You take the good; you take the bad. You take ’em both, and you have healthcare reform. Like most government-led initiatives, healthcare reform in general—and the Affordable Care Act (ACA) in particular—has inspired a lot of passionate debate. And that’s because, while it has expanded health coverage to millions of previously uninsured people (woo-hoo!), it also has given way to some less-than-positive consequences. One such effect: the trend toward increased patient financial responsibility (whomp, whomp).
In fact, as this CNBC story reports, the average deductible for a bronze plan from the federal healthcare exchange in 2015 was $5,181 for an individual and $10,545 for a family. Silver plans—which, according to CNBC, are “by far the most popular plans sold on those exchanges”—had average deductibles of $2,927 for individuals and $6,010 for families in 2015. And the growing popularity of high-deductible plans (HDHPs) isn’t limited to the federal exchange: as Brooke Murphy writes in this Becker’s Hospital Review article, in 2015, “more than 24 percent of individuals participating in employer-sponsored coverage chose HDHPs, up from 20 percent in 2014.” The article also notes a study showing that “44 percent of employers are expected to offer HDHP as the only benefit option for employees within the next three years.”
And while that trend is far from ideal for the patients themselves—hello, sticker shock—many folks forget about the party on the other side of the financial equation: healthcare providers. After all, when patients fail to hold up their end of the bargain—that is, pay their coinsurances and copays—healthcare providers are left to eat the cost. “Patients who receive services may be unable or unwilling to pay their high deductibles, driving bad debt and charity care at health systems nationwide as reimbursement rates drop,” Murphy explained.
Loopholes and Losses
Furthermore, thanks to ACA loopholes, “insurers are obligated to give a three-month grace period for policy premium payments,” NextGen explains in this resource. So, if a patient misses a premium payment, the insurer is legally required to keep the coverage active for three months from the date of the missed payment. The catch: the insurer is only required to pay benefits during the first month of premium delinquency. After that, while the patient is still technically “covered,” the plan is allowed to:
- Hold off on paying claims until the patient pays the premium owed.
- Deny all claims for services provided during the second and third months of delinquency (if the patient never pays the balance owed to the plan).
At that point, providers can seek payment from the patient directly, but if you have any experience with collections, you know how much of an uphill battle that can be. Perhaps the craziest part of the deal: patients who fail to pay outstanding balances with their insurers can enroll in new plans as soon as the next open enrollment period begins.
Payment Protection Plan
What does all of this mean for providers (PTs, OTs, and SLPs included)? It means it pays—literally—to be extra vigilant about streamlining and optimizing your entire billing process, from the moment a patient calls to schedule an appointment to the minute you send a claim out the door. Specifically, I recommend:
1. Completing in-depth insurance verification checks for each patient.
This means doing more than merely confirming that your practice accepts a patient’s insurance. You also should determine whether the patient’s plan places any out-of-pocket financial responsibility directly on the patient—and if so, how much. That way, you can inform the patient of the exact amount he or she will owe upfront. You also may be able to estimate the degree to which the patient’s plan will cover the services billed—though this certainly will require you to dig deeper into the details of the plan. However, as Erica McDermott explains in this blog post, “While cost estimation does require some legwork, the benefits—which include improving upfront collection, boosting patient satisfaction, and minimizing days in accounts receivable—are worth it.”
2. Submitting claims in a timely manner.
I’m not just talking about complying with each insurance carrier’s timely filing requirements. If a patient loses coverage—for not paying the premium, for example—you’ll want to know as soon as possible so you can adjust the amount you collect from the patient at the time of service (see item three below). That means getting claims out the door fast, because letting ’em pile up could lead to mass denials several months down the road. And while we’re on the subject of denials: if you’re denied payment, make sure you promptly investigate the cause to determine whether the patient did, in fact, lose coverage.
3. Collecting patient payments upfront.
As McDermott writes in the previously cited post, “only 21% of patient balances that aren’t collected at the point-of-service are ever collected.” I don’t know about you, but I don’t like those odds. To stack the deck in your financial favor, you’ve got to collect patient payments at the time of service. If your practice is struggling to make that happen, check out this blog post to learn tried-and-true strategies for optimizing your collections process.
Like most pieces of reform legislation, the ACA was the product of a lot of give-and-take. And unfortunately, that means some of its effects have been less positive than others. But, challenges are a fact of life, and as good ol’ Mrs. Garrett would say, there’s no need to feel helpless in the face of adversity: “Take some action; help yourself.”
Have you experienced any significant changes in your clinic in the years since ACA adoption? If so, how did you adjust? Share your thoughts in the comment section below.