Will Insurance Marketplaces Create A Patient Payment Nightmare For Hospitals?

The full implementation of the Affordable Care Act (ACA) isn’t until next year, but hospitals are already anticipating low patient payments. Why? Because more Americans are enrolling in high deductible health plans offered on the federal and state insurance marketplaces. Traditionally, it’s been difficult for hospitals to receive collections from patients with lofty deductibles.

“The number of accounts that we’re seeing that relate to these high-deductible plans has been building, and it has been putting pressure on our bad debt levels,” Daniel Cancelmi, financial chief of a health care system, recently told stock analysts, according to Kaiser Health News. “We’ve seen it building over the past several years, and it’s continued into 2013 as well.”

Because consumers with these plans might not be able to pay off all of their health care bills on time, having a large number of patients with higher out-of-pocket costs tends to lead to difficulties with revenue cycle management technology for hospitals. Bloomberg reported some exchange-offered plans have personal costs that can be as high as $6,000 a person – and consumers are signing up for them.

While high deductive plans create even more patient billing challenges for health systems, a patient friendly experience might be the solution. Hospitals are always looking for ways to streamline costs and collect more of what they’re owed, and patients with high deducible plans don’t have to be a compensation obstacle. This is the age of consumer driven health care, and if hospitals can break down billing barriers that might be holding those with large out-of-pocket costs from paying their bills, providers might be able to improve patient collections and stay financially successful in this new era.

What do ACA exchanges mean for hospitals?
According to Becker’s Hospital Review, the marketplaces will change the collections game for the medical community. The implications of the exchanges are that hospitals will experience a wave of new patients with health insurance at the start of the new year, essentially creating a completely new patient base.

Millions of Americans have already signed up for plans on the exchanges – and the government estimates the rate of enrollment is only going to increase. The Department of Health and Human Services’ “Health Insurance Marketplace: November Enrollment Report” found 106,185 Americans were officially signed up for exchange-offered health plans at the end of its first month, but there were 846,184 completed applications, which corresponds to 1,509,883 people. According to Becker’s, experts estimate roughly 16 million Americans will end up receiving health insurance on the exchanges in 2014.

The exchanges may end up challenging hospitals even more from a patient billing standpoint. With more patients comes a higher likelihood of missed payments. Becker’s suggested hospitals reach out to their local community to determine how many patients may enter the health system with marketplace plans, and, perhaps most importantly, ensure these plans are part of the hospital’s long-term plan.

The main issue with the exchanges isn’t just how many more patients hospitals can expect, but the costs patients will be personally responsible for. Bloomberg reported consumers are switching to policies with out-of-pocket costs reaching up to $6,000 per person. According to Bloomberg, deductibles will be 26 percent higher in seven states than they were before the plans were offered.

Some physicians are even expressing their concerns over accepting the high deductible plans and how they will be compensated. According to Kaiser Health News, physicians across the country are saying they will need to see more patients to make up for the decrease in payments, even though they are already strapped for time and resources. This is such a pressing concern that some physicians are saying they won’t participate in exchange-offered plans because they don’t expect to receive adequate medical payments

Break down payment barriers
While these plans might seem like they put a kink in the patient billing chain, they might be just what the doctor ordered for the medical community. Patients – no matter what plans they have – want bill clarity and payment convenience, to be able to see upfront what they are going to owe and to pay their bills quickly through an easy-to-use system. When patients with high deductibles can see right away what their care is going to cost them out of pocket, they might be able to budget better.

Patient-friendly billing is the intuitive solution hospitals need to manage the influx of patients with high-deductible plans. The health care software mitigates the rise in collection costs and bad debt. Patients who are presented with electronic bills in an easy-to-read, clear format might be better prepared to provide payments in a timely manner. Consumer friendly billing can make the collections process more comfortable for patients because it provides all of the information patients need upfront, empowering patients and hospitals alike.