Patient Access Monthly Journal Source: The Academy of Healthcare Revenue
Collecting from Patients with CDHPs in the ED
January, 2007 –Consumer-driven health plans (CDHPs)—also known as high-deductible health plans with an attached tax-exempt health savings account (HSA)—continue to be an increasing concern for many revenue cycle leaders. Because CDHP beneficiaries often have very high deductibles in exchange for low premiums, providers are facing increased risk of bad debt from patients’ growing self-pay responsibilities. Moreover, patients may experience “sticker shock” when they learn the true costs of care and delay or avoid paying their medical bills. In hospitals’ emergency rooms, patients with CDHPs are of particular concern since their plans often do not cover any expenses until patients have met their annual deductible, which can be as high as $10,000. These patients present a considerable challenge for providers, as collecting in the ED is typically more difficult than for scheduled inpatient visits.
A recent study indicates that CDHP beneficiaries are generally dissatisfied with their plans. The study found that approximately 1.3 million non-elderly individuals were enrolled in a CDHP. In addition, approximately 8.5 million non-elderly individuals were enrolled in a high-deductible health plan (HDHP) with no health savings account. The study also reported that individuals in a CDHP or HDHP were more likely to delay or avoid necessary primary or preventive care because of costs than individuals enrolled in traditional PPO or HMO plans; this may cause conditions to worsen and drive patients to utilize costly ED services in higher numbers.1 Perhaps most worrisome, the study found that an overwhelming majority of individuals with an HSA did not have significant savings in this account (certainly not enough to cover their deductible), as the graph below shows.
It is important to note that most beneficiaries’ CDHPs do not cover any ED services until deductibles have been reached. Even after deductibles have been met, patients may still need to pay a co-insurance or co-pay. For example, United Healthcare offers beneficiaries a variety of CDHP options with different coverage. Three such plans are Plan 100, Plan 80, and Saver 80, each having a maximum deductible of $5,000. Each plan does not cover ED services until beneficiaries’ annual deductibles have been met, with Plan 100 covering all remaining costs, and Plan 80 and Saver 80 covering 80 percent of costs after deductibles have been met. For ED services, however, if patients whose deductibles have been met are not admitted to the hospital, then patients must pay a $100 co-pay for Plan 100 and Plan 80. Beneficiaries with Saver 80 must pay a $500 co-pay if they are not admitted.2 This illustrates the vital importance of verifying patients’ insurance benefits at point of service so that all out-of-pocket expenses can be communicated to patients before discharge.
Although CDHPs and HDHPs do not yet take up a significant share of the private payer market, these plans are becoming increasingly attractive for payers and employers. It is vital that revenue cycle leaders communicate with employers and major payers in their area to determine if these plans will have a major impact on providers’ revenues. After determining the approximate number of CDHP users within your service area, implement needed revenue cycle changes to successfully collect from these patients and reduce the risk of bad debt, especially in the ED.
1 “The 2nd Annual EBRI/Commonwealth Fund Consumerism in Health Care, 2006: Early Experience with High-Deductible and Consumer-Driven Health Plans,” Employee Benefit Research Institute, December 2006.
2 “Health Plans for Individuals and Families,” United Healthcare, 2006.
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Media Contact Ross Monaghan
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