The 5 Myths of Self-Pay

Whether you’re a patient or a health care provider, it is likely that you have heard the myths about the self-pay process.  In the past, health care providers have referred to self-pay patients as “no-payers” due to the stigma associated with them that their fees go uncollected.  Trends towards transparency in the health care system, the rise in uninsured patients and resources springing up to serve as reference points for quality, affordable care have started to clear up the myths that exist.

After speaking with a number of physicians and patients across the country, we have assimilated this list of myths, and will address each falsehood:

1. The only way to get quality care is through an insurance plan and services are too expensive without insurance.
2. Providers cannot charge less than Medicare for services.
3. Third-Party Payers will renegotiate contracts depending on a practice’s discounted cash-pay prices.
4. There is no efficient way to collect self-pay payments.
5. People without insurance are ill educated when it comes to health care pricing and quality.

1. The only way to get quality care is through an insurance plan and services are too expensive without insurance.

As long as patients know where to look, they can find highly reputable providers with affordable pricing options.  Uninsured patients can also negotiate pricing in many instances.  Keep in mind that high quality care does not necessarily translate to lack of affordability.  There is very little correlation when it comes to quality and pricing in the health care system; just because a location charges $1400 for an MRI, does not mean it is better than the facility charging $450.

2. Providers cannot charge less than Medicare for services.

There is no existing prohibition for offering a discount to uninsured or underinsured self-pay patients.  The CMS (Center for Medicare Services) has stated that discounts, when based on financial situations, are not considered kickbacks, and thus they do not violate any existing laws or regulations.

3. Third-Party Payers will renegotiate contracts depending on a practice’s discounted cash-pay prices.

Providers are expected to have “reasonable and customary” charges, which are established based on the cost of providing the service.  That amount is what is billed to all payers, including self-pay patients.  In most cases, insurance providers contract with medical offices a discount off of the charges. Often times however, the self-pay prices are simply a reflection of a practice’s Medicare Fee Schedule.  As with Medicare, providers can offer discounts based on financial situations. This should not alter the reasonable and customary charge based on costs, or the amount a payer is willing to pay by contract.

4. There is no efficient way to collect self-pay payments.

In the past, physicians rarely saw full collections on self-pay payments because of ineffective processes.  Practices spent an extraordinary amount of time and money chasing down lost payments, looking backwards instead of forwards.  Self-pay collections will improve with transparency and by collecting the payment before or at the time the procedure is performed.

5. People without insurance are ill educated when it comes to health care pricing and quality.

Gone are the days when being uninsured meant you were unprepared, unemployed or uneducated.  Employers adopting consumer-based health plans and high-deductible health plans have led Americans to realize that acquiring care on a cash-pay basis and price shopping is oftentimes more economical for their families.  This being said, 32% of patients are actively price shopping for care. We have learned that in most cases, these uninsured patients are typically the most knowledgeable of pricing, quality and the health care system as a whole.

Tags: self-pay, uninsured patients, cash pay, price shopping, self pay, no pay, high-deductible health plans, medicare fee schedule, CMS

Spreading Health Care Marketing Dollars

As Florida natives, we’re spoiled daily by the Tampa Bay sunshine and our affinity for spur of the moment fishing trips.  On a recent day on the water we were having a particularly tough time catching anything, due to the sheer amount of other fishers near our honey hole.  It was a gorgeous day, so it wasn’t hard to understand why there were so many people on the water, but it got me thinking about a conversation I’d had earlier in the week with a physician about his marketing issues.

Dr. Desperate was frustrated because he’s been spending thousands of dollars each year on advertising campaigns with little to no return on investment.  Billboards and magazine ads are great, but what are the odds of a patient needing an affordable MRI driving down the road and saying, “Why yes, I do need to go there, I’ve been waiting to see a billboard telling me where to go!” Not going to happen! That patient is going to go online and look for options.  Dr. Desperate was getting lost in the shuffle and as a result, getting no bites on his lines.  His reimbursement down and patient volume decreasing steadily, he complained, “Are there even any more patients out there?”

Imagine this analogy. Casting one line into the water will get you one fish at a time, no matter how many fish are there.  There is a reason the pros use nets when they’re bringing in the big numbers.  In recent years competition has grown as survival techniques for professional fishermen, and many areas have become overfished.  The ticket to successful fishing, and marketing too, is to find that untapped stream and use collective nets rather than weak rods. 

