By: Michelle Husted
First let me say that is not just you mental health providers, but all types of providers as well as hospitals. Would you walk out of Target without paying? No that would be shoplifting. So why do so many patients feel it is ok not to pay their deductible or copay when they visit their mental health provider?
For one the average single deductible has doubled. 80% of people have an annual deductible, of those people only 10% had deductibles over $1000 in 2006, in 2014, 41% did. Because of the escalating cost of healthcare, people are left with the conundrum of paying a lower monthly cost for their premium but a higher deductible or paying higher premiums for a lower deductible. Most chose the latter; hedging their bet and avoiding visiting the the doctor because they can’t afford to.
It’s like car insurance people pay for it hoping they won’t need it. Then of course they do, and they are not financially prepared to pay the out of pocket costs associated with their visits, or may not even remember what coverage they have. If a patient is frequently visiting a provider and that provider isn’t collecting from them-then the debt begins to accumulate and it is overwhelming to the patient. Most of these people have not budgeted for these expenses.
Here are the average Single coverage Deductibles as well as the Household Median income for 2014 for the U.S.
Part of U.S. Deductible Median Household Income
West $1307 $73,000
Midwest $1294 $60,000
South $1172 <$55,000
Northeast $1099 >$75,000
Now add to that equation:
10.0% of patients are self-pay
51.8% have commercial insurance
37.3% use public such as Medicare/Medicaid
Providers wonder why they are getting ‘stiffed’ by some of their patients, the big reason is that they are not verifying coverage for insurance that they are panelled with, and/or not collecting co-pays & deductibles up front. When January first rolls around you can pretty much bet the farm that the patient has had insurance changes and they have a deductible, co-pay or coinsurance, and in some cases, all three.
Some providers, who haven’t verified coverage/ collected up front, when they are aware there is a deductible after the EOB’s for claims start rolling in, usually have already seen the patient a few times and there is a balance. They then continue to see the patient, still not collect, nor make payment arrangements for the past due amounts. Technically it is illegal not to collect copays, or to discount them.
If a provider has verified coverage and is aware that there is a deductible their best bet is to charge the whole fee up front, and once the deductible is met, use any of that credit towards co-pays for future visits. 30% of patients never pay a cent after they leave a provider. Of past due uncollected copays and deductibles only 15% will be collected.
20% of Americans have a diagnosable mental illness. No one is cured after one visit to their mental health provider. Some come in for years, and some only come in for their 5 EAP visits. Regardless, you will see the patient most probably on a regular basis, and the first visit is when you set your standard with the patient with your expectations of them paying for your service. How you handle it, will either increase or decrease your revenue.
In the end the reasons patients usually don’t pay their ‘tab’ is because the provider doesn’t ever bring it up to them in person, and doesn’t collect up front. As in any relationship- even a patient provider one-if you continue to let them get away with it, they will continue not to pay you. Use the advice you offer your clients and set clear boundaries when it comes to them being responsible financially for your services.