Please pay first, more hospitals say

An OhioHealth registrar called Kelley Finan to pre-register her for her scheduled outpatient arthroscopic knee surgery and verify her insurance policy.

Then the woman told Finan that she owed $1,365.16 out of pocket for the procedure.

“How would you like to pay for that today?” Finan recalled the woman asking. “We take credit cards or debit cards.”

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Finan, 54, of Grandview Heights, said she refused to pay upfront, and the OhioHealth representative backed off.

“She never indicated her demand for payment was a ‘suggestion’ until I called her out on it,” Finan said.

Increasingly, local hospitals are requesting not only co-pays upfront but also deductibles and coinsurance, which is the patient’s share of the cost of a covered health-care service beyond the deductible.

Officials with all local hospitals that request payment of deductibles and co-insurance before a scheduled surgery or other health care said they don’t deny patients care if they refuse to pay upfront.

“We’re not holding patients hostage,” said Keith Coleman, Mount Carmel Health System’s chief financial officer.

On July 1, Ohio State University’s Wexner Medical Center will begin requesting — but not requiring — that deductibles be paid upfront at all of its locations where health-care services are scheduled in advance. The practice has been used sporadically for two years by Wexner Medical Center, which has not yet begun requesting co-insurance payments upfront.

Some other service providers, such as the travel industry, expect payment upfront, so it’s not unprecedented for the health-care industry to do the same, said Debra Lowe, the hospital’s administrative director of revenue cycle.

“If your car needs replaced and you owe your $500 deductible (in an insurance claim), it’s very clear that you need to pay that for services to be rendered,” Lowe said.

Hospitals are taking such steps to head off the possibility of bad debt as consumers see their deductibles balloon for employer-sponsored and individually purchased health coverage. Among workers who are enrolled in health benefits through their jobs, 15 percent had a deductible of at least $2,000 last year, up from 3 percent in 2007, according to a survey by the Kaiser Family Foundation and Health Research & Educational Trust.

In the fiscal year that ended June 30, Wexner Medical Center collected $3.6 million from patients upfront, primarily in copays and deductibles. That total is expected to hit $4 million in the current fiscal year, which ends next month.

Local hospital systems recorded a combined $357 million in bad debt in their most recent fiscal years, up 14 percent from a year earlier.

Larger deductibles appear to be more common with the advent of policies available through the federal government’s new health-insurance exchanges, or marketplaces, Lowe said. She said Ohio State already has seen at least three patients whose policies purchased through Ohio’s federal exchange have deductibles of at least $10,000.

More hospitals are testing and adopting the approach, said Elisabeth Russell, the founder and president of the patientadvocacy consultancy Patient Navigator. “It’s harder to collect money from someone after they’ve walked out the door.”

With far more of patients’ own money at stake, it’s important that they understand how much is owed, Russell said. But she said patients also can lose leverage in their dealings with hospitals and other health-care providers if they pay deductibles and co-pays upfront.

“I think they should, if possible, avoid paying upfront (in case) things get messed up — as they usually do — in hospital bills,” Russell said.

At Wexner Medical Center, patients’ deductible payments are underestimated to reduce the chance that a patient will be overcharged.

“The last thing we want to do is overcollect and then have to refund your money,” Lowe said.

OhioHealth began collecting co-pays upfront from patients in 2008, and deductibles and co-insurance in the past two years, said Jane Berkebile, system vice president of revenue-cycle management.

In its most recent fiscal year, which ended in June, OhioHealth collected $19 million from patients at the point of service, including co-pays, deductibles and co-insurance, Berkebile said. The amount is increasing “as that portion that’s due from the patient has grown.”

Mount Carmel, meanwhile, collects about $500,000 to $1 million upfront each month from patients, said Karen Geisler, patient-financialservices consultant. She said Mount Carmel has requested upfront payment from patients, including deductibles and co-insurance, for about eight years.

Nationwide Children’s Hospital said it does not ask families of patients to pay their deductibles before services are provided.

“If we did move to collecting deductibles prior to service, we have financial counselors that would work with the family on other options,” the hospital said in a prepared statement.