co-pays

Trend: Hospitals requiring upfront cash payments before treatment

Wed, 30 Apr 2008 06:59:56 -0400

Of late, a growing number of hospitals have been insisting on cash payments before they offer high-ticket services to non-emergency patients if they're not sure they'll get paid. While such practices may not generate the best PR, it's a matter of survival, hospitals say. Even though the current slate of health reform schemes insure all citizens, it seems unlikely to address the problem of collecting payments for costly procedures. For example, Massachusetts plans include many high-deductible options, which still leaves hospitals deep in the red if patients don't pay their share.

Hospitals are being sapped by care for growing numbers of uninsured patients, and say that unless they get tough on patients with some means, some of them simply won't survive. For example, both HCA and LifePoint hospitals saw profits drop substantially during the first quarter of this year, largely due to jumps in bad debt expense--including lower collections on patient accounts. Uncompensated care has been flattening hospitals nationwide, with the burden climbing 44 percent in 2006, to $31.2 billion, from $21.6 billion in 2000. Such debt is helping to push hospital margins well below the the 3 to 5 percent considered appropriate, and sometimes destroys them entirely.

That being said, collecting cash aggressively can rebound when not-for-profits are involved. For example, this week the Wall Street Journal brought some unflattering attention to the M.D. Anderson Cancer Center, which in late 2006 asked a leukemia patient for $105,000 up front because it wasn't satisfied with her insurance coverage. And with federal legislators like Sen. Chuck Grassley questioning not-for-profit hospitals' right to their tax exemptions, coming across as too money-driven has its perils.

To learn more about this trend:
- read this Kaiser Daily Health Policy Report item

Related Articles:
HMA adopts tougher collections strategy
In 2007, bad debt rising for hospitals
Bad debt savages HCA, LifePoint profits
HCA sees debt rising until patients get insured

'Facilities fees' for doctor visits startle patients

Wed, 19 Mar 2008 07:59:55 -0400

Healthcare billing is complex enough without throwing another factor into the mix. Increasingly, however, it seems that consumers are being caught off guard by a new bill--a "facility fee" for visiting doctors based in a hospital-owned building--which these days, they're usually expected to pay on their own. The issue isn't new, but it's hotter now that many patients struggle with high deductibles imposed by consumer-directed health plans.

As readers of FierceHealthFinance probably know already, patients who come into a hospital are billed not only for professional service, but also a facilities fee for use of the building. However, increasingly, hospitals are also imposing such fees for doctor visits in their buildings, something that insurance often refuses to cover. The fees vary enormously, from a relatively trivial $20 or $30 to a few hundred dollars.

While doctors' offices that charge such fees, such as Milwaukee's Froedtert & Community Health, usually post signs warning patients that a facility fee will be assessed, consumers aren't sure what the signs mean, and often end up arguing with insurance companies over the unexpected bill. Making the sting worse, some insurance companies treat the facilities fee at the doctor's office as the first dollar of what can be a high hospital deductible, rather than applying it to a physician deductible.

One Wisconsin legislator, Rep. Charles Benedict (D), has introduced a bill that would require physician offices to disclose facility fees in advance. The bill passed the state Assembly this month, and now Benedict hopes to find a co-sponsor in the state Senate. And at least two facilities--Seattle's University of Washington Medical Center and Virginia Mason Medical Center--settled suits in 2006 contending that patients should have been warned about much-higher charges by affiliated clinics.

To learn more about this issue:
- read this Milwaukee Journal Sentinel piece

Related Article:
Clinic "facility fees" spark legal battles. Report

NC system gets flack for collecting charges upfront

Wed, 12 Mar 2008 07:59:57 -0400

The UNC Health Care System has had a charitable mission since its founding in 1947. Owned by the state of North Carolina, it gets about 5 percent of its operating budget from the state, support that is supposed to help it care for the poor. That's why the hospital received a significant amount of flack when two years ago, it announced that it would collect patients' portion of their fees prior to providing care. So great was the outcry that critics mounted a petition drive to stop the move--and execs agreed to postpone their efforts.

Less than two years later, however, UNC has implemented the pre-care collection policy, under which it collects any moneys the patient will be responsible for paying. If patients aren't well-off financially, they may qualify for Medicaid or free or discounted care. Those who don't can also set up a no-interest payment plan, hospital leaders said. In their defense, execs have noted that if they don't collect on site, their odds of collecting drop 60 percent--and that collectively, even co-pays can contribute a lot of much-needed cash. In truth, their policy isn't that unusual, but in a day where patient co-pays and deductibles are skyrocketing, it's likely that patients will face some very significant bills. This kind of policy is becoming quite common, both in public and private facilities, but it's not hard to see why critics fear that it will drive some patients away.

To learn more about this issue:
- read this News & Observer article