HFMA 2017: 2 out of 3 patients don’t pay their hospitals bills in full

More than two-thirds of patients (68 percent)  with hospital bills under $500 didn’t pay the full balance by the end of 2016, according a TransUnion Health study released at the Healthcare Financial Management Association (HFMA) conference in Orlando.

It’s a sizeable increase from the prior two years. In 2014, 49 percent of patients didn’t pay off the full balance of sub-$500 bills, rising to 53 percent in 2015. For larger bills, fewer patients are making even partial payments: 77 percent made partial payments on hospital bills of $3,000 or more, down from 90 percent in 2015. What’s to blame, according to the study, is the greater prevalence of high deductible health plans and an increase from 10 to 30 percent in “patient responsibility.”

“This shift in healthcare payments has been taking place for well over a decade, but we are seeing more pronounced changes in how hospital bills are paid during just the last few years.” said Jonathan Wiik, principal for healthcare revenue cycle management at TransUnion.

Wiik added that while it’s true uncompensated care has declined since the enactment of the Affordable Care Act, the drop is mostly thanks to increased insured rates through Medicaid or commercial insurance. As deductibles keep rising, more and more patients will have trouble paying. By 2020, the study predicts more than 95 percent of patients won’t be paying their hospital bills in full.

1. would in turn cause an increase in uncompensated care costs being written off as charity care or bad debt. Despite the growth in insured rates, hospitals still wrote off $35.7 billion in 2015. By 2020, that number will likely rise, Wiik said, unless hospitals start changing their collections practices now.

“Profitability of the hospital will be detrimentally impacted if payments and financing options aren’t discussed with patients in advance,” he said to HealthExec.