 

Websites like Save On Medical allow your practice to take a dip into the untapped stream of cash pay patients.  With over 50 million uninsured Americans and 25% of Americans trapped in high-deductible health plans, there is a large population (32% of patietns) of price-shopping patients.  They need options, and your practice should be one of them.

Since it’s Thursday and Thursday is the perfect day to think about your marketing impacts, let’s take some time to do some exercises to strengthen your marketing muscles. Today, ask yourself the following questions, and no cheating, you’ve got to be honest with yourself to get stronger!

-       How are you measuring the effectiveness of your marketing dollars? Are you as happy as you could be?

-       Who is really responsible for your practice’s marketing? If it’s a representative, are you only as good as they seem? If it’s your receptionist or patient coordinator, is that really a good sales tactic? If it’s you and you’re a physician, don’t you have anything better to be doing?!

-       How far does your reach stretch and are you aware of the captive patients that are falling through the cracks?

-       Do you have a cash pay pricing strategy and what are your methods for collections?

-       How do you compare to your competitors? What can you steal from them that they are doing well?

-       Perception is everything, how do your patients perceive your facility, staff, physicians, technology and patient experience?

Mutual Marketing: Affordable, Quality Health Care

As professionals in health care marketing, we know that women are decidedly the healthcare shopping authority in their families. This was made clearly evident in the uproar surrounding the Susan G. Komen and Planned Parenthood debacle, which sparked a debate wildfire in the social media and blogging world. With drastic changes in health care and the way patients shop for it, marketing professionals are forced to consider health care as a consumerism-based industry, which changes the manner in which physicians and marketing departments operate in every way.  Providers are being forced to market their services in new ways, by targeting women specifically. By tapping into social media and e-commerce, healthcare marketing professionals are able to position procedures  , MRIs and Ultrasounds, which are the most commonly price-shopped services, to highlight varied qualities such as price, quality and convenience.

A Kaiser Family Health Report sated that 80% of mothers say they are responsible for all healthcare decisions in their family and 21% of all women shop around for their best options. Women account for 57% of Internet users, and are traditionally seen as the stronger users of social media outlets.  Marketers are aware where their target market is spending its time, and they have gone directly to them. It makes sense that sites like Save On Medical would be targeting price-sensitive female patients through social media promotions like the one they are currently running where if you engage on one of their social media sites, you are entered to win full reimbursement for your procedure.

 

Save On Medical has reported drastically increased website traffic and considerable growth in users since it implemented their Female-Focused Social Media efforts.  With 75% of their users being women, they have been able to point their success to a combination of geo-targeted and demographic-specific Facebook Advertisements and tailored Pay-Per-Click Campaigns through Google AdWords.  Facebook has quickly become one of the top referring sources for traffic to their website, followed closely by Twitter.

Successful marketing professionals know that in order to find the tipping point towards their company’s success lies in truly discovering what it is that your consumer wants and needs.  Save On Medical has recognized the need for a resource where patients in need can search for and compare affordable, quality care options, due to industry trends; which point to the fact over 50 Million Americans are uninsured and 25% of Americans are in high deductible health plans, looking for ways to cut out-of-pocket costs.  Through these efforts they are able to capture an audience already in need of the value Save On Medical brings to the table and focus on the individual in the family who will ultimately make the decision on which provider they select.

Since women and mothers account for the majority of Internet, couponing and shopping population, it is important that they be well-informed shoppers and take advantage of the power they hold in the market.  As we said, the key to a successful campaign is to provide your consumer with what they need, by providing them with true value.  With genuine intent, you gain consumer trust and build a dedicated mutual relationship.  Save On Medical was built by Chris Christenberry and Matt Schneider, who have a combined 40 years of experience working in the health care industry.  As professionals in the field they have a unique opportunity of seeing things from the perspective of health care providers but are also sympathetic and understanding of the need for positive patient experiences.  They built Save On Medical to benefit the patient. It was designed to clear up the confusion that is associated with health care cost and creates a seamless user experience for anyone from the college-student user to the 70-year-old grandma user.

The genius behind what Christenberry and Schneider have done, is that while the site serves as life-saver for patients, its even almost more beneficial for the providers listed on the website.  On the backend, Save On Medical’s social media and SEO professionals have implemented methods to build the reputation of each Save On Medical provider. In addition to significant Return on Investment, useful Management Tools and limitless Cost-Saving Value-Added Services, Save On Medical abides by the teach a man to fish mantra, by providing physician users with their secret recipe, the marketing component.  By teaching the subscribed users how to market themselves on Save On Medical to their own community and referring physicians, they kill two birds with one stone, building the credibility of their own product while helping the health care provider to build patient volume.

