Hospitals pressing patients to pay in advance
On the day before surgery to remove a lump in her breast, Sandy Brown received an unexpected call from the hospital.
Bring the money for your co-payment or your surgery will be canceled, Brown said the caller told her in December.
“It was horrible,” said Brown, 61, of Saxonburg.
Doctors at Allegheny General Hospital had diagnosed her with ductal carcinoma in situ, a noninvasive form of breast cancer that is not considered life-threatening. Surgery, followed by radiation, reduces the risk of invasive breast cancer.
“Don't they care about the patient? All they want is the money,” she said of the hospital's request for $800. “Are you kidding me?”
Hospitals increasingly are demanding upfront payment before treating patients to prevent unpaid bills. In Pennsylvania, debt-burdened hospitals want to stave off more than $1 billion of annual bad debt. They look for upfront payment for big-ticket items such as surgeries and MRIs.
Bad debt could soar as people sign up for insurance plans that make patients responsible for a bigger portion of hospital bills, experts said. As a result, the money hospitals collect for services, aside from payments by insurers, depends on how much they can collect from individuals.
“The hospital needs to collect that patient portion,” said Denis Lukes, chief financial officer for the Hospital Council of Western Pennsylvania. “The reality of it is many times a hospital can't collect that after the fact because not all patients are cooperative. ... Some of them don't have the wherewithal” to pay.
At issue are high-deductible health plans, offered by more than half of the nation's large employers, according to the benefits consulting firm Mercer. The plans have grown in popularity in the past five years because they have lower monthly premiums, but consumers are responsible for higher deductibles — at least $1,300 for individuals and $2,600 for families.
The plans are popular among people looking for bargain-priced insurance coverage in Obamacare's online marketplace.
“It's more difficult to collect after the fact in many cases,” said Dan Laurent, spokesman for Allegheny General and its parent company, Allegheny Health Network. “With health plans shifting their financial responsibility to patients, it's really important that people understand what their out-of-pocket responsibilities are when they're choosing a health plan.”
Laurent said the hospital would never cancel a medically necessary service because of a patient's inability to pay. He expressed regret if Brown was informed otherwise.
“If that indeed did happen, that's something we'll need to address internally to make sure our policies are being applied appropriately,” Laurent said. “Clearly it's important that patients be able to focus on their health and getting well, and not be surprised by hospital bills before or after they receive the care.”
A hospital policy established in 2008 requires notifying patients 96 hours in advance of any financial obligation, he said. If a patient cannot pay, he or she is offered a payment plan or the option to talk to a financial counselor, Laurent said.
He declined to say how many people seek financial assistance or how much bad debt the hospital system absorbs in a typical year.
Administrators at UPMC, the region's largest hospital network, said they have more patients with high-deductible plans and talk to them about their financial obligations “well in advance” of a procedure, said spokesman Paul Wood. Patients who cannot pay are given the option of a payment plan, he said.
“While we ask for the patient's co-pay at the time of service, we do not and would not terminate that service if the patient is unable to pay. This is the last thing a patient needs to worry about walking into the hospital, or to be surprised with the day before a procedure,” Wood said.
UPMC reported about $212 million in bad debt for fiscal year 2014. The health system uses robocalls to remind patients of appointments and applicable co-pays at least several days before a procedure, he said.
At independent St. Clair Hospital in Mt. Lebanon, patients who pay upfront receive a discount, though spokesman Robert Crytzer declined to say how much.
“We find patients are greatly appreciative of being informed what their co-pays are prior to service, in that many are not exactly sure of the dollar amount required by their respective health insurance plans,” he said.
David E. Williams, a health care consultant in Boston, said patients are leery of hospital bills because they don't understand the complexities of health insurance. He encouraged people to become more familiar with the plans.
“If hospitals wait to bill later, the patient, in addition to being generally less likely to pay, may not believe that they actually owe it because they're not sure how the insurance works,” said Williams, co-founder of the Health Business Group.
With high-deductible plans, a patient who once was responsible for $50 might be on the hook for thousands of dollars, Williams said. Owing money for a health-related procedure is different from owing money for a car, he said.
“If you don't make your (car) payment, somebody can repossess it. They are not going to undo your surgery or take your knee replacement,” he said.
Brown, who has a Highmark high-deductible plan, said she brought a check with her on the day of her surgery, Dec. 17. An employee could not tell her if the money would go to the hospital, the surgeon, or the anesthesiologist, she said. Brown simply wanted to know.
She was satisfied with the care she received and described those who took care of her as informative and polite. She urged hospitals to reconsider when they talk to patients about money, especially those in the midst of a serious health crisis.
“It's a very anxious time. It's a lot of stress; it really is,” Brown said. “When you're going into surgery, I don't think anybody should be saying, ‘I want your money now.' ”
Luis Fábregas is Trib Total Media's medical editor. Reach him at 412-320-7998 or firstname.lastname@example.org.