Once a month, doctors and staff at Edina Sports Health & Wellness stay late to talk business. Munching on take-out, they set call schedules and review patient complaints and insurance issues. Then there's the topic nobody likes: which patients to drop because they aren't paying their bills.
The clinic has been terminating an average of 16 patients a month. Most have high-deductible health plans and haven't paid their bills for more than nine months.
"For the most part, these are college-educated and middle-class folks," said Dr. Rochelle Taube, one of four doctors in the practice. "We send them a letter and say unfortunately, we're not able to care for you."
Break-up letters from doctors are just one unintended consequence in the roll-out of high-deductible plans, the fastest-growing segment of the medical insurance market as traditional plans become ever more unaffordable.
Patients opt for higher deductibles to get lower monthly premiums -- gambling that most years they won't have enough health problems to warrant coughing up thousands of deductible dollars before their insurance kicks in. But if they haven't saved enough to cover the deductible and the unexpected happens, bills can mount up and the possibility of being fired by a clinic becomes real.
Even those who aren't firing patients say they're working harder to get paid, offering more financial counseling and payment plans. Some clinics are trying novel approaches such as swiping a credit card at check-in just like at a hotel.
There are no hard data on how many patients are being dropped. Anecdotally, they seem limited to small, independent clinics without the financial cushion to absorb a lot of bad debt. But larger operations still feel the pinch when patients can't pay.
"We're now talking just as much about the underinsured as we are about the uninsured," said Larry Kryzaniak, chief financial officer at Hennepin County Medical Center.
More pressure on families
Ideally, patients who choose high-deductible plans also have a health savings account where they can squirrel away cash they save on premiums just in case they need it to cover the deductible.
But as more families grapple with high food, gas and mortgage costs, saving for future ills can be a low priority.
In 2004, there were 85,960 Minnesotans with high-deductible plans, or 2 percent of the insured. In 2007, there were 455,000, or 10 percent of insured people.
It's easy to see why insurers and employers see potential cost-savings in the plans: Doctors say these patients are much more likely to ask how much a procedure or test costs, and if it's necessary. Some put off medical services at the beginning of the year, when they're paying for care from their own pockets, then cram in elective procedures at the end of the year after their deductible has been met.
They're also taking longer to pay. Or not paying at all.
Last year, HCMC gave away $86 million in uncompensated care -- $4 million, or 4.7 percent, to insured patients. This year, HCMC expects $90 million in uncompensated care, with 8.4 percent, or $7.5 million, from insured patients.
"It's exacerbating the problem we already have," said Kryzaniak.
Fairview Health Services, Regions Hospital and HealthEast Care System also are seeing more unpaid bills from insured patients. Like HCMC, they're nonprofit, with policies not to turn patients away.
Americans spent $250 billion out of pocket on health care in 2005, and that could grow to $420 billion by 2015, according to a recent report by consulting firm McKinsey & Co. that predicts a rise in bad debt for providers unless they find a better way to collect.
Confusion and sticker shock
Minnesota clinics say some patients are clearly confused. After years of receiving bill-like notices saying "this is not a bill," they're now getting letters telling them to pay up.
Some patients are stunned when told that their accounts are about to be sent to collection agencies.
Then there's sticker shock. "Patients say, 'Oh, my God, it costs $90 for this office visit? That's incredible,'" said Dr. Michael Severson, a pediatrician at Brainerd Medical Center who says he's having the most trouble collecting money in 30 years of practice.
Severson says his clinic doesn't terminate care because rural patients have few options, plus he has to "sit across the aisle from them in church."
The companies that sell the high-deductible plans say they don't track whether patients pay their portion.
"We do think there needs to be a lot more education on how these plans work and how people can manage them and how to budget for them," said Larry Bussey, a spokesman for Medica.
Medical billing offices are working harder than ever. What used to be paid by insurance in a couple of weeks is now being stretched out to two- to six-month payment plans for patients, said Randi Tapio, chief executive of Medical Billing Professionals in St. Cloud, a firm that works with independent physician offices.
"We're sending statements every month, calling them," Tapio said. "Our costs go up."
If a patient is uninsured, a clinic can ask for payment upfront or devise an early payment plan. But with insured patients, health plans require that clinics wait until after the service and the health plan determines who owes what. By then, the patient is out the door.
"Many times, it's the same as not having insurance" in terms of a patient's likelihood of paying, said Sandy Kamin, clinic administrator at Obstetrics & Gynecology Specialists, a six-physician group with clinics in Edina and Burnsville.
If a patient makes no effort to pay for months, Kamin's clinic sends a discharge letters and turns the bill over to a collection agency. The clinic drops about 10 patients a month, two or three more than two years ago.
Recently, the clinic began asking patients having costly procedures such as surgeries to swipe a credit card upfront. An estimated amount is authorized but not charged until the health plan sends a letter saying what the patient owes.
"We're not hard core" and patients can refuse, Kamin said. The clinic soon will offer that option to all patients with high-deductible policies. Minneapolis-based mPay Gateway, which introduced the payment software last spring, said it already has 300 customers.
HealthEast clinics are looking into check-in kiosks, like those at airports, where patients insert a credit card and are asked if they want to pay their co-pay.
"The thing is to be more intentional about collecting," said Keith Rahn, who oversees HealthEast clinic billing.
'We forgive you. Goodbye'
For smaller practices, the last resort is a break-up letter.
At Edina Sports Health & Wellness, of the 16 patients who get such letters each month, a handful are first-time patients and are simply written off. The rest are repeat patients and two or three do get their bills sent to collection agencies.
The average bill going to collection is higher than ever, said clinic administrator Melanie Murgic-Rupprecht. Instead of $20 copays, there are a lot of $270 office visits, for patients with high-deductible plans.
"For the rest, we say we forgive you," said Taube, the physician. "We'll get rid of the bill you can't pay us. But we just can't see you anymore."
Chen May Yee • 612-673-7434