Healthcare Regulation

Is Your Patient Payment Targeting Legal?

Post by
Justin Nicols

Offering patient payment plans? Patient financing? Deferrals on healthcare bills? If so, it’s more important than ever to understand how your patient segmentation approach.

The introduction of high-deductible health insurance plans (HDHP) in 2004 has led to a dramatic increase in self-pay after insurance patients. As the cost of health care continues to grow, HDHP adoption also continues to grow -- cost-shifting medical care to patients. Patient financial responsibility after insurance increased by 88% between 2012 and 2017.

Healthcare providers have to work with patients in new ways to get paid. It has become standard to offer payment plans, payment deferrals and provide financing options. This shift has healthcare providers acting as financial institutions.

For healthcare providers, there's a considerable upside to offering these options to patients -- customer satisfaction, more efficient payments and less reliance on collections. However, what comes along with the upside is the regulatory burden of acting as a lender. As patient payment responsibility grows, healthcare providers will continue to respond as lenders. This is already driving regulatory oversight which brings costly penalties for non-compliance.

The key regulation that applies to any lender is the Equal Credit Opportunity Act (ECOA). Under ECOA's Regulation B, it is unlawful for creditors to make lending decisions based on:

  • Race or color
  • National origin
  • Sex
  • Religion
  • Age
  • Status within public assistance programs (including Medicare and Medicaid)

ECOA applies to providers as they provision payment plans and offer financing terms. Providers cannot use standard segmentation data (birth date, zip code, sex) in payment decisions. This makes it much harder to act on propensity to pay scores and patient profile information.

The challenge is obtaining and integrating meaningful data that is compliant with ECOA. The best course of action is to bake regulatory compliance into targeting. This is where Sift offers a unique advantage. Sift's patient payment models provide advanced safe harbor segmentation. Our analytics offer in-depth targeting that takes into account current and anticipated regulation. Our models allow you to dynamically offer the best payment plan to individual patients without violating ECOA.

Being able to target patients for payment is essential, especially with the rise of self-pay after insurance payments. Being able to identify who needs payment plans, what they need and how to best contact them, makes targeting immensely more powerful. And being certain that targeting is ethical and compliant provides peace of mind and the best path towards long term ROI.

Learn more about Sift Healthcare's unique Propensity To Pay models and check out our free eBook on a new model for Patient Payments.

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