While the goal of successful marketing campaigns is to build customer volume and brand awareness, it is important to remember what products like Save On Medical focus on; mutual needs and shared success of the consumer and the company.

The Rise of Health Care Compliance Programs

The Patient Protection and Affordable Care Act (PPACA) requires health care providers to enroll in a federally mandated health care plan and to adopt a health care compliance plan. Section 6401 of PPACA states that health care providers must establish a compliance program that contains certain core elements as a condition of enrollment. 

Compliance programs became popular in the early 1990’s when professionals in the health care industry were in need of a strategic and systematic way for companies to deal with misconduct and fraudulent activity.  The purpose of these compliance programs was to serve as a “mitigating factor in sentencing.”  Essentially, it set in place standards for health care providers to follow, so that when misconduct was detected, penalties and reductions by the government could be justified, providing a level playing field for all in the industry. The Office of the Inspector General (OIG) began to require compliance programs in investigations of Medicare fraud, which sparked the voluntary adoption of compliance programs by more health care providers.

The PPACA of course now requires most providers to adopt such plans by 2012, however the core elements of requirement have not yet been defined by regulation and will be different for each type of provider. Therefore, health care providers currently without compliance plans are working to draft and implement programs reflective of old guidelines. 

This is because fraud enforcement has increased and compliance plans will help to reduce or even avoid penalties for violations. The OIG’s Work Plan indicates a greater need for compliance in areas such as claims accuracy and provider training, suggesting these as areas of increased focus in future plan guidelines. Although the regulations haven’t yet defined the future core elements for compliance plans, previously issued materials help providers prepare for what’s next.

In the past, the following elements were typical of acceptable compliance programs:

 

• Establishment of written compliance policies and procedures and distribution to employees.
• Designation of a specific individual or individuals to monitor compliance like a compliance officer.
• Commitment to conducting formal training and education programs.
• Development of internal system for communication of suspected compliance violations.
• Commitment to auditing and monitoring to evaluate compliance and identify potential problematic areas.
• Maintenance of disciplinary policies, which are consistently enforced.
• Development of process for investigation of suspected violations and reporting to the government and law enforcement authorities when necessary.

These elements should likely be helpful to providers without compliance programs in place, to use in drafting plans for the future, allowing for practices to be proactive about changes.  This will allow practices, hospitals and care providers to communicate their culture and standards of ethics to their staff and patients in addition to the ability to provide a sense of transparency into the standards of practice operations.

High Health Care Costs & Pricing Transparency

near future. An article in the Huffington Post Business Section cited exponential increases that took place in 2011, contributing to the need to mend this deficit. With health insurance companies and Medicare paying 5.8% more for healthcare services over the past year and private insurance costs rising 7.7%, it is clear that a solution is necessary.

Pricing discrepancies on healthcare costs are completely dependent on what hospitals and providers charge, which points a finger at who is responsible for the convoluted pricing structures for care.  Patients across the country are begging for price transparency and ways to save money on their own medical costs, due to the immense amount of growth we have seen in uninsured Americans. 

                                        

Medical industry professionals aim to reduce costs as well, in hopes of cutting health care spending, as the United States spent $2.6 Trillion in 2010, which is ten times more than what was spent in 1980.  Medicare and Medicaid have implemented reimbursement cuts in order to reduce spending, however it has only pushed health care providers to raise their prices for private insurance plans and placing more fiscal responsibility on the patient’s shoulders.  This has led a large portion of American families, employers and employees to adopt the self-paying patient system, which forces the patient to shop smarter for affordable services.  The unfortunate backlash of this, is that unemployment and a downturned economy has led many of these patients in need to forgo treatment they need in favor of saving money.  Even those with employer-paid health insurance have seen increased costs.

Future plans aim to control these skyrocketing costs, however it is as imperative as ever for patients and families to take matters into their own hands, as to avoid getting lost in the intricate pricing system.  It was also recently reported that a quarter of adults (26%) experienced gaps in coverage during 2011, leaving them without insurance and monstrous costs to be responsible for, if care was needed. However, through patient education and an open dialogue with physicians, in addition to a little price shopping research to find affordable options, patients can receive the quality care they deserve, no matter their situation.