ASCs have noticed a rise in patients presenting with insurance, but these plans often feature high deductibles and copays, leaving much of the procedure costs to the patients to pay. This has led to some challenges in collecting payment.
Two ASCs have developed strategies for keeping bad debt low, despite the increases in self-pay patients. One surgery center is located in an urban, blue collar, low-income area, and the other treats more affluent clientele. Each offers a case study in how to keep bad debt low despite challenges.
• Boston Out-Patient Surgical Suites: “We don’t have tremendously high deductibles yet, but these will increase this year,” says Greg DeConciliis, PAC, CASC, administrator at Boston Out-Patient Surgical Suites in Waltham, MA.
“We don’t collect a deductible up front because we only collect copays,” he says. “It’s a logistical nightmare, so our policy has been not to collect deductibles and to bill patients, but you end up with some bad debt.”
Although ASCs could see increased bad debt as a result of higher deductible health plans, the flip side is that they also can see more business — particularly if they’re a lower-cost surgery option than other centers in their area.
“As deductibles have gone up — and some out of state are $5,000 and $10,000 — it’s caused patients to be smarter shoppers,” DeConciliis says. “We’ve had patients call us to ask what’s the cost if they have their surgery done here versus the hospital.”
The surgery center also gained one surgeon who came to Boston Out-Patient to be able to offer his out-of-state and high-deductible patients a lower cost alternative.
“I tell other administrators to keep their eyes open because this could be an opportunity for them to work with a surgeon who is in tune with costs,” DeConciliis says.
At Boston Out-Patient, the clientele are affluent, so bad debt traditionally is low, he notes. “We collect our deductibles after the procedure pretty efficiently.”
For post-procedure payments, the surgery center has an electronic payment system with an online option for setting up a payment plan. Also, the preregistration software has a new portal in which patients can verify online their health insurance benefits, including what they owe upfront for the copay.
Since patients can pay for their surgeries online, they can use their credit card and gain points toward cash back from the credit card company or frequent flier miles.
“Our best options are to communicate with patients prior to the surgery that we won’t charge them upfront, but will charge them afterward, and then to have a payment plan that they can set up and pay online,” DeConciliis says.
The surgery center’s charges are based on Medicare rates, but there is a unique contractual relationship with each insurance carrier, he says.
“For example, after a claim is processed, even if we charge $10,000, if the insurance carrier only pays us $2,000, we will hold the patient to just the $2,000 or the allowed amount,” DeConciliis explains. “We wouldn’t balance bill them the charge amount.”
Sometimes the surgery center offers self-pay options to patients with high deductible plans, he adds.
“In general, we only see this regarding out-of-network situations,” DeConciliis adds.
- Ambulatory Center for Endoscopy: This ASC is in an urban, low-income area in which patients often present with insurance but don’t entirely understand how their plans work, says Sarah Malaniak, administrator for Ambulatory Center for Endoscopy of North Bergen, NJ.
“Fortunately, with the Affordable Care Act, when you have a screening colonoscopy, it’s covered 100%, so the deductible does not apply,” Malaniak says. “But a lot of patients are not having a screening colonoscopy, so that puts them in diagnostic or surveillance [categories], and a lot of times it’s not covered.”
Those patients end up paying for the entire negotiated contract rate of the bill if their insurance deductible is high.
High deductibles are a big issue for the surgery center.
“In 1998, when I started in medicine, if a patient came in with a $500 deductible plan, that was a lot of money, and now some people have $10,000 deductibles,” she says. “The way insurance companies are moving these days, the plans are more catastrophic where they can package them at a lesser rate because the deductibles are so high.”
This means patients bear the brunt of costs for ordinary surgeries and medical needs, she adds. This trend led to greater amounts of bad debt.
“When I first came here, we didn’t collect payments up front,” Malaniak says. “But our bad debt had risen so much, we had to do something.”
So the ASC came up with a new strategy that works well for self-pay patients. It combines preprocedure education with a convenient way for patients to pay.
“We do a lot of patient education up front,” Malaniak says. “Sometimes, I have to step in personally and speak with patients, trying my best to make them understand that I understand where they’re coming from and we’ll work with them as far as the payment goes.”
The education prepares patients for the second part to the new payment strategy, which involves using a kiosk portal in the surgery center. When patients arrive for their surgery, they can register on the portal and pay for their surgery in advance.
Advance education that includes the patient’s specific insurance coverage and payment expectations is crucial to make the system work. It sometimes results in patients canceling their scheduled surgery appointment, but that’s better than the patient showing up on the day of surgery, registering in the kiosk, and canceling because of the cost.
“We have an insurance specialist here who calls patients before they come in to review their benefits,” Malaniak says.
“We try to collect a certain dollar amount on the day of service, and that’s entered into the kiosk, where it prompts the person to make a payment with a credit card,” Malaniak explains.
For example, if a patient will owe $1,500 for the procedure after all insurance has been charged, then the ASC asks the patient to pay $750 in advance and set up a payment plan for the rest, she says.
“For some reason, and I haven’t figured out why this has happened, the patients will come in and register on the kiosk and then pay their entire balance,” Malaniak says. “Ever since we implemented the kiosk, we’ve seen our time-of-service payments increase, and it has reduced our bad debt.”
The bad debt decreased by 35% in the two years since the kiosk opened, and no one has objected to the kiosk. “I thought we’d get a lot of pushback from the older population, and we really haven’t,” she says. “People are used to kiosks. At the airport, there’s a kiosk. At the deli, there’s a kiosk.”
Although the strategy works for now, there always is a danger that a poor economy or a worse health insurance market, post-ACA, could make it too difficult for people to pay out of pocket for their surgeries, Malaniak says.
“People tend to put their health on the back burner when it comes to paying out of pocket,” she notes.
Two ASC administrators offer case studies in how to reduce bad debt in the era of high insurance deductibles and high patient self-pay.
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