This year, many patients are facing substantially higher deductibles, forcing surgery practices to collect more payments pre-operatively in order to keep accounts receivable from ballooning.
According to the Kaiser Family Foundation, deductibles for employer-sponsored insurance plans in 2013 averaged only $1,135, whereas deductibles for the first 3 million health insurance plans purchased through Healthcare.gov averaged between $3,000 and $5,000. These increases represent a daunting jump in patient payment responsibility. And bad debt rates leap to an astonishing 36 percent once patients leave a physician’s office.
"Discussing costs pre-operatively and collecting moneys upfront is essential to profitability,” according to James Weintrub, MD, retired surgeon and founder of CoverageCalculator.com, an online tool that calculates a patient's out-of-pocket cost for a medical service.
But talking about cost up front needn't be thought of as a necessary evil. In fact, most patients welcome the discussion, which helps them avoid surprises and make better decisions. Here are four steps to conducting a cost conversation that's mutually beneficial to doctors and patients alike.
1. Start the education process at check-in.
If your practice uses paper forms, note the policy of collecting co-payments, deductibles and co-insurance pre-operatively in bold print on the form. In addition, post a similar sign on the registration desk.
2. Be prepared to discuss cost. Even if you're a physician.
Many physicians are not comfortable discussing the cost of care. Medical schools do not have classes about prices or health insurance. Once in practice, physicians focus on patient outcomes, often ordering referrals, tests and medications without knowing how much patients will end up paying for them out-of-pocket.
Physicians need to recognize that for many patients, price is as important as quality of care. Physicians should be prepared to discuss alternatives that are likely to be cheaper, and to acknowledge when a test or procedure can be reasonably postponed until patients have met their deductibles or are in better financial shape.
3. Take advantage of online tools to calculate patient payments.
"The vast majority of patients are willing and able to pay their bill in the office prior to treatment, if you explain it to them," said Karen Zupko, president of KarenZupko& Associates (KZA). Zupko recommends the use of a one-page "surgical cost quotation" for specialist physicians. This is a simple way to help patients understand their financial responsibility.
In a recent KZA newsletter to surgical practices nationwide, Zupko also described a website available to physician practices to calculate patient costs and facilitate payment. The site — CoverageCalculator.com — is a free, simple way for patients and practice staff to compute out-of-pocket cost for any combination of fees, allowables, co-pays, deductibles, out-of-pocket maximums and co-insurance.
As explained on the Coverage Calculator site, the online form requires minimal data entry. Physician offices obtain coverage information from the health plan via electronic transactions 270 and 271. Alternatively, patients can obtain coverage information from Health Plan documents, subscriber portals and mobile applications. The calculator "does the math," giving patients an accurate determination of out-of-pocket cost.
4. Enable patients to pay with credit cards.
Many practices have credit card readers enabling patients to pay their bills on the spot. Credit card readers can be obtained from banks and require a phone line. A new electronic payment device, Square, can be attached to an iPhone or iPad. Square charges merchants (practices) 2.75 percent on every transaction. This comes on top of the fees, usually 1.9 to 2.5 percent, charged by Visa, MasterCard and other card companies. Although the fees are annoying, these costs must be weighed against the benefits of immediate payment and substantially reduced bad debt.
Zupko noted that CareCredit, www.carecredit.com, a General Electric company, offers a healthcare credit card that enables patients to finance large deductibles and coinsurances. For a small fee, CareCredit assumes the credit risk and handles the collections from the patient.
Andy Robin M.D, is Chief Creative Officer of Coverage Calculator, Inc., and the author of the monthly "Moneyatrics" column in the Providence Journal.
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