Number of hospitals requesting up-front payments continues to expand

A few months ago, FierceHealthFinance recounted the tale of the M.D. Anderson Cancer Center, which drew considerable attention when in 2006, it asked a leukemia patient for $105,000 in cash up front because it wasn't satisfied with the extent of her insurance coverage. At the time, M.D. Anderson's policy was unusual enough to surprise consumers--and even some fellow hospital administrators.

Increasingly, however, these policies are becoming more standard. For example, in South Florida, an informal survey of 22 hospitals found that all have required up front payments for elective surgeries for years. Given how long such policies have been in place, patients are used to making up front payments. However, what's shocking some patients, they note, is just how big a payment they're having to make at times, given the growing size of their out-of-pocket costs. Patients who need a major diagnostic procedure might need to bring $2,500, or even $5,000 to the hospital, in fact.

It isn't just South Florida facing this issue, however. According to a recent IRS review, in 2006, about 14 percent of 481 nonprofit hospitals across the U.S. required patients to pay any insurance gap up front or at least work out a payment plan before they get an elective procedure.

Hospitals say they're being sapped by care for growing numbers of uninsured patients, and say that unless they get tough on patients with some means, some of the facilities simply won't survive. For example, both HCA and LifePoint hospitals saw profits drop substantially during the first quarter of this year, largely due to jumps in bad debt expense--including lower collections on patient accounts.

To learn more about this trend:
- read this South Florida Sun Sentinel piece

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In 2007, bad debt rising for hospitals
Bad debt savages HCA, LifePoint profits