High Deductibles Impact Patient Collections 

Running a practice means balancing clinical and business-related tasks, including billing and collections. Many variables, including varying patient healthcare plans, must be considered during the patient billing and collections process. One concern physicians face during this process is the associated deductibles, which influence revenue management. The days of collecting $10 copays are long gone. Patients now account for a higher percentage of what your practice is owed, and this trend is set to continue. High deductible health insurance plans impact patient collections. You must adapt and implement the right systems now. Here is what to consider.

How High Deductibles Impact Patient Collections 

Compared to a traditional health plan, those with a high deductible must pay more for care before insurance companies cover their share, which is becoming problematic for practice owners. The benefit for patients is that they have a lower monthly payment — many of them are already struggling to pay their piling medical debt. It is common for practices to face challenges when billing these patients, including high collection costs and levels of bad debt. As a result, high outstanding balances negatively impact revenue cycle management. Understanding how the patient collections process is evolving will enable you to prepare more effectively. 

Shift in How Patients Pay Balances

Over the past decade, the number of patients with high-deductible health plans has shifted. More individuals and employer health plans have high deductibles — the same applies to most of the Affordable Care Act's Marketplace plan enrollees. Reports show that over 53% of Americans now have high-deductible health plans—up from 30.3% in 2013. Medical bills are no longer just insurance claims. In response, practices have changed how they collect balances, transitioning from mostly reimbursement to more patient payments. 

Data also shows that one-third of patients struggle to pay their medical bills, and many are now responsible for the payments that their physicians are trying to collect. In 2023, more than sixty million people in the United States had high-deductible insurance plans—and the GOP was pushing to get more Americans into these plans. However, nearly 60% of Americans say they wish their insurance companies provided plans with lower deductibles to better afford the healthcare they need. It is taking a toll on many practices, complicating the billing and collection processes because high deductibles directly impact collections.

Consider the Complexity of Patient Billing and Collections 

The increasing number of high-deductible health plans is creating new complexities for practice owners. Since reimbursement rates are now lower, practices, especially independent primary care practices, are facing financial barriers. For example, asking for payment up front requires sending statements, which can be costly. However, the most significant challenge lies in receiving the funds. Asking for money and receiving it are two different things. There is a knowledge gap, leaving many patients confused about what they are responsible for paying and why. 

Lack of staff training can be an issue, as patients often want answers about their bills. If practice staff can't explain the bill, patients can become frustrated, and reputations can be tarnished. Then, there are the concerns surrounding certain credit-reporting firms. In 2023, some firms removed unpaid medical bills that went to collections if they were less than $500. This process means that with fewer consequences, getting patients to pay bills is becoming tougher. 

Seasonality Can Affect Billing 

When looking at your revenue cycle, you may also notice patterns concerning seasonal variations. For example, data shows that out-of-pocket patient spending is typically consistent with a typical health plan's calendar year, and there is often a predictable pattern. Understanding these trends will help your practice develop more effective financial planning strategies. 

For example, open enrollment typically starts in October or November. Patients can apply for coverage or change their current health plan, which will become effective the following year. For those who apply and pay their first premium by December 15, coverage will begin on January 1, which is also when deductibles reset. However, this timeline can vary depending on the state and provider. 

Set Clear Expectations and Invest in Technical Solutions 

You must take several strategies in response to the increase in self-pay patients. It is up to you to set clear expectations from the get-go. When you hand new patients a letter about how you run your practice, is it short and clear enough that they will read it? Discuss payment expectations upfront and train your staff to spot potential issues. For example, some high-deductible health plans exempt certain preventive care services from the deductible. When your staff can explain what's covered to patients before they come in for their appointment, everyone remains on the same page, and there are fewer headaches when trying to collect. 

You may also want to develop a down payment policy so patients pay for treatments while still in the office. Communication is imperative, as it helps patients understand that these costs are estimates and that they will be reimbursed if their insurance company pays for more of the treatment than anticipated. Invest in more technical solutions and offer a wider range of payment options, particularly those that enable patients to settle their balance online easily. Consider options such as LumaPay and Phreesia. 

Tip: Explore TempDev's flat rate billers and revenue cycle management consulting to enhance accuracy and efficiency. 

Optimize Your Collections Strategy With TempDev

To protect your bottom line, you must implement solutions that consider higher enrollment in high-deductible plans. NextGen EPM can enhance pre-service patient collection, streamline billing processes, reduce resource commitments, and allow for better patient outcomes.

With TempDev, you'll gain the expert support you need to optimize your NextGen system, offering consulting paired with the best products for your practice, including EPM reports. TempDev is here to help you succeed. Contact us or call us at 888.TEMP.DEV to learn more.