Health Savings Accounts: What Physicians and Staff Need to Know - PowerPoint PPT Presentation

1 / 37
About This Presentation

Health Savings Accounts: What Physicians and Staff Need to Know


Enter Consumer- Directed Care Allows some untaxed health care benefit dollars to ... and accesses it with debit card or ... health plan web portals, smart ... – PowerPoint PPT presentation

Number of Views:135
Avg rating:3.0/5.0
Slides: 38
Provided by: tma16
Learn more at:


Transcript and Presenter's Notes

Title: Health Savings Accounts: What Physicians and Staff Need to Know

  • Health Savings Accounts What Physicians and
    Staff Need to Know
  • Donna B Kinney, CPA
  • Director, Research and Data Analysis
  • Texas Medical Association

You must call in by telephone to hear the audio
portion of this webinar. The dial in number is
1-800-588-4973 and passcode is 23426524
Continuing Medical Education
  • Faculty Disclosure
  • Planners and faculty have no relevant conflicts
    of interest with any commercial interest.
  • The Illinois State Medical Society designates
    this educational activity for a maximum of 1 AMA
    PRA Category 1 CreditsTM. Physicians should only
    claim credit commensurate with the extent of
    their participation in the activity.

Continuing Medical Education
  • In order to receive the CME for this course, you
    must complete the on-line quiz at the end of this
  • You will automatically be directed to the quiz
    when you close out of the webinar.

Learning objectives for the ISMS webinar series
  • Discuss current trends in EHRs and important
    features and processes to consider prior to
    implementing an EHR system in a medical practice.
  • Identify current issues in consumer directed
    healthcare and Health Savings Accounts, and how
    they affect the physicians revenue cycle.
  • Summarize recent changes and updates to Medicaid
    billing and compliance issues.
  • Explain recent Stark Law changes and how they
    directly affect the physicians practice.
  • Discuss the importance of disaster readiness in
    the physician practice.

Go to to see the list of upcoming
  • Health Savings Accounts What Physicians and
    Staff Need to Know
  • Donna B Kinney, CPA
  • Director, Research and Data Analysis
  • Texas Medical Association

A quick look at history
  • How did we get where we are today?

The Third-Party Payer Problem
Source AMA Socioeconomic Monitoring System
Cost Increases
1982 2000
Average Physician Office Operating Cost 78,400 246,600 215
Average Fee for Established Patient 21.60 62.00 187
Note General inflation (CPI-U) increase
from 1982 to 2000 72
Cost Increases
  • Non-physician employees per physician
  • 1980 2
  • 2006 - 5

Operating Cost as a Percent of Revenue
Source MGMA Cost Survey, 2008
Cost Increases
  • Physician Cost increased due to
  • Claim processing, follow-up, appeals
  • Cost and utilization controls
  • Pre-certification, pre-authorization, referrals
  • Formularies
  • Network enrollment building, contracts,
  • More
  • Insurers the other side of all those processes

Change Possibilities?
  • Reducing administrative cost is a win-win-win
  • Physician - Reduced operating cost, improve
    profitability, reduce prices
  • Insurer - Reduced operating cost, reduced
    physician contract costs, reduce premiums
  • Patient Reduced prices, reduced premiums
  • Moving more payments to cash reduces
    administrative cost

Physician Cost/Revenue Comparison
Sources MGMA Cost Survey (medians), Centers for
Medicare Medicaid Services, Medicaid Fee
Note Cost and revenue are reported here per
Relative Value Unit a Medicare measure of the
units of service produced. One RVU is
approximately the value of the simplest office
visit for a new patient.
Enter Consumer- Directed Care
  • Allows some untaxed health care benefit dollars
    to flow from the employer to the employee WITHOUT
    going through an insurer.
  • Usually high-deductible plan paired with spending
  • Purpose
  • Allows employees to benefit from prudent spending
  • Avoids the added overhead of insurer payment for
    small expenses

Consumer-Directed Plans
  • Health Savings Accounts (HSAs)
  • Requires a High-Deductible Health Plan
  • HSA account can be funded by employer and/or
  • EMPLOYEE owns the account and accesses it with
    debit card or checkbook.
  • HSA funds available to pay for almost any health
    care expense.
  • Health Reimbursement Accounts (HRAs)
  • No insurance required, although usually used
  • EMPLOYER funds and owns the account.
  • Generally requires claim filing.
  • Payment terms and limitations imposed by plan or

High Deductibles and CD Market Growth
  • High deductibles
  • More than 20 of the commercially insured had a
    high-deductible health plan in 2008. (CDC
    National Health Interview Survey)
  • Average deductible in PPOs increased to 1000
    (from 500 in 2007). (Mercers 2008 Survey)
  • Consumer-Directed Health Plans (CDHPs)
  • Over half of companies offering account-based
    health plans in 2009. New offerings are mostly
    HSAs, not HRAs. (Towers Perrin survey)
  • CDHP premiums per employee are lower. (Mercer,
  • CDHP 6,200
  • PPO 7,800

Health Savings Account Growth
  • More than 3.2 million HSA-compatible plans in
    market by Jan 2006, 4.5 million by Jan 2007, 6.1
    million by Jan 2008 (AHIP)
  • U.S. Treasury Dept. predicts 14 million policies
    by 2010.
  • AHIP reports average balance in HSAs is 1,382
    and growing.
  • Average employer HSA contributions (Kaiser-HRET)
  • Individual 1,139
  • Family 2,067
  • AIS Health Reports 2.9 million open HSA accounts
  • over 3.9 billion dollars

