As high deductible health plans, coinsurance and tiers of copayments become more prevalent in the health care world, collecting money from both patients and payers becomes more complex for providers. The 2012 Trends in Healthcare Payments annual report from InstaMed contains interesting information on the payment process. (InstaMed Report) Payment processes have become more important to providers because patient bad debt, estimated at about $65 billion in 2010, is obviously quite serious and the administrative costs of trying to collect frequently eat up a big chunk of whatever is eventually paid. According to InstaMed, patients are continuing to be responsible for an increasing fraction of overall billed charges, and payers are reimbursing an astonishingly low 20% of billed charges, the bulk of the difference being accounted for by greatly inflated nominal prices on the part of providers, but patients are now responsible for an average of over 20% of allowed charges. Payers are mandated to support electronic bill submission and payment in 2014 and most have the capability already. Providers are less prepared for an all electronic process, but in 2012 over 50% of payer payments were made by electronic funds transfer. Providers are trying to encourage patients to make payments at the time of service, with deductibles and coinsurance, it is often hard to figure out the patient amount owed. Providers are also trying to get patients to pay online and these payments accounted for about 12% of all payments in 2012. Overall, 80% of patients take more than one month to pay their bills. Overall the report gives a good sense of the complexity of payment processes.
