Outlook for 2017: Rise of high-deductible plans has providers boosting collection efforts

Hospitals and health systems face the prospect of growing uncompensated care costs following the looming repeal of the Affordable Care Act and its Medicaid expansion. So providers will have to focus on improving collections and helping patients cope with increasingly high out-of-pocket payments under high-deductible health plans. One approach is requiring patients to pay upfront for non-emergency procedures.

Some hospitals may follow the lead of St. Louis-based Ascension. The Catholic-sponsored system waives deductibles or unpaid bills for patients with incomes below 250% of the federal poverty level at its 141 hospitals and other facilities in 24 states.

Hospitals are struggling to collect that increased patient share, said Brian Sanderson, managing principal of Crowe Horwath's healthcare services group. A recent study by Crowe Revenue Cycle Analytics, based on data from 660 hospitals, found that overall managed-care net revenue over the past year declined 2.5% for outpatient care and 1.4% for inpatient care. The cause was lower collection rates for the “patient responsibility” share of the bills.

“It's imperative that healthcare organizations establish effective point-of-service collection programs by training and educating front-line staff,” Sanderson said.

The problem will only get tougher because more employers and insurers are moving to high-deductible plans, according to a recent survey by the Kaiser Family Foundation/Health Research & Educational Trust. In 2016, for the first time, more than half of all workers (51%) with single coverage faced a deductible of at least $1,000, the study found. Hospitals are relying on their collections staff and revenue-cycle vendors to communicate clearly with patients before services are delivered about what they will owe out-of-pocket. They're also offering them a range of payment options, including pre-procedure payment.

Gwinnett Medical Center in Lawrenceville, Ga., has financial advisers who call all non-emergency hospital patients slated for high-cost surgical procedures and advanced imaging tests at least a day before the scheduled services. They discuss which costs will be covered by insurance and which will have to be paid out of pocket.

The advisers use predictive, revenue-cycle software from RelayHealth. The software evaluates credit scores to determine how much particular patients are able and willing to pay. They also try to get patients to pay deductibles via credit card over the phone. Or else they collect the bills at bedside after the procedure.

The key to surviving this era of high-deductible plans is to evaluate non-emergency patients before their treatment and communicate clearly with them about their prospective out-of-pocket costs.

Ascension began waiving out-of-pocket costs for lower-income patients because that's consistent with its religious and not-for-profit mission, said Ascension CEO Anthony Tersigni. Plus, putting these patients through a collections wringer typically produces little revenue. “We believe that everyone deserves quality, personalized healthcare, and our new charity-care policy relieves some of the cost pressures associated with getting the care needed by individuals and their families,” he said.