Did you know that a study in 2013 by the American Institute of CPAs found that more than half of Americans surveyed didn’t know the meaning of at least one of three key health insurance terms (deductible, copay, premium)? And that more than a third thought that premiums were paid directly to doctors?
Considering that health insurance is such an important part of personal finance, these results are rather shocking. But if you work in a medical practice, they’re probably not surprising, especially if you happen to be a medical biller. If you’re a biller, odds are that handling questions and misunderstandings about deductibles and other amounts billed to patients has come to occupy a significant chunk of your time.
It doesn’t seem like explaining health insurance terms should be your practice’s responsibility. Shouldn’t the vendor (i.e., the payers) take the lead in making sure the consumer knows how the product works? And what about employers who offer these products as benefits — shouldn’t they explain what their employees are receiving?
In an ideal and logical world, practices wouldn’t wind up having to explain how someone else’s product works to their patients. But, unfortunately, the fact that patients don’t understand how their financial responsibility is calculated (or even why they are being asked to pay) can have steep consequences for your practice. When patients don’t understand what they owe, they’re more likely to resist paying. The bottom line is that when patients don’t understand their financial obligations, they are less likely to meet them. Even when patients do pay, collection costs rise when payment is delayed by misunderstandings.
Even though educating patients about their payment obligations shouldn’t be your practice’s job, you must make it your practice’s job if you want to be paid more reliably. Educating patients about their financial responsibilities should start before they arrive at your door.
Working financial education into your practice workflow is more important than ever as deductibles keep rising. Learn more about the why and the how of clearing up misunderstandings about insurance in my webinar on 4/26. It’s free — hosted by Kareo. (Even if you can’t attend live, registering will allow you to view the recorded version.)