Why Patients Skip Out on their Medical Tab

The billing process of medical care is a complex system of codes, services, benefit analysis, billing departments, and software – all known as “revenue cycle management.” Patients are paying for more and more of their care out of pocket, which causes financial problems for families, as well as hospital CEOs. Historically, hospitals received 90% of payments via insurance reimbursement. With high-deductible plans, now the patient is paying nearly a third of the bill. This new wave of high-deductible plans and cost-sharing groups has led to a more accurate description of the billing system: “revenue cycle MISmanagement.”

A decline in collections and increased patient portions (more self-pay), as well as personal bankruptcies, are reasons that hospitals will likely go unpaid. The billing departments only know how to handle large groups or insurance companies, not how to deal with small payments from thousands of patients. High deductible plans are on the rise with employers offering benefits, with a quarter having a $2,000 deductible. Nearly two thirds of Americans have less than $1,000 in savings, so these underinsured people have insurance cards but struggle to pay the deductible. Hospitals charge insurance companies more because they know that deductibles are so high that many times they won’t collect it.

Hospitals need to be more transparent with billing and pricing, so patients can save up money for their healthcare needs, just like they save for all other types of services. Billing should be itemized and streamlined; bills that are easy to understand are more likely to be paid. Financial counseling before a procedure is also a good idea, when possible.

Patients have become shoppers and simply want to know what they owe. At MediBid, we change the paradigm. The hospital bids a fair price and the terms state they are paid 100% of their bid at the time of care. This is why our prices are 35% to 55% lower than discounted insurance prices.
Fletcher, Holly. “Why more than half of hospital bills don’t get paid.” Health Care. The Tennessean, 7 Mar 2016. Web. 13 Mar 2016.

One response

I agree! The cost to a medical practice for dealing with insurance companies is driving the cost of healthcare higher. It is unsustainable. One solution is to offer patients self pay rates that are much lower than the fees that are paid while still under their deductible. Unfortunately due to insurance contract guidelines, discounted fees aren’t allowed. So patients must locate doctors who don’t participate in their insurance plan.

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