Health credit cards: Proceed with caution

Despite revenue-cycle and practice-management experts' early enthusiasm toward encouraging patients to pay for their noncovered care with healthcare credit cards--for which patients apply for right in the office, yielding practices' faster collections--experience has revealed a number of flaws in this solution.

And it's not just New York Attorney General Andrew Cuomo's current investigation in to health credit cards offered by major lenders--including GE Money, JPMorgan Chase and Citigroup--that has made such outside financing options less attractive to patients and practices. According to practice-operations expert Elizabeth Woodcock, MBA, FACMPE, CPC, of Atlanta-based consultancy Woodcock & Associates, patients' track record of defaulting on such loans has led GE's CareCredit and others to be less interested in retaining physician practices as clients. As a result, these companies "have not expanded and sometimes even retracted their business in the medical practice market," Woodcock says.

For practices more likely to refer patients to health credit cards, mostly dermatology, plastic surgery, ophthalmology and other specialties that offer noncovered procedures, it's essential to be clear with patients that they are signing up for a credit card with an outside company and not, as many patients claim they were misled to believe, a payment plan with the practice.

And although new credit card regulations that became effective last month limit the size of late fees and restrict interest rate increases on balances--another area of patient contention--the regulations continue to permit "teaser" or promotional rates, Gail Hillebrand, a senior attorney at Consumers Union, told the Washington Post.

While it's not the practices' responsibility to sit with patients and go over all of a card's terms and conditions, they should encourage their customers to read the information thoroughly before signing, says Maria K. Todd, MHA, PhD, CEO of global health provider network Mercury Healthcare.

Better yet, both experts who spoke with FiercePracticeManagement say, practices should strive to improve their systems of administering and monitoring internal payment plans for patients' large out-of-pocket costs.

To learn more:
- see this article in the Washington Post
- see this piece in American Medical News

Related Articles:
Are you willing to wheel and deal with patients?
Payment system helps practices cut down bad debt
GE's CareCredit under investigation by NY Attorney General Cuomo