Originally published February 1, 2017
A recent visit to my primary care physician’s office for an annual physical left me feeling angry, cheated and, worst of all, broke. After expecting a $20 copay, I was shocked to hear the administrator in the front office tell me I owed a whopping $275. Through a smile, she explained that I hadn’t yet met my deductible and that she’d “seen worse.”
I felt slighted in some way. Why didn’t someone tell me this before I booked the appointment? Why wasn’t my insurance paying for this? Do I really have to pay my doctor that amount?
The Saga of Surprise Medical Bills
Although $275 may not seem like a lot of money to some individuals, it was a shock to me and something for which I wasn’t prepared. Like me, many patients are often confused about what they owe their healthcare providers. More than half of Americans admit to feeling “completely lost when it comes to understanding health insurance. Uncertainty about cost can even cause individuals to delay or avoid medical care.
Surprise medical bills are a major reason medical practices need to increase patient engagement and communication and set clear expectations of a patient’s financial responsibility before an appointment is even scheduled. It’s vital for every party involve – the insurance companies, the medical practice and especially the patient - to understand what is owed.
Learn more about ImagineSoftware’s patient responsibility estimation tool during our webinar, “Surprise Your Patients, by Eliminating Surprise Billing with Estimation.”
Another big problem in healthcare is surprise billing, which occurs when individuals unknowingly get care (emergency and non-emergency) from providers that are outside of their health plan's network. The average surprise charge for an emergency department visit is approximately $600, but some patients get hit with bills larger than $100,000 from out-of-network providers they didn’t select. Ambulances are the biggest source of unexpected medical bills (51 percent), followed by emergency department visits (19 percent) and elective inpatient procedures (9 percent).
Multiple states had previously adopted comprehensive legislation to mitigate surprise billing, but no state was in place on the federal level until President Trump passed and signed into law December 27, 2020 the No Surprises Act. This bipartisan and bicameral legislation is scheduled to take effect in 2022. For payers, the legislation includes $2.5 million grants available to states to create or improve their all-payer claims databases (APCDs).
If I Don’t Understand, Do I Still Have to Pay It?
Who wants to pay a bill when they aren’t sure they “really” owe what is listed on that bill? According to the Medical Billing Advocates of America, up to 80 percent of medical bills contain errors.
A friend of mine who recently had a baby shared that she received multiple bills from various doctors. Months later, the bills are still being altered, corrected and worked out by her insurance company and the hospital where she had her baby. Meanwhile, her account with this hospital was sent to collections. She now has a healthy baby but an unhealthy financial situation.
I Have to Pay for My Dinner, But Not My Doctor?
One of the most recent versions of the FICO® credit-scoring model, FICO® Score 9, gives medical debt less weight when it comes to calculating credit scores. Also, unpaid medical bills sent to collections agencies will have less impact on FICO Score 9 credit scores than nonmedical debt.
These changes mean patients have even less of an incentive to pay their healthcare providers. Working for a medical billing company, I know how much patient debt some practices are writing off. Physicians are almost becoming banks who provide financing for patients trying to pay their medical bills. Sometimes it takes patients years to completely pay their medical bills, while others either can’t or won’t. The accounts of those patients who fail to pay are written off by their physician practice, resulting in a lack of repercussions for lack of payment.
Give Me Options for Paying My Medical Bills
I want to pay my medical bill, but I’d rather do it online, like I do for most of my other bills. I detest getting mail, and most of it ends up in either the trash or shredder. Just like choosing an affordable phone plan or setting up fixed utility payment, I should be able to set up regularly-scheduled automatic payments to pay what I owe my healthcare provider.
Providers should understand that many patients prefer multiple payment options. A recent survey found that patients want their provider to modernize payments through online patient portals (37 percent), mobile apps (32 percent), contactless mobile wallets (24 percent), pay by text (20 percent) and pay by scanning QR code (17 percent). The survey also found that providers with contactless payment options are viewed more favorably by 58 percent of consumers.
The Struggle is Real, and How Patient Payment Plans Can Help
Even with insurance, many patients are struggling to pay their medical bills. Almost 80 million Americans struggle to pay their medical bills or are paying off medical debt. From January 2020 to March 2021, an additional 2.5 million Americans fell into medical debt, adding over $2 billion to the total medical debt.
With increases in high-deductible health insurance plans and the rising cost of prescription drugs, which average 2.56 times those seen in 32 other nations, it’s no wonder some Americans are going into bankruptcy. Two-thirds of individuals who file for bankruptcy cite medical issues as a key contributor to their financial downfall.
Physician practices that don’t currently offer payment plan options for their patients should consider doing so. Providers should equip their staff with payment tools that create convenience and cover all parts of the billing cycle, from pre-visit to collection.
According to the previously-mentioned survey, many patients are eager for payment options that help them manage medical expenses, with 59 percent likely requiring recurring bill payments. By promoting payment plans, providers enable patients to pay off medical debt a little at a time instead of all at once. For physician practices, it’s another step in streamlining their collection process while obtaining more patient payments.
At ImagineSoftware, we launched HonorCare®, a flexible, interest-free option for patient payment plans. It enables physician practices to offer medical payment plans with no provider enrollment fees or interest and an online customer portal. Integrated with our ImagineBilling™ solution, it lets users perform automatic electronic file transfers, reconciliation, adjustment of remaining balances and auto posting.
An Insider’s Perspective
As a patient and someone who works closely with providers and medical practices, this $275 surprise medical bill experience prompted a wakeup call for me to recommend that providers start offering patients more payment plan options, continue increasing patient engagement and providing patients with the most accurate explanation of what they owe.
Let’s be clear - I’m not saying it's acceptable not to pay your healthcare provider. My goal with this blog is to provide a unique insider’s perspective from both a patient who has experienced frustrations and confusion surrounding medical bills and a professional whose daily job is helping providers and medical practices improve their patient collections.
Learn more about ImagineSoftware’s Patient Solutions and how we combine proprietary billing data and information around consumer preferences with propensity-to-pay scoring to create a unique billing experience for each patient.