As more people switch to health insurance policies with high deductibles in an effort to reduce their premiums, some hospitals around the country are asking patients undergoing elective procedures to pay more at the time of service rather than waiting to collect what they are owed.
The reason, apparently, is that more patients are unable to pay the high deductibles, leaving their health-care providers stuck with bad debt.
In Fort Wayne, though, the trend has not taken hold, local health care officials said.
At Lutheran Hospital, patients planning elective procedures have always had to pay a fee up front, but they are not required to pay a portion of the cost at the time it is done, said Geoff Thomas, head of public relations for the hospital.
Thomas said that insurance plans have changed, making patients responsible for higher deductibles and co-pays.
The hospital has dealt with that trend by having patients meet with financial counselors so they know as soon as possible in advance what the care will cost them. The process, he said, has been in place for several years.
Parkview Health is also seeing more patients with high-deductible plans, said Danette Fitzgerald, vice president of marketing for the health group. As a result patients are seeking more information about costs before scheduling elective procedures so they are prepared for out-of-pocket expenses.
Parkview offers what Fitzgerald called charge estimates that include the cost of the procedure and how much of that will be the patient’s responsibility, Fitzgerald said.
Fitzgerald said patients are being more selective and prioritizing medical care based on their financial health rather than physical health.
While some health care providers have responded to changes by collecting at the point of service, “We are not actively doing point-of-service collections for elective procedures,” Fitzgerald said. She said Parkview Health offers payment options that include charity care and payment plans with and without interest.
At Fort Wayne Orthopedics, that practice works with patients to plan for procedures, and that hasn’t changed, said CEO Shelly Miller. They check with insurance companies and make sure everyone is well informed, she said.
“We do try to collect something up front” when a procedure is in the planning stage, but they never demand any payment at the time of the procedure.
“We try to make it easy. We work to make sure there aren’t any bad surprises later. We’re very accommodating and sensitive” to the patients, she said.
While insurance policies with high deductibles are becoming more common, “We aren’t experiencing that.” She noted that less than 1 percent of FWO’s patients have insurance purchased on health care exchanges, where large deductibles can be common.
In different parts of the country, practices are much different.
According to an article in the Atlanta Journal-Constitution, hospitals and physicians in that region say they are under greater financial pressure and can’t collect a token co-payment upfront, perform the procedure, then sit back and wait for insurers to run the numbers and for patients to pay them.
Insurance is covering less, and if patients don’t pick up the rest, providers are stuck holding the debt, the article said.
“Even people with six-figure salaries can have trouble paying a $5,000 deductible,” said Dr. Douglas Lundy, the co-president for Georgia-based Resurgens Orthopaedics. “People are choosing not to do tests or surgery. The high deductibles are hurting things.”
The growth in high-deductible plans and increasing bad debt are closely related, said Michael Mascolo, north region employee benefits practice leader for Wells Fargo Insurance. Providers used to have very few people in these plans, but that has changed.
The number of workers with high-deductible plans that included a health savings account option jumped to 20 percent of all covered workers last year, from 5 percent in 2007, according to the Kaiser Family Foundation.
Kaiser said 1 in 3 Americans has had problems paying medical bills in the last year, is paying old bills over time, or has bills that can’t be paid at all.
As a result, Mascolo said, there is “an explosion of bad debt.”
“We’re being flooded with patients with little or no ability to pay their portion of the bill,” Greg Hurst, chief operating officer for Piedmont Healthcare, said. Approximately 50 percent of its patients are on a high-deductible plan with some form of co-insurance, he said.
As a result, “For elective procedures, we’re going to have to be disciplined about collecting the patient’s financial obligation at time of service,” Hurst said.
At Piedmont, bad debt and charity care combined increased from $207 million in fiscal year 2011 to $324 million in fiscal year 2013. It’s expected to rise to $414 million this year. Bad debt makes up about 75 percent of the increase.
Jamie Court, president of Consumer Watchdog, a California organization, said that in that state some doctors are asking for patients’ credit cards before providing services. “That’s been true for a while for elective procedures. A lot more cash and credit is being exchanged,” sometimes in ways that might even violate terms of insurance policies, he said.
“All sorts of stuff is going on. Providers want to get paid, and they don’t trust the insurance companies and they don’t trust the insured,” Court said.
Doctors are also getting stung because people will sign up for insurance and get an insurance card, then receive care, but they won’t pay their premiums and the policy will then be canceled, leaving health providers with no payments at all.
“Now they’re treating insured patients like they used to treat uninsured patients,” Court said.
The Associated Press contributed to this story.