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Savings accounts may increase hospital bad debt

Case Management Weekly, March 9, 2004

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Savings accounts may increase hospital bad debt

Hospital officials are bracing for more bad debt if health savings accounts from the Medicare Modernization Act catch on. Copay collection and financial counseling will become critical, as will marketing services, one health-system executive told Medicare Reform Advisor. "They'll become significant as a health benefit," Federation of American Hospitals President Charles Kahn said in a speech February 26 to pharmaceutical executives in Washington, DC. "Even if there's zero in the account balance, [hospitals] still have to treat the patient due to the [Emergency Medical Treatment and Labor Act], and there may be contractual arrangements with payers requiring treatment as well." Some patients won't be able to afford the high deductibles and the expensive hospital treatments, Kahn said. The accounts, part of section 1201 of the reform bill, are already gaining momentum. Insurers are poised, too. Several plan to release high deductible medical plans through employers and sell directly to individuals.

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