Why should hospitals and physician groups assume all the burden and risk for insurers that sell high deductible health insurance plans?
That’s the question asked by the Massachusetts Hospital Association, which for the last several years has been actively lobbying its state legislature to make the insurers who write the policies be responsible for collecting the deductible.
“Our premise has been that it’s the insurers who create the products and they need to own some of the responsibility of collecting those unpaid debts,” says Karen Granoff, senior director of managed care policy for MHA. For example, if a patient with a high-deductible plan receives treatment from a hospital, the provider would receive the full negotiated price for that service from the payor, and then the payor would be responsible for collecting whatever deductible remains under the patient’s plan.
Co-pays and other set fees, which are defined up front, would still be the responsibility of the provider to collect, Granoff says.
Like Sisyphus, the Massachusetts Hospital Association every session for the past few years has rolled out bills in the state legislature. Every year the MHA gets closer, but has yet to have the bill make it out of committee for a vote.
In the most recent legislative session, Senate Bill 418/House Bill 284 ”got further than in the past,” Granoff says. “A lot of the legislators are understanding.” Granoff says there has been no decision as yet whether to submit the bill again, but she suspects MHA will.
Insurers are, predictably, opposed to the legislation, and that opposition will only increase. In Massachusetts, the major health insurers reported sharply lower earnings, with net income dropping ranging from 49.9 percent to 93.6 percent, and two payers reporting operating losses during that period. According to the Boston Globe, insurers are feeling the pressure from consumers and businesses to keep policy prices down, and increased competition in the Commonwealth has forced the payers to hold the line.
One of the most popular ways to contain prices have been high deductible insurance plans, which were relatively rare in Massachusetts as little as five years ago, but have begun to take over the market as employers seek to cut health insurance expense and consumers seek less expensive plans.
The proposed legislation transferring the burden of collecting deductibles to the payor “would take the providers out of the middle of it,” says Granoff. High deductible plans are not only frustrating to providers, they are frustrating to patients as well, who have no simple way to know at any given time how much deductible remains on their policy for the year.
“If the provider wants money up front, the patient will say, ‘Bill the insurance first, how do I know how much I’m going to owe’; if you wait on the back end and the patient gets the bill and takes nine months to pay it, the provider is incurring the bad debt,” she says.
The ideal solution, Granoff says, would be to “electronically better know at time of service (how much a patient owes), but until we have that, it would be very helpful for the insurers to take some of that responsibility away from the provider.”