When Helping the Patient Is Unfair to Their Physicians

Some new credit agency reporting rules can make it impossible for physicians to collect legitimate patient amounts due.  

The No Surprises Act is big news. I think we all agree that personal medical bankruptcy is out of control. I think we all also agree that some charges from out-of-network facilities and providers are egregious and ludicrous. However, that is only part of a much larger story. 

Not every patient bill is a result of out-of-network physicians. Not every patient bill is for uninsured patients. Many patients do not pay their bills, no matter how legitimate. Why is no one talking about the fact that our physicians are expected to provide high-quality care, but potentially not be paid a fair and owed amount? Why is no one talking about the new patient protection credit reporting rules taking effect in July, which will prevent some specialties from successfully collecting legitimate patient bills? I wish our lawmakers and policymakers had some clue about the unanticipated fallout before touting how wonderful these new laws and rules are.

Many health exchange plans, as well as employer plans, have monthly premiums ranging from a state low of $338 to a high of $712 per month. And that is just the tip of the insurance iceberg. The number of insured beneficiaries, their ages, levels of each plan, healthcare needs, and deductible amounts are all variables. Deductibles in the thousands are now common. Cost sharing is rarely the 80/20 that once was the hallmark of a great plan. The bottom line is that patients owe a lot of money for their insurance plan coverage, and a significant portion of monies owed is legitimate, in network, for services performed by participating physicians, with out-of-pocket amounts such as deductibles and cost sharing. It is those legitimate patient amounts due that are often unpaid. 

Let’s talk about patient ownership. It is true that employers may choose plans that are affordable, but not necessarily the most patient friendly. It is true that patients may opt for a high-deductible plan to keep premiums lower and affordable. That works well if only routine wellness care is needed. Unexpected illness or injury, however, can put the patient in significant debt. What happens next is where the physician problems often begin. 

The vast majority of physicians and their billing companies are happy to work with and help patients successfully pay their legitimate medical bills. Financial consideration, bill adjustments, and payment plans are almost always available. Sadly, many patients make no attempt to communicate needs, and ignore their medical bills.

Patients can deny ever receiving a bill, even when it’s quite obvious that is untrue. It is not uncommon that patients want to pay after receiving a notice from a collection agency or when they try to buy a house, car, or other item, and their credit rating is problematic. I am not talking thousands of dollars owed to physicians. Often it is the co-pay and/or deductible amounts that were ignored. 

The above issue is where the new credit agency reporting rules can make it impossible for physicians to collect legitimate patient amounts due – and in fact, can actually harm the patient. I don’t know anyone who disagrees with removing medical debt credit bureau reporting, once the debt is paid. It is the rest of the story that is so problematic. 

One credit agency reported that one-third to one-half of all money collected is a direct result of the patient wanting to avoid a bad credit rating. The requirement to wait a year after the last date of service prior to reporting to the credit bureaus prevents any possibility of filing insurance claims.

Patients who may have ignored physician bills requesting insurance information often make their first contact with the credit agency. If the bill can still be sent to insurance in timely fashion, it may relieve all or some of the amount the patient owes. Once a year has passed, there is no option for that to occur. The patient owes it all. 

In addition, the minimum threshold of $500 is an amount that exceeds what many specialties have listed. Diagnostic professional component amounts are just one example. One agency reported that the average amount reported was $157. Those providers will have no opportunity to collect what the patient owes.

In summary, yes, patients need protections from unfair and unreasonable medical billing practices. However, our physicians need help collecting fair and legitimate amounts due from patients. The anecdotal industry information being touted is that patients do not have to pay their medical bills, and there will be nothing the physicians can do about it.

That’s the wrong message!

I sincerely hope our lawmakers and policymakers sit up and pay attention to the road to hell that was paved with good intentions.