(4 min read) When a patient checks in to see a new healthcare provider, there is the inevitable package of new patient paperwork. Along with the patient health history forms and HIPPA disclosures, there may also be a financial policy. Patients may not remember signing it, let alone reading the details, which include consenting to a credit report.
The Fair Credit Reporting Act (FCRA) provides the authorization for businesses, including healthcare providers, to access consumer credit data when the organization has a legitimate business need. This is something most patients know nothing about.
So, when a credit check related to healthcare services appears, it is often an unwelcome surprise for patients. They see it as a breach of trust, as well as a violation of their privacy rights. Patients reach this conclusion because they have not been educated on the purpose of healthcare credit checks or about the advantages for them, as well as for the healthcare provider. Lack of understanding leads patients to fear that they will be denied treatment if they have poor credit or that their credit score will be negatively impacted by a medical credit check, neither of which is true.
Benefits for Providers
Today, healthcare providers typically access patient credit data when a patient has a past due balance and the provider wants to assess a patient’s ability and propensity to pay. Credit data helps providers make decisions, such as when to write off a balance, when to try and collect via in-house resources, and when to turn the balance due over to a collection agency.
Patient credit data can also inform objective determinations about charitable assistance eligibility. Using patient credit data within a process governed by decision logic or business rules prevents healthcare providers from inadvertently discriminating against patients who may qualify for charitable discounts or other financial assistance. From a compliance perspective, a transparent, rules-based process is imperative.
Some healthcare providers are shifting their approach and are having financial conversations with patients early in the encounter. The self-pay, high deductible trend shows no sign of reversing, and more patients are shouldering significant financial responsibility. It behooves both providers and patients to understand up front what is covered by insurance, how much will be paid out of pocket, and what payment arrangements can be made.
Finally, analyzing patients’ credit profiles helps protect providers from fraudulent claims. Unfortunately, some unscrupulous patients try to qualify for charitable programs when they have the resources to pay for the treatment. Fraud prevention is important for compliance, and it also preserves available charitable assistance funds for patients who have legitimate need.
Benefits for Patients
Considering patient credit prior to initiating a healthcare service or hospital discharge helps both providers and patients determine the best financial arrangement for each circumstance. Credit checks for healthcare are “soft checks;” that is, they do not affect the patient’s credit score as a “hard check” for a loan or credit card does. Providers do not want to send patients to collections. They want to find a payment solution that is affordable and works for the patient. Understanding the patient financially, up front, enables providers to check eligibility for Medicaid, charitable assistance, and payment plans that ultimately reduce the patient’s financial responsibility. It also preempts the nuisance of receiving multiple statements for a bill that is beyond the patient’s means and/or calls and letters from collection agencies.
Society at large is demanding more transparency in healthcare pricing. Providing visibility into the true out-of-pocket costs helps patients navigate payment options before consenting to treatment. Predictability and peace of mind related to their financial responsibility strengthens the provider-patient relationship and increases the likelihood that patients will pay their portion of the bill.
Healthcare providers must earn and maintain each patient’s trust. Educating patients about the healthcare credit checks and how they benefit patients before pulling the report makes the patient an active participant in the process and demonstrates goodwill. As our industry transitions toward a patient-as-customer business model, transparency and affordability will be keys to assuring patients that providers have their best interests in mind, both clinically and financially.