Up-Front Deductible Payments on the Rise

Need to see the doctor? Be prepared to pay at the door.

Up-front deductible payments

The Affordable Care Act has prompted a shift toward low-premium, higher-deductible health plans, both employer-provided and available on the exchange. In order to collect as much of the out-of-payment cost as possible, many health providers have responded by requiring up-front payment from patients before receiving nonemergency treatment. Insured patients at these facilities must pay their co-pay, co-insurance, and deductible up front, and uninsured patients are responsible for the full (estimated) cost of treatment.

Administrators at facilities currently using this practice argue that it is the most effective way to receive payment, particularly when so much of the burden is shifting to the patient. A great deal of costs for medical treatment become bad debt – in 2011 alone, hospitals provided $41 billion in care that was never paid for. Hospitals attribute this to patients’ reluctance to make their health spending a priority, and to a lack of awareness of financial assistance programs that can eliminate the strain of a single large payment.

The up-front model is an extension of one already in practice in most doctors’ offices around the country, where co-pays and co-insurance are collected at the check-in for an appointment. By implementing the practice in hospitals, administrators state that they can connect patients to financial assistance sooner and increase the likelihood of full payment.

Opponents of the idea, however, point out that up-front payments may create a barrier to receiving health care. As deductibles continue to rise, patients will be increasingly unable to cover the cost of their care and may elect not to seek treatment – in effect, creating a situation directly opposite the intended outcome of the Affordable Care Act.

PRN Funding offers healthcare factoring and medical receivables factoring services to vendors and facilities struggling to bridge the cash flow gap. Before shifting to the up-front model, contact us to see how we can help you meet your cash flow needs and continue to provide quality care to your patients.

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