroactive at a very high interest rate.”

Though that is not the physician’s fault, the fallout can still hit the practice. “There have been some cases where the medical provider has looked bad by virtue of introducing a financial vehicle like that,” Stroud says, noting that consumer advocates have been known to bring action against these medical payment options.

The main tool every practice needs to invest in for handling these large deductibles is technology. “Information is the key,” Stroud says. “Make technology your friend. Buy a practice management system that gives you access to various payers’ databases, so you know the status of your patients’ plans.”

Practices that have not yet seen a change in their receivables should not be lulled into a false sense of safety. Many patients on the new plans have likely not been to a doctor yet. “And for those still on their employers’ plans, they may not make a change to the higher deductible versions until their anniversary date sometime this year,” Stroud says. That means it could be well into 2015 before the true effects from rising deductibles and copays will be visible on practices’ books.

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