Access staff must work smarter, as high-deductible plans gain popularity

Financial counseling needs, insurance questions likely to increase

As the trend moves inexorably toward more consumer choice in medical care, access departments are likely to see an increasing number of patients with some version of what is known as a consumer-driven health plan (CDHP).

Along with CDHPs — simply defined as high-deductible health plans combined with tax-advantaged savings accounts — come some new challenges for frontline staff, industry observers say.

Access staff, they suggest, will be taking on greater responsibilities since more patients will need financial counseling or assistance before receiving hospital services. Another challenge will be distinguishing the different varieties of CDHPs and their accompanying requirements.

The benefits, proponents say, are that CDHPs provide a way for employers to offer health care plans for their employees at less cost, and for consumers to do more comparison-shopping for health care — thus potentially leading to more widespread coverage and reduced health care spending.

Opponents argue that, on one hand, the high deductibles will cause consumers to delay necessary medical care and, on the other, that hospitals' bad debt will increase as they try to collect those larger amounts for which the patient now is responsible.

"The federal government has been highlighting [CDHPs] as a way to make patients more price-sensitive," says Rick Gundling, FHFMA, CMA, vice president, product development for the Westchester, IL-based Healthcare Financial Management Association (HFMA). "Having them out there puts pressure on the health care industry to be more price-competitive."

Under the growing consumerism, Gundling notes, "part of the change is sharing more [financial] responsibility. A lot of employers are dropping [insurance coverage] altogether or looking for ways to make it less expensive for them."

Faced with the inevitability of increased financial responsibility on the part of the patient — already evidenced by higher copays and deductibles in existing plans — HFMA's focus is on helping its members deal with the accompanying changes, he says.

There is some concern that consumers with CDHPs might not fully realize what they've signed up for, notes Larry Connell, FHFMA, CHFP, director of patient financial services at Swedish Covenant Hospital in Chicago.

"You really do have a high deductible, and you have to have money in these accounts [to cover services]," he says. "If you start a plan in January that has a deductible of $5,000, and you have a large service in February, what happens to the claim if you only have $100 in the account? Insurance doesn't kick in until you've met the deductible, so if the bill is below $5,000 you owe the whole amount."

Similarly, it may not have registered with consumers who have these plans that they may not be eligible for the discounts they had in the past, Connell notes. Those who have been accustomed to a copay of $20 may find themselves paying full retail price at the pharmacy, he adds.

To use the plans effectively, people need to be adept at financial planning, he says. "Those with large families who have trouble allocating money will not do well."

If there is not much money in the account, Connell says, people may postpone a minor procedure or a preventive service, such as a mammogram, until the fund is properly funded. Or they may want to save the funds for use after retirement, or in case they need major surgery down the road, he says.

Even if there is plenty of money in the account, Connell points out, there is nothing requiring the holder to use it to pay the physician or hospital.

One insurer Connell spoke with, he adds, said that the insurance cards for his company's high-deductible plan will not display that information.

"[Access staff] will still go through the verification process if they call about the person's benefits," Connell says. "They might think somebody has insurance when they really don't."

A survey by Swedish Covenant of its major payers indicates that they will require the usual pre-verification procedures for the CDHPs. But while his facility's access employees do ask about deductible amounts, others may not, Connell adds. "If it's a minor procedure or an MRI [magnetic resonance imaging], the hospital may go through all the precerts thinking we might get paid, but we're not.

"We had a patient who presented one of these [cards] to us, and there was not a dime in the account," he says. "We billed them — it was about $4,000 — and the account went to collections."

For the past couple of years, notes Barry Bierman, executive director for business development for AHC Inc., a Charlotte, NC-based health care receivables management firm, he has emphasized to clients the importance of operating a hospital more like a business.

That message is underscored in regard to the handling of CDHPs and health savings accounts (HSAs), he says, adding that he has heard from hospital clients about "myriad different experiences" in which such accounts are mishandled.

Those include things like a registrar saying, "We don't need your VISA card right now — we'll bill your insurance and then bill you for any self-pay balance," without realizing the patient was not offering a regular credit card, Bierman adds.

"There is a lot of misinformation out there," he notes. "A lot of providers do not know about all the changes."

If a patient comes in with, say, a Blue Cross-administered HSA and wants to use it to pay for a procedure, the registrar not only needs to verify the balance in that account and charge the HSA VISA accordingly, Bierman points out. The employee then must verify with the insurance company that any remaining balance on the hospital bill is covered, he adds, and determine if it is covered at 100% or 80%, or if the patient is still responsible for an additional copay or deductible.

Detailed questions and proper documentation, Bierman emphasizes, will help protect the hospital's interests down the road.

Identity theft growing concern

With any customer, access staff should ask to see a picture ID, he says, and with the proliferation of high-deductible health plans there is even more justification for stressing that step.

"[Customers] are now coming in with HSA credit cards, into which [in 2006] they're allowed to put up to $2,700 per person, which must be used for medical expenses," Bierman notes. "But what if a person presents that card and it doesn't really belong to him, and the insurance company discovers that it was not the [proper card holder] but some unknown person who was treated? It can deny payment and the hospital can end up with a large self-pay balance.

"There is a lot of identity theft right now," he adds. "A patient could be using a friend or family member's card, and could easily grab from another person's deductible."

While Swedish Covenant has had relatively few customers with these "combination" plans so far, the hospital is seeing many more insurance plans with higher deductibles, notes Gillian Cappiello, CHAM, senior director for access services and chief privacy officer. "So a lot of services essentially are going to be self-pay.

"From a billing perspective, high deductibles are not good," she says. "You have to collect more from the patient, and it costs more money to collect from patients."

CDHPs put providers at risk, adds Connell, because of the potential for more bad debt as consumers fail to pay their share of the costs.

"Bad debt is a challenge," agrees Gundling. As a way of mitigating that risk, he emphasizes the importance of letting patients know up front, "not 30 days later," what their out-of-pocket costs now will be.

Attracting price-sensitive patients

Even more so than before, access departments need a system for communicating patients' responsibilities, Gundling says, and a way to collect that amount or arrange payment terms. With consumers becoming more price-sensitive, he adds, "maybe there will be more one-on-one negotiations."

Gundling says he envisions conversations in which a customer says, "I need surgery. What are your fees?" Hospitals should be prepared to give a good estimate, he adds, perhaps giving the price for a routine procedure without complications.

While it's feasible that consumers "might call around and see where it's most prudent" to have a certain procedure, Connell notes, "the problem is that each facility might quote the service differently."

The price given for a CAT (computerized axial tomography) scan, for example, might or might not include the cost of the dye needed for the procedure, or the radiologist's fee, he adds. "When you call for a quote, typically the hospital cannot quote for the physician."

"Scripting" — encouraging employees to use "key phrases at key times" in communicating with patients — has been an effective tool at Swedish Covenant for several years, notes Cappiello, and will be an important part of handling the challenges posed by CDHPs.

With the advent of health plans that assign more financial responsibility to consumers will come patients who are "a bit more demanding" of time and attention, Cappiello predicts. "They won't want to feel they're on an assembly line."

To attract customers who are comparison-shopping, Gundling says, hospitals may be compelled to promote both pricing and quality data in a much bigger way. Meanwhile, web sites such as Hospital Compare (www.hospitalcompare.hhs.gov) allow consumers to look at how hospitals measure up to an array of different standards for measuring quality.

As those types of tools become available, it will be incumbent upon hospitals to follow best practices, he suggests. "Before, the physician was the main consumer. Now it's the patient."