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More health care providers demanding up-front payment

Jeff Needham of Oldsmar was told he would have to pay his $1,500 health insurance deductible on the day of his 1-year-old son Garrett’s ear surgery in late March. 


Jeff Needham of Oldsmar was told he would have to pay his $1,500 health insurance deductible on the day of his 1-year-old son Garrett’s ear surgery in late March. 

For Jeff Needham of Oldsmar, it was $1,500 before a surgery to place tubes in the ears of his 1-year-old son.

For Rose Casey of Homosassa, it was $600 before a procedure to reshape her cornea.

More and more, doctors and other health practitioners are asking patients — even those with insurance — to pay their share of the costs up front, either before they are treated or before they leave the office.

Providers say the practice isn't entirely new. But with patients now shouldering a greater share of health costs, through insurance plans with higher deductibles, co-pays and coinsurance, they acknowledge a bigger push to collect fees at the time of service. It's more difficult, less successful and more costly to collect from patients after they walk out the door, they say.

But for patients used to a small co-pay, or getting a bill after insurance pays its share, it's a culture shift.

Some worry that up-front costs could affect patients' relationships with their doctors. Others worry they could lead to people delaying or avoiding treatment and care.

For Needham and Casey, it's just bad timing. They said dealing with up-front costs in the midst of an illness or health crisis added stress to an already stressful situation.

Needham, 37, who said his son Garrett had suffered through five ear infections, was told he would have to pay his $1,500 deductible on the day of the surgery in late March. He and his wife spread the amount over three credit cards.

Casey, 76, said that on the day of her procedure with an Ocala ophthalmologist, the bill came at an odd time — after she had an anesthetic placed in her eye.

"I said 'You give it to me now when my eye is dying?' "she said. "I laughed, and I gave them a $600 check."

• • •

As with many things, the trend of up-front payments can be traced partly to the economy.

Jim Schwamb, vice president for patient financial services for BayCare Health System, said that over the last several years, insurance companies and employers have moved a larger portion of the costs to the patient, either through larger co-pays or greater coinsurance.

Moving to those plans has helped employers and employees offset skyrocketing premiums. Another low-cost plan that's quickly becoming more popular is one with a high deductible, which is the amount paid out of pocket before insurance coverage kicks in.

The percentage of workers in an insurance plan with a deductible of at least $1,000 for single coverage grew from 10 percent to 18 percent over the last two years, according to a 2008 Employer Health Benefits survey conducted by the Kaiser Family Foundation and Health Research and Educational Trust.

Needham is in a high-deductible plan. The $1,500 deductible before Garrett's surgery at All-Children's Specialty Care in New Port Richey came about a month after he had to pay $1,200 for a skin cancer removal procedure for himself, and about 10 months after getting a $3,000 bill for his wife's delivery of Garrett.

"It just seems like one thing after another and you can't get caught up," said Needham, who works as a sales representative. "The last 10 months, I'm at $6,000 out of pocket, plus $650 a month to have the coverage."

• • •

The cost shift from employers to employees is expected to continue. According to the Kaiser survey, large percentages of employers report that this year they are "very or somewhat likely" to increase the amount workers contribute to premiums, the amount they pay for office visits and the amount they have to pay for prescriptions.

In response, health practitioners are putting a priority on patient collection.

"We use whatever systems we can to try to get as close to the amount the patient will be responsible for," said Schwamb. "Sometimes it's showing on their insurance card; other times, it's a little more difficult."

In some cases, technology is helping physicians figure that out. Mitch Lubitz, spokesman for Humana, said an electronic process called Real-Time Claims Adjudication can help a provider create a bill, submit a claim to the insurance company and get the claim processed in seconds, so a provider can accurately attempt to collect the amount the patient owes. Cigna is developing a "Cost of Care Estimator," which is designed to help both doctors and patients know the cost of services more quickly.

Schwamb said patients benefit when they know the charges in advance.

"We do think it's important for them to know what their liability is," he said. "They seem to appreciate that. A lot of times, they would not know unless we told them."

• • •

To be sure, the economy has made it more difficult for people to pay for care, whether up front or later.

But BayCare and other health care providers say they won't refuse service to patients if they don't pay, and will routinely work with them on payment options.

More patients are asking hospitals and other providers to put them on noninterest payment plans. Schwamb says BayCare, which operates nine not-for-profit hospitals in Hillsborough, Pinellas and Pasco counties, has gotten a little more liberal on that front, letting patients take longer to pay, in some cases two years or longer, depending on the amount owed.

Some hospitals report providing more charity care. Patients who meet certain low-income requirements can qualify for a charity write-off of their responsibility, and Schwamb said BayCare has seen an increase in patients eligible for charity care.

• • •

One concern is that cost issues could lead people to delay — or even avoid — necessary treatment and care.

A recent Kaiser Health Tracking Poll revealed that more than half of Americans say their families have cut back on medical care in the past year because of cost concerns. Many are relying on home remedies or over-the-counter drugs, others are skipping dental care or checkups, and some are skipping recommended tests or treatment.

Dr. George Kamajian runs a small urgent care and walk-in clinic in Indian Shores. His practice doesn't accept insurance, which means his prices are sometimes lower overall than other doctors. About 80 percent of the people he sees have insurance, but are looking for lower-cost alternatives.

Why? Up-front costs.

"Co-pays are high," said Kamajian. "Some have deductibles of $2,500 to $5,000."

Richard Martin can be reached at (727) 893-8330 or For the latest in health news, visit

More health care providers demanding up-front payment 04/09/09 [Last modified: Tuesday, April 14, 2009 1:41pm]
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