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ACA changes playing field for insurers and insured

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The News Herald
May 7, 2015
Tommy Cooley Jr.

The Affordable Care Act and recent changes to medical bill credit reporting requirements have created changes in provider’s revenue cycle and left the insured riddled with bills.

An undue burden as a result of the ACA has been place on healthcare providers. This burden is the growing amount of dollars in their patient responsibility receivables. The ACA was enacted with some of the following goals: increasing the quality and affordability of health insurance, lowering the uninsured rate by expanding public and private insurance coverage, and reducing the costs of healthcare for individuals and the government. While more American’s are insured under the ACA, the reality experienced throughout the healthcare industry since the inception of the ACA is a shift in the financial burden to medical practices and facilities to collect the gap created by low cost high deductible insurance. More often than not, the insured simply think having insurance means they are “covered.” Unfortunately, for them and their healthcare provider, costs still need to be paid and collected.

The shift in patient responsibility for healthcare payments is the biggest hurdle for medical business offices. As a result, both patient liability and bad debt are on the rise and healthcare providers are experiencing unprecedented revenue declines as their business model has significantly changed.

In stark contrast, for insured patients, McKinsey has estimated that the rate of bad debt is increasing at well over 30 percent each year in some hospitals. Consumers now pay more in healthcare costs than employers, and that consumer bad debt for medical expenses were $65 billion in 2010. Regardless of whether they are covered under a traditional or high deductible plan, consumers now shoulder a greater upfront cost burden. Significantly, this changes the payments role for providers as well. Providers must now collect payment directly from the consumer, not the insurer.

In August of 2014, FICO announced that medical bills that had been paid off would no longer affect your credit score. Additionally, in March of this year, a landmark agreement was reached with Consumer Reporting Agencies to ensure every effort is taken to protect consumers from erroneous credit reporting. Under the new agreement, the credit-reporting firms will have to wait 180 days before adding any medical-debt information to consumers’ credit reports. During that grace period, consumers will also have time to clear up discrepancies and catch up with other unpaid bills.

When medical debts are paid by an insurance company, regardless of the time frame, they will have to be removed from the credit report soon after. In contrast, most delinquencies and other negative credit events stay on people’s credit reports for up to seven years.

The effects on the insured and providers of the ACA and Credit Reporting changes have created higher patient responsibility balances for both and given the insured more time to make arrangements to properly compensate the provider. That poses question: Why then are provider’s patient responsibility balances at an all-time high?

Simply, providers must now collect higher balances from the patients, not the insurer. This is contrary to the way most medical offices were designed to operate and to the way patients are accustomed to paying. How do providers maximize their returns while providing quality healthcare?

How do riddled patients keep their responsibilities to their providers for care received?

Providers must equip their staff with proactive tools to collect and manage self-pay and patient responsibility accounts. Traditionally medical business offices are  not set up to handle the increased patient responsibility balances created by the ACA.

On the other hand, patients must take responsibility for their own care through dialogue with providers on making payments arrangements no matter what the amount, scope and size of their healthcare situation. The insurance companies have created a complex web for the laymen to navigate. The only way to properly navigate this web is ask questions, document all correspondence and work with your provider in concert to understand what your balance is and why. Insurance companies will provide you with an explanation of benefits. Make sure these match with what your provider is showing.

Don’t be overwhelmed. Understand that the payment process has to start somewhere, and now more than ever providers will take payment arrangements and work within your budget. Providers care for you in more way than one.

The ACA has changed the landscape of where providers are receiving reimbursements. Patients have formed generational habits and views on how providers should be paid and were paid. Accessing health care services can be an intimidating and fear-inducing process for the patient, but adding payment concerns only creates more insecurity for the patient and will no doubt yield a less than satisfactory result for the provider and the patient.


Tommy Cooley Jr. is President of CB services, Inc., a local provider since   1953, of accounts receivable management solutions for owners, executives, practice managers, doctors, healthcare facilities, attorneys, accountants, banks and government agencies.


Founded in 1953, with offices in Panama City and Ft. Walton Beach, CB Services, Inc. is a proven provider of healthcare receivables management and provider solutions. Our services allow our clients to be proactive in their revenue cycle management, allow for timely accurate credit reporting and create patient relationships that foster payments. Please contact our office if you would like a free review of your current business practices, front desk staffing collection methods, business office tools and revenue cycle management. I will provide you with a written action plan that will show in dollars how we can increase your practices or facilities revenues while decreasing overall cost.

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