Some hospitals are now billing patients in advance

For years, hospitals and surgery centers would only bill patients after they had already performed medical procedures. However, this meant that they often ended up having to chase patients for payments, leading to sending repeated invoices and involving debt collectors.

According to hospitals, having to chase after unpaid medical bills is both challenging and costly. For example, an analysis from Kodiak Solutions, a healthcare consulting and software company, found that around half of the debt written off by hospitals last year was from patients with insurance.

Now, some hospitals are asking patients for advance payment when it comes to nonemergency procedures. Some of the procedures hospitals and surgery centers are asking patients to pay for in advance include knee replacements, CT scans, and births.

"We need those patients who are able to pay to do so," said Leslie Taylor, a spokesperson for the University of Arkansas for Medical Sciences, which owns one general hospital in Arkansas. After discussing cases with doctors, the hospital will reschedule certain procedures until patients can pay.

Currently, around 23% of what patients owe is collected by hospitals before their treatments, a Kodiak analysis of Q1 2024 data from 1,850 people found. This is an increase from the same period in 2022, where 20% of what patients owed was collected before treatment.

According to hospitals, knowing the costs of services ahead of time can provide patients with an opportunity to comparison shop and avoid facing a large, unexpected bill. In recent years, Congress and regulators have also pushed hospitals to be more transparent about their prices, which can vary significantly, and limit surprise medical bills.

Advance payment can be difficult for some patients

However, finding money for medical treatment can be difficult for many American households, Evans writes. According to a KFF survey, half of adults said that they can't afford to spend more than $500 on medical care if they suddenly become sick or injured.

It can also be difficult to accurately determine how much a patient owes for a particular treatment. The cost of a treatment can depend on a patient's health plan, its deductible or other out-of-pocket costs, and the prices plans have negotiated with hospitals.  

Because of these varying prices, patients may later find out that they were overcharged for treatment and then have to fight for refunds.

For example, Blake Young, a 59-year-old industrial machinery salesman from Tennessee, said he was overcharged by around $2,500 for a heart screening he received last November. Young was initially charged $3,600 for the screening, which he paid upfront with funds from his health savings account, but when he arrived at the hospital for the testing, he received a new bill with a lower price.

Later, Young had to follow up with the hospital for several months before he received a refund check. "It's not unlimited funds," Young said. "They do run out."

For patients who may be concerned about paying for treatments in advance, Evans offered three tips:

• Don't assume that you're required to pay for a treatment immediately even if a hospital asks for advance payment. Hospitals may not initially offer a way to pay later, so be sure to ask about your options.
• If you can't afford a treatment, let the hospital know. You can also ask about no-interest payment plans, discounts, or financial aid.
• Financial aid, or charity care, programs can be complicated, but resources, such as the nonprofit Dollar For, can help patients with applications.

(Evans, Wall Street Journal, 5/9)

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