If you’re at a hospital or healthcare clinic for a non-emergency procedure or test, you may want to keep your wallet handy. According to a new report from NPR, about three-quarters of healthcare and hospital systems are implementing a point-of-service collection model that asks patients for payment at the time services are provided—and some medical facilities will wait to perform important tests and procedures until they’ve received that payment.
Why Point-Of-Service Collections?
It can be inconvenient for patients to make payments—and for healthcare providers to ask for those payments—before undergoing a much-needed procedure like a hysterectomy or appendectomy. However, many hospitals and clinics are moving to the point-of-service collection model to combat bad debt.
Healthcare providers take on bad debt when patients fail to meet their financial obligations. For patients with high deductible plans, the risk of defaulting on medical bill payments can be high. The Advisory Board Company analyzed 400,000 patient claims and found that as deductibles go up, a patient’s likelihood of paying their medical bill goes down, regardless of the patient’s income level.
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| Average deductibles are rising for employer-based single coverage, among others. Source: whitehouse.gov |
The popularity of high-deductible insurance plans has increased with the introduction of the healthcare exchange, and as a result, healthcare providers have been interfacing with patients (rather than just government and commercial payers) more to collect money owed. From 2011 to 2014, consumer payments to healthcare providers increased by almost 200 percent.
What an Upfront Payment System Means for Patients
While a point-of-service collection model may help hospitals and doctors reduce bad debt, this approach can be financially challenging for patients who have a high deductible and can’t afford to pay a large lump sum for their treatment. And when patients are faced with the prospect of paying hundreds to thousands of dollars at once, many (up to 43 percent of insured patients) will delay or skip the medical treatment they need.
In addition to being a financial burden, point-of-service collection can put patients in a vulnerable position. Some may feel coerced into paying a large sum up front if they’re already at the hospital and are being prepared for a procedure when a hospital staff member talks to them about the cost of the treatment. Patients may also have a harder time contesting medical bills if a charge has already gone through on their credit card.
It’s worth noting that under the Emergency Medical Treatment and Labor Act, healthcare providers must stabilize and treat a patient before demanding payment if that patient is experiencing a health emergency. However, it’s left up to the provider to determine how they want to collect payment from their patients if they’re treating a non-emergency.
