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Analysis

Should You take the Pre-Service Payment Requirement Plunge?

By Alexandra Wilson Pecci  
   August 09, 2019

Piedmont has a new 25% advance payment policy for some patients, but health systems are still skittish about pre-service payment requirements.

Piedmont Healthcare made a ripple in the revenue cycle world earlier this summer when it announced a new policy requiring some patients to pay 25% of their bill upfront, ahead of service.

The policy, which went into effect on June 1, has a lot of nuance, not to mention room for exceptions and ongoing refinement, says Piedmont's vice president of revenue cycle Brian Unell.

He also notes that other facilities have similar requirements but haven't publicized them.

Doing so makes many providers nervous, says Jonathan Wiik, principal of healthcare strategy at TransUnion Healthcare.

"Hospitals are hesitant to communicate payment expectation ultimatums prior to care as it may scare a patient into assuming care won't be provided if payment is not made," Wiik told HealthLeaders via email.

They worry that patients "may skip appointments, defer care, or avoid the provider altogether."

"For most hospitals, it's preferable to handle payment discussions with each encounter. This is because most patients may only interact with the provider a few times per year," Wiik says.

Unell says Piedmont's latest policy is the third phase of a larger, multiyear front-end revamp, which has included price transparency and patient-centered scheduling, the latter of which increased point-of-service collections 19% last fiscal year and ~500% over the last six years.

Specifically, the 25% requirement applies to "patients seeking non-emergent and/or non-urgent services where 100% of the expected reimbursement is expected to come from the patient (based on our estimate and where applicable information from the insurance company around expected reimbursement and the patient's plan's co-pays, deductibles, and co-insurance)," Unell says.

In addition, Unell says Piedmont is "still in the learning phase and making adjustments to meet our patients' and business needs."

He also points out that patients aren't required to pay the full sticker price for services in any circumstance.

"Patients who do not have third-party coverage are provided a 70% discount from our charges and the 25% requirement is based on the reduced amount after discount," Unell says.

There is also plenty of room for exceptions, if needed.

"There is an escalation process local to each facility for all patients," Unell says. "Additionally, we have refined the policy to exclude a handful of services from the requirements and are continually getting feedback from and working with our hospital leadership and physician community to make the best decisions for our patients and Piedmont Healthcare."

Unell declined to describe which services were excluded, saying they could vary by hospital.

The bottom line? If providers do choose to require upfront payments from patients, they must do so carefully.

"A policy of down payment ensures consistency and can drive collections, but it must be delivered elegantly to meet the patient as payer," Wiik says. "Cost is one of the main reasons patients defer their care, so they need to be engaged early and presented options, not ultimatums."

Alexandra Wilson Pecci is an editor for HealthLeaders.


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