Percentage of Patients Reporting Problems Paying Bills Improves Slightly

For revenue cycle professionals seeking a little good news, the Centers for Disease Control announced just that: The percentage of American families reporting problems paying medical bills has dropped slightly, from 21.7 percent in the first half of 2011, to 20.3 percent in the first half of 2012.

While the news is encouraging, especially as this represents a trend that has been underway for three years, the data also suggests that the health insurance requirement of the Patient Protection and Affordable Care Act will be far less than a panacea for healthcare provider bad debt ratios.

On the positive side, 36.3 percent of those families reporting medical bill troubles were uninsured, and that percentage has grown since 2010. The health insurance mandate, combined with the insurance subsidies for lower-income Americans and expansion of Medicaid should shift a sizable percentage of those families out of that category. However, those with insurance, either private or public, are not immune to medical bill problems, just by a smaller percentage. Fourteen percent of those families reporting problems paying bills had private insurance, and a quarter were covered under Medicaid or similar program.

The key factor determining whether or not someone will have problems paying bills is less having insurance coverage or being covered by public programs than it is being lower income. Nearly two-thirds of those families reporting problems identified themselves as low-income (income below federal poverty levels) or near low-income (income between 100 percent and 200 percent of federal poverty levels), and of the two categories, a larger percentage of those with problems paying bills came from the latter.

As more patients are covered by health insurance or Medicaid under healthcare reform, healthcare providers should see accounts receivable decline, but based on this study and others, medical collections will continue to be a significant function within the revenue cycle.

Previously:

One in Six Americans Had Medical Debt Go to Collections, Survey Shows

Healthcare Reform in Massachusetts Fails to Reduce Medical Debt Problems

Study: 1 in 4 Women Struggle with Medical Debt

Medical Debt Burdening More than One-third of Young Adults