High-deductible insurance plans and health savings accounts have changed the business of health care, making physician practices settle medical bills upfront and requiring consumers to pay more out of their pockets. In the past, insurance companies were the primary revenue source for accounts receivable in medical practices, and patients relied on them to pay most of their health care bills.

“This is a steep economic swing in the pendulum. We went from patients not owing anything to them owing a significant portion of the bill,” explains Terri Fischer, a health care manager with LarsonAllen. “But I do believe it will swing back toward the middle. We just need to make sure we proactively address these changes as they occur.”

Earlier this year, LarsonAllen and Gateway EDI conducted an extensive review of medical billing practices. The movement toward CDHC and its impact on revenue cycles was a trend observed during the Physician Revenue Cycle Gold Standard Study, and LarsonAllen has decided it’s a topic worth delving into.

How physician practices are being impacted by CDHC
This economic shift has caused medical practices to be more proactive in collecting a patient’s portion of the visit at the time the service is rendered. New tools and technology have been a tremendous help in addressing these changes. Practices have put processes into place to check a patients’ insurance coverage and deductibles at the office, enabling them to collect up front.

How patients are being impacted by CDHC
On the consumer end, CDHC appears to be causing patients to make tough choices about the seriousness of their medical problems. Now they must choose whether or not to seek medical treatment based on their financial status. This added financial responsibility may cause patients to avoid seeking medical care and/or cause patients to place more calls to the physician’s office instead to avoid a charge. Ultimately, this trend is causing a shift in revenue for medical practices, dramatically increasing the patient responsibility portion of their accounts receivable.

What practices can do to adapt to CDHC
Medical practices should be diligent toward their accounts receivable. “It’s important to manage and monitor your accounts receivable and not let it manage itself,” Fischer says. "In order to do this, practices need to have the right people doing the right jobs."

In addition, practices need to be more conscientious in dealing with their patients—act as patient advocates and help people navigate the reimbursement from their insurance companies. As a result, patients will be grateful for the personal attention, Fischer says.

The study showed that the most successful practices have added more resources in the front office, such as technology to check a patient’s insurance benefits and eligibility before the patient is seen.

How we can help
We can help your practice meet the challenges presented by these changes in the study by applying the principles and processes found in the best practices. For more information, contact Terri Fischer, health care manager with LarsonAllen, or view the Physician Revenue Cycle Gold Standard Study.