The secret is out; high deductible plans are everywhere and are proliferating the market. High deductible plans are not new and they have been around for over a decade. However, as the cost of health care continues to rise at a rapid rate and more employers are looking to help offset the cost of providing health care to employees by turning to less expensive health plans with high deductibles. In today’s market it is not uncommon to see deductible plans as high as $3,000 or even $5,000, with some family plans going even higher.
Before we start to dive into how to deal with high deductible plans, let’s take a step back. What is a deductible and where did they come from? A deductible is defined as the minimum amount that a patient must pay out of pocket before insurance begins to pay at the contracted health plan rate. Deductibles have their historical roots in managed care as the theorist in the insurance industry came up with the idea to charge an amount large enough to provide a disincentive to a patient seeking unnecessary health services. Said another way, a patient would think twice about seeking health care services if they thought the service would result in a large out-of-pocket expense.
So what is a practice to do? In the good ol’ days, practices could just tell a patient “we will bill you.” Then, as managed care plans came in the picture, patients paying copay at the time of service became the new normal. These copays typically ranged from $10 - $30; an amount that patients found tolerable. In today’s health care world, most patients will owe an amount significantly greater than the copay because of the high deductible. This is especially true at the start of every calendar year when the deductible amounts reset. Some practices still find it difficult to ask the patient for money at the time of service. However, there are a number of options out there, but some are likely to yield better results than others.
1. No-Pay or Slow-Pay
The first option is going back to the old school approach of billing a patient later for services provided today or only collecting the visit copay. This approach has the least amount of pressure applied to the patient. However, it will leave the entire deductible and co-insurance amount to be billed on statements and mailed to the patient. A bill the patient may or may not pay. Essentially, with this approach you have missed the best time to collect patient balances; which is right when the patient is standing in front of you.
2. Payment Estimation
Some practices are reviewing eligibility results received from the insurance carriers and trying to determine where the patient stands in meeting their deductible. If there is still an amount to be met, the practice is trying to collect a standard set amount or perhaps quickly estimate an approximate amount that the patient may owe. For example, if a patient still has a large amount of their deductible to be met, a practice may try to collect the $25 copay and an additional amount of $75. While the $100 may not be the entire amount the patient owes, having the bulk of the amount owed already taken care of can, in theory, improve the chances that the patient pays the remaining balance. This approach could simply be put as the “you may not get all of it, but at least you got some of it” approach.
Another option that some practices are exploring is alternative and creative ways to collect patient balances through modern technology. In addition to the basic mailed patient statement, one option is to send the patient a text message with a balance reminder and include a link to a payment site in the text. With an estimate today of nearly 3.5 billion smartphone users in the world (45.12% of the population), one of the largest outlets to reach patients on is through their phones. With these technological trends increasing drastically every year, expect to see more innovative solutions like this in the future.
Another technological approach that has made its way to the scene in recent years is “card-on-file” programs. These programs differ from a normal credit card payment plan, since the card is not actually charged until the bill is adjudicated with the insurance carrier. Essentially, as the patient checks out from a medical visit they are asked to put a “card on file” for those expenses not covered by insurance (deductibles and co-insurance amounts). The claim is then sent to the insurance carrier as usual but when the response is received from the carrier, the billing system then triggers a charge up the authorized amount on the card previous placed on file. This approach is a little bit of the best of both worlds; the patient does not have to pay anything beyond the copay at the time of service, but the practice then has an authorization to charge a credit card at a later time.
5. Pre-Exit Adjudication
Pre-exit adjudication is the “gold standard” that the industry is trying to achieve. We seemingly have been hearing about this technology for years, however not many successful examples of this technology are out there in the medical industry today. The theory is that the medical industry is moving toward electronic communication in health care, and thus improvements in electronic processing of claims are sure to come. With pre-exit adjudications, when a patient is seen by a provider, the provider will input the detail of the visit in an Electronic Health Record. The provider will also electronically select the appropriate coding for the visit which is then electronically sent to the billing platform. The billing platform immediately alerts the insurance carrier to find out where the patient stands on their deductible and exactly how the insurance would process the codes submitted. From this information, the checkout desk would know how much the patient would owe before patient can make the short walk out of the exam room.
While this may all sound good in theory, there are still obstacles today. The first is that most providers are still not selecting the codes in the EMR at the time of the visit. Providers may get busy and choose to close out and code and visit at a later time. A second obstacle is that many insurance carriers are not prepared to provide an immediate response to submitted codes. While pre-exit adjudication is not working well in medicine today, expect continued federal legislation to continue to push the industry to achieve this kind of solution at some point in the near future.
So which of the option laid out above is best for your practice? The short answer is that it depends. It is important to evaluate the capabilities of your practice in two areas. Does your practice have strong personnel at the checkout desk that are capable of asking for payment at the time of service? (Remember it is not what you say, it is how you say it). Does your practice have the technological solutions needed to accomplish the chosen option? (Many of the options above requite electronic interfaces between various medical, insurance and payment systems).
Overall, it is important to understand that high deductible plans are here to stay, and your practice must adapt to it.