In one of the bigger ironies of the Affordable Care Act era, when millions of people have gained access to insurance, many providers are reporting an increase in bad debt. The reason: More individuals and families are finding themselves in high-deductible plans as employers shift their benefit packages, and individuals and families buy plans on the federal or state-run exchanges, where the most popular options involve significant copays and deductibles.
Even people who have been insured for years are realizing just how little they understood about how healthcare services are paid for when their out-of-pocket responsibility soars. Facing a daunting bill for her care, Shroyer borrowed $4,000 under the program and now pays $167 a month, often using the firm’s online payment feature. “I’m 60-something years old, and if I can do it, anyone can do it,” she said.
Vendors such as CarePayment and competitor ClearBalance say their products make it easier and less confusing for patients to pay their bills. They also claim to increase customer satisfaction while helping hospitals collect the greatest amount possible. Both report rapidly growing client rosters.
The firms say their programs adhere to the Healthcare Financial Management Association’s Patient Friendly Billing guidelines, which were issued in October 2013. The guidelines advise hospitals to include family members or other advocates in the billing conversation. They suggest patients should receive contact information for financial assistance programs in their discharge paperwork.
But being “patient friendly” also is about avoiding land mines as state and federal regulators step up their scrutiny of collection practices by hospitals and their vendors. In Minnesota, Attorney General Lori Swanson imposed a $2.5 million fine on revenue-cycle management firmAccretive Health, and temporarily blocked the company from doing business in the state, as part of a 2012 settlement to resolve allegations of patient privacy violations and overly aggressive collection tactics. In New York, Attorney General Eric Schneiderman negotiated a March settlement with the country’s three major credit- reporting agencies that requires a 180-day waiting period before medical debt can appear on a credit report.
HHS in 2013 extended direct criminal and civil liability for violating patient privacy laws to vendors and contractors who handle patient data. Even the Internal Revenue Service is getting involved. The Affordable Care Act sets additional requirements for tax-exempt providers, which must publicize their financial assistance policies and refrain from any “extraordinary collection practices” until they have determined whether patients are eligible for financial assistance.
To avoid such scrutiny and to improve word-of-mouth about their patients’ experience, providers are taking cues from retailers on how to get people to pay their balances. They’re investing in tools to make the process less confusing and easier to navigate. And they’re using sophisticated algorithms to predict who is most likely to pay and who is not, so they can focus their efforts where they make the most sense.