Mnet Health News delivers the latest news and information articles for the world of healthcare.

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David Brooks

David Brooks

Patient Credit Scores Get Grace Period Following Healthcare Services.

For many, an unexpected healthcare crisis can quickly lead to a financial crisis.  Surveys show that slightly more than half of all debt showing up on American’s credit reports are related to expenses from the medical industry.  Sadly, this can quickly lead to a less-than-satisfactory credit report.  However, changes in credit agency evaluation and reporting of medical debt are currently in process and are designed to reduce the pain from financial consequences associated with the rise of a healthcare issue.

The three major credit reporting agencies, Equifax, TransUnion, and Experian, will begin setting a 180-waiting period on medical debt before including it on a patient’s credit report starting on September 15th.  The rationale behind this is to give a 6-month period of time to patients to give them the opportunity to resolve and delay in payment from insurers as well as resolving any disputes that might arise between patient and insurer.

Additionally, the three credit bureaus are set to begin removing medical debt from the credit reports of patients as soon as the debt has finally been resolved by a medical insurer; although some models do not currently penalize the consumer for medical debt.

The need for change was spurred on by states working to bring aid to consumers.  The first was a settlement in 2015 that was negotiated by the Attorney General of New York, Eric Schneiderman.  Schneiderman and the three credit reporting agencies came to an agreement and the changes agreed upon will be enacted nationwide.  Currently, most hospitals, ASC’s, and medical providers choose to hire collection vendors to handle accounts once they have become 30-60 days past due.  

A 2014 report from the Consumer Financial Protection Bureau (CFPB) showed that forty-three million Americans had medical debt in collections that was adversely affecting their credit reports.  A noteworthy finding was that the average amount of medical debt in collections was a mere $579.00 as opposed to the typical $1000.00 dinging the credit reports of those with non-medical debt.  Even more noteworthy is the fact that for 15 million of those with blemishes to their credit, medical debt was the only issue for them.

In the era of high deductible health plans (HDHP) which carry an extremely high financial responsibility for the policyholder; it might not be too difficult to understand how this situation has occurred.  It’s clear that many who would previously have had good credit are now faced with a large self-pay portion for health services which can be daunting.

While credit reports are designed to demonstrate the likelihood of a consumer paying debt that he or she has accrued; some credit scoring companies such as VantageScore & FICO have adjusted their models to account for medical debt because they do not believe it is an accurate predictor of whether or not a consumer is a good credit risk.  In fact, FICO has stated that consumers with medical accounts are typically less inclined to default on their accounts than those with non-medical accounts.

Both FICO and VantageScore are now updating their models to differentiate between debt that is medical and that which is non-medical.  Those who have medical debt in collections will now receive a smaller penalty than those with non-medical collections; a change that can make a big difference in the lives of American consumers.  So far, however, the one caveat is that many lenders and banks have not yet adapted to this new credit-scoring methodology.  Because of this, even though medical debt should not be impacting consumer credit as much; for many nothing has changed yet.

 

Repeal of Obamacare Likely to Grow Number of Self-Pay Patients 

While Congress moves forward in their effort to repeal the Affordable Care Act (ACA), a new report points out that the changes anticipated appear to point to an increase in the number of self-pay patients; meaning less revenue for medical providers historically.  This analysis has been provided by accounting and consulting firm Crowe Horwath.  The report, “Self-Pay Becomes Ground Zero for Hospital Margins: Lower Net Revenue Realization Impact Follows,” used data taken from their revenue cycle analytics platform.  The report made use of the analysis of a sampling of 357 hospitals in states where Medicaid had expanded.

Hospitals in states that had expanded their Medicaid coverage between 2013 and 2016 witnessed their number of patients who were covered by Medicaid increase from 12.3 percent to 18.3 percent during that time.  During that same time, patient self-pay dropped from 7.4 in 2013 to 3.5 in 2016; a drop of 4 percent.  Crowe Horwath is now pointing out that with so much uncertainty in healthcare, that medical providers should prepare for growth in self-pay patients.

Medical provider cash flow is likely to be adversely affected, according to the report, as the average self-pay patient remains in the AR cycle for about 96 days whereas those with Medicaid balances typically only do so for about 64 days.  Not to mention the current trend of insureds moving to high-deductible health plans, an insurance model with a mix of self-pay and insurance coverage, is set to continue growing.  The Crowe Horwath analysis plainly states that the combination of growth in HDHP insurance policies added to a full repeal of the ACA will cause an increase in self-pay patients of 4.2 percent.  The report also points out that this situation will decrease revenue by 2.8 percent.

Crowe Horwath recommends several common-sense practices for providers in dealing with self-pay.  One thing that can be very helpful is to make use of tools that determine a patient’s capabilities for paying.  Another good practice is to create positive interactions pertaining to the financial portion of patient experience.  It is also valuable to train attention on those patients who have the ability to pay for their out-of-pocket expenses.  Providing multiple payment options, affordable payment plans, discounts and even help with Medicaid enrollment forms will all be beneficial.

Lastly, giving patients the advantage of price transparency and the opportunity to shop around and even the ability to negotiate prices will all help providers weather the storm on the horizon that’s been created by the rise of HDHP’s combined with the effects of the likely ACA repeal.

National Poll Shows Healthcare Costs Top Financial Concerns

 

While Americans always seem to have something to be concerned about; a new national poll from Gallup shows that Americans are most concerned today with healthcare costs when considering ALL financial concerns for those living in the United States.  The poll further went on to show that a majority of those living in America believe that the Federal government should also make it possible for all Americans to have healthcare coverage.

Two other polls that were recently published also point out that most citizens of the United States are concerned about healthcare coverage for themselves and their families.  In fact, a growing number of poll respondents now appear to be favoring a single-payer healthcare system.

Gallup points out that some of the anxiety around the topic of healthcare could be due to all of the uncertainty regarding the current healthcare policy and the effort to repeal and replace the law.  In 2010, healthcare concerns spiked as the ACA was being signed into law and many Americans made clear that the costs of healthcare were their top concern.

While healthcare costs were the top anxiety for Americans at 19 percent, other financial concerns cited by those who responded to the poll included high debt at 11 percent, college expenses at 10 percent and lack of money at 10 percent.

One bright spot worth noting is that some financial anxieties have lessened in recent years.  While 10% of respondents say low wages are their families biggest financial problem; this percentage is the lowest number seen since before the financial crisis of 2008 began.

 

Americans Worry Over Healthcare Uncertainty

Anxious Woman Worries About Healthcare

As the debate continues on Capitol Hill about the future of healthcare in the United States, the issue is also on the minds of many Americans as well.  Whether Obamacare continues to move forward in one form or another or is replaced by something completely different, a majority of Americans are now concerned about their ability to afford health insurance in the future.

A new study from Bankrate.com shows that in the last year, one out of four families have chosen not to make use of medical professionals because they felt they couldn’t afford the expense even though they believed they needed it.  The fact that Americans are choosing not to get medical advice due to the cost is of great concern.  Bankrate.com also pointed out that 13 percent of those responding to their survey didn’t have any healthcare insurance at all; which is quite a risk when considering that medical bills have the capability of leading to large debt that could take many years to pay off.

The Bankrate.com survey showed that a full 56% of Americans say that they are concerned that they might not have the option of affordable healthcare in the years to come.  This anxiety has led some to worry that they might be faced with the painful choice to not care for medical issues of a serious nature due to an inability to pay for their services.  In the meantime, as the healthcare debate continues; American anxiety continues to grow.

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