United offer: We'll pay doctors up front for patients' share

In exchange, physicians must accept lower reimbursement. And with enrollment voluntary for physicians and patients, there's some question about whether the plan will take off.

By Jonathan G. Bethely — Posted April 10, 2006

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UnitedHealth Group is launching a pilot program it believes will make physicians' lives much easier when it comes to collecting patients' share of costs. Rather than having to confront patients, physicians and hospitals would get that money from United, which then would collect from the patient.

Minnesota-based United figures the plan will have great appeal for physicians and hospitals, who often report that 15% to 20% of patient debt never gets paid and that even the debt they collect costs them time and money. It's one of many ideas popping up to reassure physicians and hospitals skittish about consumer-directed health care, because it might result in greater efforts to collect patient fees.

Under the program, called OnePay, United pays the patient's portion of the medical bill to a physician or hospital after adjudication.

United's first recourse would be to deduct funds from the patient's health savings account or health reimbursement account. If the patient isn't able to pay within 20 days, United becomes a creditor through its bank, Exante, and would deduct payments plus interest from the patient's paycheck. United is limiting the amount to be deducted to around $100 per month until the medical bill has been paid.

"We're trying to shift everyone's role and responsibility," said Tom Policelli, senior vice president of health care financial solutions for Uniprise, United's consumer-driven health care unit.

"This pilot will fail if we don't improve the hospitals' [and physicians'] cash flow. The real trick is to attract a cross section of the population," he said.

Physicians, hospitals, patients and employers must volunteer for the program. For-profit hospital company Tenet Healthcare has said its 14 Texas hospitals will participate in a year-long pilot with OnePay to see if it can reduce the facilities' 15% bad-debt ratio. But so far, no physicians in Texas, the only state in which United is attempting the pilot, have signed up, the insurer said. And there's some question whether patients also will pass on the program.

For one thing, physicians and hospitals would have to take discounted reimbursement in exchange for the guaranteed pay of the patient portion. And analysts believe the patients whose debt physicians are most likely to write off are also the most likely not to sign up for OnePay.

Robert Gunby, MD, a Dallas-based obstetrician, likes that the OnePay program would take the physician out of the billing process between the patient and the insurance company.

But Dr. Gunby said before he agrees to participate in the program, he'd want to know what the discounted reimbursement rate will be. For instance, he said he'd be less likely to sign up if the rate is more than the 2% to 3% physicians lose to credit card transactions.

"I'm not so sure how good it's going to be for the patient," Dr. Gunby said. "If the patient is in financial trouble, we usually write it off. Certainly it will be a little better off for us."

Policelli said United and Uniprise executives hope to meet with physicians in Texas to discuss proposals for the discounted reimbursement, whose terms have not been set.

Dick Bell, an insurance adviser in Calabasas, Calif., and past president of the Society of Financial Service Professionals, said he believes OnePay will have a difficult time surviving. Bell said employers might balk at the program because of the added administrative work necessary to deduct medical payments through company payrolls.

But more important, Bell is concerned that the segment of patients who traditionally have had difficulty paying medical bills -- the underinsured and working poor -- might not be willing to sign up for a program that automatically deducts money from paychecks.

"People who are really cutting it tight financially won't sign up for this, because they don't want anyone touching their [paycheck]," Bell said. "The people who are going to take advantage of this were going to pay anyway."

Jane Cooper, CEO of Milwaukee-based Patient Care, which advises individuals regarding their health benefits, said she doesn't expect United's program to catch on throughout the industry until United can demonstrate its success for patients, employers, physicians and hospitals alike.

"Employers are going to be very cautious about recommending something like this," Cooper said. "It may be a situation where people that need it don't take advantage of it."

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