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Health Insurance Plans. Are doctors better off just taking cash?

Dec 6th, 2013

Pertaining to health insurance plans on the New york state of health  exchange, “we remain concerned that New York’s Exchange is being implemented in a manner that enables health insurers to essentially run roughshod over the patients and the physicians who will be delivering their medical care.”

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Credit: bfishadow via Flickr under Creative Commons.

The quote above is from a letter sent this week from the Medical Society of the State of New York (MSSNY) to Donna Frescatore, executive director of the New York State health insurance exchange, also known as a New York State of Health. The four page letter written by MSSNY’s President Sam Unterricht outlines several major issues with the exchange  health insurance plans offering that his group is concerned about. Some of those issues we’ve already touched on in this blog like smaller networks of providers for exchange plans, and those plans’ low reimbursement rates for doctors.

A telling statistic cited by Unterricht in the letter is a survey about exchange plan participation among MSSNY members. The results are still being tabulated, but at the time of this writing the percentage of respondents indicating they will not be participating in any Health insurance exchange plan was around 40 percent. Another entire third of respondents said they had no idea whether or not they were participating in a health insurance exchange plan because of contact issues and vagaries.

Within the letter Unterricht reiterates that the MSSNY is committed to improving New York’s health care system through the Affordable Care Act. However he is very concerned that if these problems are not resolved a two-tiered health care will come into being.

Worried about deductibles

Aside from low reimbursements and small networks, the letter also raises concerns about doctors’ ability to actually get paid for the services they provide. One concern is that many of the exchange plans have very high deductibles.

The concern about these deductibles that Unterricht points to is that many of these newly insured people have limited incomes, and could be unfamiliar with how the system works. Meaning that when they later get their bill, especially if it is for a large amount, that it might not be paid promptly or even at all, requiring significant effort on the part of the office to get payment.

As a solution, in the letter Unterricht suggests that private practices become empowered to collect payment in the form of cash and credit cards at the time the medical service is rendered.  He also suggests to have deductible information clearly displayed on each patient’s health insurance card.

Grace Period

Unterricht and MSSNY also have concerns about a regulation contained within the Affordable Care Act that gives delinquent patients a 90 day grace period when they miss a health insurance payment. So  if a person misses one month’s payment they’re not automatically dropped from their insurance. While the grace period idea is a fantastic consumer protection, it could have a negative effect for doctors.

During that grace period a consumer still shows up in the system as being insured, meaning they can schedule appointments and receive care. But health insurance companies will likely refuse to pay for delinquent patients until they’re caught up on their payments. You can only imagine the kind of havoc this policy could cause. In this scenario the doctor’s office is left holding the bag for serviced provided, but without payment.

Unterricht urges Frescatore to work with his organization and insurers to reform this policy by implementing a system where practices will be able to easily identify those patients who are in this grace period. Then doctors can decide whether to see them or not, or have them leave a deposit for their visit that they’ll get back once the doctor is reimbursed.

Cash only!

Doctors are concerned and we should be listening. The ACA has done a lot to appease health insurance companies, but it seems to forget that health insurance plans cannot exist without doctors. Might doctors just be better off going cash only and abandoning traditional health insurance altogether?

These issues that Unterricht discusses are serious and we can only hope that the state takes them seriously. If they are not addressed there’s no doubt New York State will quickly wind up with a two tiered health insurance system. One level for those who can afford to shop off the exchange, where more doctors and hospitals are available, and one for those who cannot, where there is a shortage of in network doctors and the waiting rooms are always crowded.

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