The exceeding medical expenses from the past few years have doubled the out-of-the-pocket incidentals for an average US citizen. This is why people are more inclined toward high-deductible health care plans with expectations of saving on monthly premiums and having maximum insurance benefits.
On the other hand, these plans change eventually burdens their wallets when it comes to paying doctor bills and filling prescriptions. But can doctors collect deductibles upfront?
In the past, doctors have been really slow in identifying the need of submitting unpaid bills to the insurance companies which lead them to a loss of revenue. Later, healthcare providers and physicians are switching to make changes in their point of service collections. In this regard, they insist patients pay for the medical services upfront before they leave the clinic/office. While, these changes to the system may not make everyone happy, but this is the only way according to the healthcare community to regain the momentum and reduce the revenue losses.
What does point-of-service collection mean?
Point-of-service (POS) collections have different interpretations according to different scenarios. In the healthcare community, POS collections are termed upfront collection, time-of-service collection, or front-end collection. Oftentimes, a healthcare provider requests payment before the services are rendered and sometimes at the point before a patient is discharged or leaves the hospital.
When pursuing a POS collection system, providers ask for upfront payments from everyone including patients who are insured, copay, and everyone who either needs to pay deductible or coinsurance amount. POS collections also include payment plan payments or prior balances. In addition, several medical and healthcare providers and private physicians who follow POS collection accept credit cards, checks, and cash.
This means you have to have complete knowledge about the system your healthcare provider is offering. You may have to pat upfront or return without treatment.
Can doctors collect deductibles upfront?
With expensive premium insurance plans and the deductible charges, many Americans are facing intricacies in submitting and clearing their medical and insurance payments. Academy of Healthcare Revenue says that it’s up to 70% chance for healthcare providers to get their payments on the time of service rendered and 30% of receiving the payments on the time when a patient leaves the clinic/hospital.
Since many patients become unable to pay the balances for the services they received, providers then request them whether they like to stay in business.
The doctors and healthcare providers also ask for the upfront fees as the reimbursement rates from the insurance companies that doctors receive keep changing.
Combining the reimbursement rates with the unusual delay in the payments from the patients, it becomes even more challenging for doctors to stay in business and bear the office expenses. These expenses include medical equipment, utilities, staff salaries, technology, and the necessary patient care.
By moving to the POS collection system, providers came to the point that they can spend more time taking care of their patients and less time in filling claims and waiting for the money to arrive to pay their bills.
This system is also taken to help the patients in covering costs on time similar to any other services they take. For every service other than healthcare services, they pay upfront and take the services. However, it may not be suitable for every patient or individual, the system allows hospitals and private healthcare providers to stay in business.
How does health insurance work?
With constant changing in the insurance world, the traditional way of copays in the insurance sector has almost gone out of style. Now people are dealing with health insurance companies that enable a high deductible or coinsurance plan, or a blend of both. However, it is important to note here that coinsurance or high deductible plans do not deny accepting monthly premiums, although these premiums are paid on priority.
- Deductibles – The amount that a patient pays to the insurance company before the company pays for the services, he or she receives is called deductibles. They are also known as out-of-pocket expenses which include sick visits, medical procedures, prescriptions, and hospital stays. This simply means that if you take the plan with an $8000 deductible cost, then you have to pay $8000 to receive medical services first so that your insurance company will be able to share your burden.
- Coinsurance – Once a patient pays all the deductible amount of his bills, the insurance company will only be responsible to pay a percentage of the bill. Coinsurance means both patients and insurance companies are likely to contribute to the expense based on a certain percentage. Typically, patients pay ten to twenty percent of their total bill in out-of-pocket costs and the rest of the percentage is met by the insurance company. This percentage varies across insurance companies and allied jurisdictions.
What is the role of insurance policies?
Different insurance companies have different policies to ease the burden on the patients. For example; patients are informed of the policies having an annual deductible option with a pat range of $100 per doctor visit. This $100 will be counted in the out-of-pocket cost for the patient and also contributes to the annual deductibles. Once a patient cleared all the deductibles associated with their annual plans, they would not be asked to pay $100 as deductibles. However, an annual physical is not included in the deductible amount of $100 until the patient sticks to the guidelines provided by the insurance provider.
Many times, insurance companies and private providers select a POS collection system for the following reasons;
- Patient budgeting – The POS collection system enables a patient to plan their medical spending beforehand depending on their medical needs. It also helps them to allocate the limited payments to the medical needs when the expenses are directly coming out of pocket. Instead of paying a high amount when they get billed, a $100 bill can be paid upfront and the rest can be saved for later.
- Office budgeting – when a doctor or healthcare office knows how much they would be generating revenue steadily. With this, office operations and expenses can be managed smoothly. However, healthcare providers remain in continuous contact with the patient’s insurance companies, therefore the POS system ensures that the cost of service is paid at least partially so the insurance company would not be liable for the whole.
- Compliance with the insurance company – It is the legal binding between the insurance company and the patient when they agree to a contract. By doing this, insurance companies abide by the financial obligations of the patient. With this insurance companies do their part to make sure that the patient will follow up on the contractual terms.
It is obvious that increasing medical expenses are making it challenging for an individual to cope with their medical needs. This is why insurance companies make policies to help patients so they can save money by keeping the deductibles minimum.