Hospitals and other medical providers are increasingly requiring patients to make prepayments before receiving non-emergency treatment. This trend marks a shift from the traditional model where patients were billed after care. These preservice charges can cover all or part of a patient's remaining deductible, or a significant percentage of the estimated cost of a visit or treatment. This practice is driven by the fact that rising deductibles mean patients owe more for care, and hospitals anticipate difficulties in collecting these amounts.
Medical providers are collecting a larger share of what patients owe upfront, with the average deductible in employer-sponsored family coverage around $3,762 per person, and Affordable Care Act plan deductibles jumping 37% to a similar amount of $3,786 this year. For example, hospitals now collect approximately 25% of what they expect patients to owe, up from about 15% previously. For a $1,000 imaging scan, a hospital might now seek $250 upfront from the patient.
This "double whammy" for patients means they are essentially being asked to "self-insure," according to Richard Gundling of the Healthcare Financial Management Association. Institutions like Johns Hopkins Medicine and MD Anderson in Houston explicitly state policies requiring upfront payments for non-emergency care. Despite these increased upfront collections, hospitals' overall uncollected debt is also rising, attributed to a "fundamental shift" in insurance coverage with higher deductibles and more complex cost-sharing structures, which increase patient responsibility but decrease collection probability.
While there is one clear rule that prohibits hospitals accepting federal Medicare financing from demanding upfront payment for emergency stabilization, prepayments for non-emergency care are becoming more common. This trend contributes to patient frustration with escalating healthcare costs, including premiums, copays, and deductibles. Overpayments can occur if estimated services are not fully rendered or if other providers' bills, such as anesthesiology or surgeon fees, count towards the deductible, potentially leaving patients overpaying the hospital. The process for refunding overpayments varies by state, with some, like Florida, requiring reimbursement within 30 days.
