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:
- The only way to get quality care is through an insurance plan and services are too expensive without insurance.
- Providers cannot charge less than Medicare for services.
- Third-Party Payers will renegotiate contracts depending on a practice’s discounted cash-pay prices.
- There is no efficient way to collect self-pay payments.
- 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.