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Editor's Page
Will Pay-in-Advance Policy for Surgery Add Up?
Dan O'Connor
Publish Date: December 1, 2008

Before a patient can schedule elective surgery at Carle Clinic in Urbana, Ill., he must whip out his checkbook, credit card or billfold and make a down payment that will be applied to his co-insurance obligation, that 10 percent to 20 percent of uncovered charges that the 320-physician group practice was more often writing off than collecting.

The size of the deposit depends on a patient's insurance status — $500 for patients covered by a single payor, $250 for Medicare patients and half of the expected cost of the procedure for self-insured patients. The policy excludes obstetrics and gynecology procedures. HMO patients and those who have primary and secondary insurance are also exempted from the surgery deposit policy. Carle Clinic began testing the policy last month at one of its joint-ventured surgical centers that was knee deep in bad debt that officials say was in the hundreds of thousands of dollars.

"This is a way to better educate our patients about their financial responsibilities instead of surprising them with a bill after the fact, but I'd be lying if I said we didn't look at economics," says Carla Kurtz, RN, MHA, Carle Clinic's director of surgery services. "We carry a lot of debt for our patients."

As you might expect, reviews have been mixed. "Some patients have been unhappy," says Mark Berlin, Carle Clinic's vice president of surgical services. "A few chose not to go forward and schedule surgery."

Critics say the pay-in-advance policy puts money over medicine, a mindset that could turn today's elective procedure into tomorrow's emergency surgery.

We're not sure whether to cheer or chastise pay-in-advance policies for all non-emergency surgeries.

On the one hand, trying to collect out-of-pocket expenses from patients in this slumping economy after they're all stitched up is a race many times not worth running. As Ms. Kurtz points out, many patients don't read their insurance policies. "They think they're covered for everything when indeed they're not," she says. Mr. Berlin notes that as consumer-driven health care becomes more prevalent, insurers are shifting patients into higher-deductible plans, meaning that if you're contracted with a payor that reimburses you 80 percent of billed charges, you might be out 20 cents on the dollar.

On the other hand, requiring patients to make a surgery deposit to schedule their elective procedures could be a PR powder keg and a barrier to care, especially for the uninsured. And how do you reprogram patients who are used to walking in and out of your facility, secure in the belief that their insurance will take care of everything? Sounds like a great article idea.