Over the past decade, out-of-pocket healthcare expenses have more than doubled for the average American. Many people are choosing high-deductible health plans in order to save on monthly premiums, but this change puts a higher burden on their wallets when it comes time to go to the doctor or fill a prescription. Doctors have been slow to change their internal billing practices in the past, but now they find themselves swimming in a sea of their own unpaid bills. Many providers are switching to point-of-service collections to curtail their losses, asking patients to pay for services before leaving the office. While the movement may not make everyone happy, it may be the only way to keep doctors in business.
What are Point-of-Service Collections?
There are many interpretations when it comes to point-of-service (POS) collections. Doctors and hospitals may refer to their POS collections as time-of-service, upfront, or front-end collections. In general, a provider who participates in POS collections will ask for payment of a proposed service sometime before the service is rendered, up to the time the patient is discharged or leaves the office.
POS collections ask everyone to pay, from patients who pay solely out-of-pocket to those who are insured and need to pay either a deductible, copay, or coinsurance amount. POS collections can also include prior balances or payment plan payments. Most hospitals and medical providers who conduct POS collections accept cash, checks, and credit card payments.
With insurance premiums and deductibles continually rising, more and more Americans are having trouble paying their medical bills. According to the Academy of Healthcare Revenue, providers have a 70% chance of receiving payment at the time of service if they request it – but only a 30% chance of collecting it after a patient leaves the building. Since so many people are unable to pay their balances, many providers have started to question if they can even stay in business.
The reimbursement rates that doctors receive from insurance companies are also constantly changing. When you combine this reimbursement uncertainty with patient non-payment, many providers are left struggling to pay their office bills. Office space, utilities, technology, medical equipment, and staff are all necessary for patient care – but these items all cost money.
By moving to the POS collection model, providers are finding that they can spend less time billing patients and more time treating them. Many doctors and hospitals are even adopting payment plans as a way to help patients cover costs, similar to other industries that deliver higher-dollar products and services. While some patients may dislike the trend, it is allowing doctors to stay in business.
How Does My Health Insurance Work?
The traditional model of copays is quickly going out of style. Most patients now deal with health insurance that features either a high deductible or coinsurance – or a combination of both. Deductibles and coinsurance do not negate monthly premiums, though; they are paid on top of them.
- Deductibles – A deductible is the amount of money a patient must pay out-of-pocket before their insurance pays anything. These out-of-pocket expenses include prescriptions, sick visits, hospital stays, and medical procedures. For example: If you have a $8,000 deductible, that means that you must pay $8,000 in medical expenses before your health insurance will begin sharing your costs.
- Coinsurance – Often after a patient meets their deductible, their insurance company still only pays for a portion of their bills. Coinsurance plans split the patient and insurer responsibility based on a percentage. Typically, patients will have to pay for 10-20% of a service out-of-pocket (or more) while the insurance company pays the remaining percentage.
The Comprehensive Primary Care Policy
At CPC, we ask our patients with policies featuring annual deductibles to pay $100 on the day of their office visit. This $100 goes toward paying down the patient’s out-of-pocket costs associated with the visit and also contributes to paying down the patient’s deductible as a whole. Once a patient can show us that they have met their deductible for the year, we no longer collect the $100. Annual physicals are also not subject to this fee as long as patients follow the guidelines set forth by their insurance plans.
We have decided to implement the $100 POS collection fee for several reasons:
- Patient Budgeting: The POS collection helps patients budget their medical spending based on services needed, and it also spreads payments out when they are still coming entirely out-of-pocket. Instead of receiving a bill for services all at once, a patient can pay $100 upfront and then the remainder when it is billed.
- Office Budgeting: Knowing that we can count on a steady revenue flow helps us operate our office more smoothly and efficiently. Although we still work closely with patients and their insurance policies, the POS collection ensures at least a partial payment for services even when the insurance company is not yet liable.
- Insurance Company Compliance: The agreements patients enter into with their insurance companies are legally binding contracts. By collecting a patient’s financial obligation, we are merely doing our part to enforce the previously agreed-upon contractual terms.
We understand that rising medical costs can make health care seem unaffordable for some people. CPC is committed to helping our patients ease this burden in whatever way we can. With our $100 POS collection, we can save money on billing services – keeping the prices for our services down for our patients. We want everyone to receive the highest-quality care available, and we will help you with insurance claims whenever we can. If you have any questions regarding your personal insurance coverage, feel free to contact us at any time. Let CPC help with your health in well-being in 2017; set up an appointment today!