Patient portion of fees often a mystery

When Ellen Brull, MD, a family physician in a three-doctor practice in Niles, Ill., changed medical billers, the previous one handed over $35,000 worth of old, unpaid bills that she hadn't known existed. So, she sent those patients new invoices. A few patients called to say they were billed in error. Most ignored them. Only about $1,000 came in.

To prevent this from happening again, Dr. Brull would like to find a way to collect more at the time of service. But she has spent the past year breaking in the new biller and working 14-hour days implementing an electronic medical record system. There isn't time to figure out, beyond a stated co-pay, how much her patients should pay on the spot.

Dr. Brull's trouble with determining patient payment -- and subsequently collecting it -- is common, as a recent survey highlights.

A survey of 1,279 physician practices, medical billers and billing offices released June 15 by NaviNet Inc., a health care communications network, found that 49% were unable to estimate the amount due at the time of care, other than a predetermined co-pay.

Experts generally advise that the odds of physicians getting full payment go down the moment the patient leaves the office. NaviNet's survey bears this out. About 31% of respondents said they bill patients but get only a portion of money due. Another 57% said they get "most" of their money. Only 12% reported that "we send patients bills, and they pay them."

Collecting at the time of care is growing in importance as even insured patients are increasingly on the hook for an ever-larger share of costs.

A report released June 23 by the Dept. of Health and Human Services said the annual cost of co-pays and deductibles for those with employer-sponsored health care rose 19% from $1,260 in 2001 to $1,522 in 2006. A report issued June 2007 by the management consulting firm McKinsey & Co. said doctors collect only about half of the balance due from patients and that this translates to $14 billion to $30 billion in bad debt annually.

Physicians "are used to getting most of their income from insurers, but there's a real shift in the revenue stream," said Kendra Obrist, NaviNet's chief marketing officer.

One way insurers and others have tried to increase patient pay rates is through real-time claims adjudication. With this method, a practice submits information to an insurer, which then sends back an estimate of the patient's share, which can be sought at the point of care. Or, plans and companies, such as NaviNet itself, offer tools they say let practices estimate patient share. Though not real-time adjudication, it gives practices an idea of the patient portion.

Only a small percentage of physicians use such technology, experts say, because physicians don't have the systems to support it, and health plans are slow to test such systems. Also, some insurance contracts prevent physicians from obtaining anything more than the co-pay until after a claim has been adjudicated.

But even without real-time adjudication, some practices have ways to determine patient share -- and get it.

Billers and other health care firms can work out the amount owed at the time of care, although this service is rarely free. Insurers also can be telephoned for this information.

"A lot of problems can be avoided by verification of benefits prior to the visit," said Jennifer Zarate, CEO of the Professional Medical Staff Assn.

But even if it is allowed, sorting out health plan rules can be difficult.

"Staff have got to be trained to understand the various programs that insurance companies are offering their patients," said Kenneth Hertz, a principal in the Medical Group Management Assn.'s Health Care Consulting Group. "And they need to understand how to read insurance cards."

Some physicians deal with this by limiting the number of insurers with whom they will work and establishing a price list that is handed out to patients. For example, Remy Coeytaux, MD, PhD, a family physician and medical director of Chapel Hill Integrative Medicine Associates in Chapel Hill, N.C., has a system for patients on Medicare or Blue Cross and Blue Shield of North Carolina. They are charged a co-pay, if that is appropriate, and are billed after the visit when it is determined what they owe.

For any other plan, patients pay upfront and are reimbursed by the insurer, although the practice is willing to file the paperwork. All patients know the prices ahead of time.

"We have no bad debt," he said. "And patients are knowledgeable about costs to them."

Experts say it is key to train patients to pay this money and staff to ask for it. Some suggest mentioning payment during the appointment reminder phone call.

"Part of this is educating the patients that these are legitimate charges that are not covered by their insurance," said Ken Carr, vice president of consulting for McKesson Corp.