The New and Emerging Self-Pay Patient: Effects of the Affordable Care Act on Emergence Medicine

By Mark Owen, Director, Emergency Medicine Services, Payor Logic, Inc.

In an era of high deductible health plans (HDHPs) and skyrocketing copayments, patients-and sometimes their providers-oftentimes bear the brunt of rising healthcare costs. In fact, one could argue that the notion of “self-pay” is no longer specific to those without insurance. That’s because patient financial responsibility is at an all-time high even for those who are technically insured.

The 2014 Milliman Medical Index reveals that a typical American family of four covered by an average employer-sponsored health plan has seen an annual increase of more than $12,000 in out-of pocket expenses. The Centers for Disease Control and Prevention reports that health insurance premiums for a typical family of four have increased by 114% since 2000, with workers contributing an average of $694 annually toward the cost of single coverage, and $3,281 annually toward the cost of family coverage. What does all of this mean for Emergency Medicine practices and their billing partners?

Unpredictable Revenue

Unlike insurers, patients are far less predictable, increasing emergency practices’ risk for uncompensated care. Patients are either unable or unwilling to pay for a greater share of their own medical bills, leaving practices vulnerable to inevitable nonpayment. This is somewhat ironic, given HHS’ statistics indicating that uncompensated care is actually decreasing.

HHS’ Office of the Assistant Secretary for Planning and Evaluation found that in 2014, uncompensated care decreased by 26% in Medicaid expansion states as a result of marketplace coverage and Medicaid expansion. It’s important to note that 22 states did not expand Medicaid. In addition, many patients simply choose not to purchase insurance. Other patients may be eligible for Medicaid and not know it.

Collecting accurate information and copayments at the time of registration has become an incredibly complicated and resource-intensive task that not every practice or billing company can handle effectively. These emerging self-pay issues may only worsen in light of an influx of patients into the healthcare system.

The Financial Clearance Challenge

According to 75% of physicians surveyed, visits to the ER are up in the wake of the Affordable Care Act. EDs have begun to feel the financial strain of increasing patient financial responsibility and nonpayment risk during a time when patient volumes are at an all-time high.

What can emergency practices do when self-pay patients, including those with insurance coverage, simply don’t pay? It’s literally and figuratively the million dollar question. With today’s rapid growth in HDHPs, providers must find new and creative ways to engage and educate patients about their financial responsibilities.

Financially clearing emergency medicine patients has emerged as a top job for practices and their billing partners. Alongside clinical triage, financial clearance of each patient, including those presenting as self-pay, is an important step within an effective revenue cycle workflow.

Adding another step in the process is a tough pill to swallow in busy emergency departments that are already stretched to the maximum in terms of staffing and resources. Yet financial clearance is a step every practice must take to address new self-pay populations and greater consumerism in healthcare.

While it is always best to settle financial obligations at the time of service it requires special real-time technology.  Even when it is not possible to engage the patient at the point of discharge such new technology can be used immediately following the service to establish precise benefits available, credit worthiness, and accurate demographics to more effectively pursue reimbursement.