Some hospitals seek upfront payments from insured patients

Hospitals in Kentucky and Indiana are hitting up insured patients for upfront payments, out of concern they won't meet their deductibles and copayments otherwise, the Louisville Courier-Journal reported.

Mark Edwards, a businessman in Paducah, Kentucky, was charged $500 upfront and $2,500 altogether for an outpatient procedure, despite having insurance. "Luckily, I could take out a credit card and pay. A lot of people can't," he told the Courier-Journal.

"We always encourage them to try to pay something in advance," Donna Ghobadi, assistant vice president of managed care and revenue cycle for Baptist Health, told the Courier-Journal. In one case, the hospital system placed a patient with an $1,800 bill on a $75 monthly repayment plan.

About 20 percent of the nation's insured have a high-deductible health plan, compared to about 4 percent in 2006. And roughly 20 percent of those people who purchased coverage through the exchanges purchased high-deductible bronze plans, which do not include subsidies to cover out-of-pocket costs for enrollees in certain income brackets.

As a result, hospitals in Kentucky and neighboring Indiana say they're struggling with mounting bad debt. It was $659 million in 2012, nearly double the $334 million reported in 2008. "The bad debts are just going through the roof. That's been a trend," Nancy Galvagni, senior vice president of the Kentucky Hospital Association, told the Courier-Journal.

Along with the expense of using collection services, a large number patients are less likely to pay for their care after they receive it, according to data from the Advisory Board Company.

The trend among hospitals to collect payment upfront mirrors one among medical groups, which also have become more aggressive when it comes to getting money from patients. One medical group in Louisiana, for example, tries to collect all out-of-pocket costs upfront. If it can't, it will work out a payment plan with the patient.

To learn more:
- read the Louisville Courier-Journal article