Comparison of Spending Accounts
Ownership Employer Employee or Individual Employer
High-Deductible Health Plan Not required Required Not Required
Claim Filing Probably but debit card permitted Not necessary. Debit card or check book By employee or medical debit card
Comparison of Spending Accounts
Carryover Maybe, but Yes No Use it or lose it
Contribution Employer only Employer and/or Employee Employer and/or Employee
Portable No, but Yes No
Cash out No Tax plus 10 No
High Deductible Health Plans Required with HSA
Deductible Individual Family
Minimum 1,150 2,300
Maximum 5,800 11,600
For 2009. Annually adjusted.
Spending and Deductibles
  • Study at University of Michigans School of
    Public Health
  • Of health plan claimants,
  • 45 have claims from 1-999
  • 35 have claims from 1,000-4,999
  • 19 have claims from 5,000-19,000
  • 1 in excess of 20,000

Consumer-Directed Plans Issues for Physicians
  • Health Reimbursement Accounts
  • EMPLOYER (and/or their TPA) owns and controls the
    account, not the patient.
  • Often (usually?) requires claim filing.
  • Payment terms and limitations imposed by plan or
  • Information on account balances, deductibles,
    etc. is often not available to the physician
  • Health Savings Accounts (HSAs)
  • HSA account is controlled by patient, but HDHP is
    usually a PPO.
  • When HDHP is an indemnity plan, it can be
    difficult to distinguish from PPO.
  • Information on account balances, deductibles,
    etc. is often not available to the physician

PPO Contracts and CD PlansServices BELOW the
  • Patient has HSA, physician is NOT contracted
  • Patient pays at time of visit using checkbook or
    debit card.
  • No billing/collection expense
  • Physician can reduce office overhead cost and
    offer prompt pay discount.
  • Patient has HSA, physician is contracted
  • Physician submits claim, gets back EOB showing
    allowable amount, but must collect from the
  • Physician tries to collect from patient.
  • Physician overhead cost increases, collections

Note Analysis applies only to services provided
below the deductible.
Effects of CD Plan Dissemination
  • Threats -
  • Decreased collections
  • Increased administrative cost
  • Patient price sensitivity
  • Opportunities - maybe
  • Eliminate the middleman
  • Decreased administrative cost
  • Improved physician-patient relationship
  • The threats will come to you. To take advantage
    of the opportunities, you will probably have to
    change some things.

Transition Problems,Possible Solutions
  • Problem Physician unaware of patient deductible
    and/or spending account card
  • PLAN transparency contract or insurance
  • Incentives for patient disclosure like prompt-pay
  • Problem Unfunded or exhausted spending accounts
  • Improved employer/employee funding (tax
  • Medical lenders (meddirect, CareCredit, others)
  • Problem Patient share unknown until EOB received
  • Advance deposits (with administrative cost)
  • Adjustments in claim filing

Keeping Collections Up In a High-Deductible
Environment WITH Network Contracts
  • Determine patient liability at or before time of
  • Eligibility verification
  • Is deductible met?
  • What price? Does a contract apply?
  • Communicate payment terms clearly to the patient
  • Offer payment alternatives
  • When at all possible, collect at the time of the
    visit (or in advance). Or take deposits.
  • Note Step 1 is not a problem if physician is
    not contracted!

Electronic Tools to Help Determine Patient
  • Tools include Eligibility verification
    functions in clearinghouses, enhanced modules in
    some practice management systems, health plan web
    portals, smart cards, revenue cycle management
  • Vendors Athenahealth, Availity, Emdeon,
    Instamed, Metavante, nTelagent, Preferred Health
    Technology A-Claim, RealMed, others

Electronic Tools to Help Determine Patient
  • What they have in common - eligibility
    verification, using web portal or standardized
    (HIPAA) transactions.
  • How they differ
  • Functions beyond eligibility verification
  • Ease of use effect on staff workload
  • Degree to which they interface with various
    practice management systems or clearinghouses.
  • Fee structure
  • Does it increase of decrease administrative cost?

Fee Schedule Issues
  • Upward pressure
  • Contracts
  • Percent of charges
  • Lesser of contract allowable or actual charge
  • Need to offset losses on government payer
  • Downward Pressure
  • Patient price sensitivity
  • Uninsured
  • Out-of-network consumer-directed
  • Diminishing returns?

Prompt Payment Discounts
  • Align patient and physician incentives cut
    patient costs AND physician collection costs
  • Create an incentive for patient to disclose
    spending account and/or use debit card
  • Reduce or eliminate the impact on the patient of
    seeing out-of-network physicians.

Prompt-pay Discounts
  • Physician cannot discriminate against an
    insurer!! Discount is not based on who the payer
    is, but on other terms.
  • Prompt-pay discounts are based on full standard
    fee and not available if physician is bound to a
    reduced price by contract or government action.
  • May be available if physician is out of network
    or patient is uninsured.
  • Should be detailed in physicians standard
    payment policy and patients should be informed.
  • Note Practices might not want to give a discount
    if their standard fees are already low and
    collections high.

Texas Physicians Offering Prompt Payment Discounts
Source TMA 2008 Physician Survey
Implementation and Transition Problems for
  • EVERY party needs to change the way they do
    things in order to adapt to change.
  • Change does not happen overnight plan carefully
    and change in small steps.

Planning for the Future
  • Re-evaluate standard fee schedule, pricing
  • Discount policy publish
  • Cash Collections
  • Cut administrative cost and overhead
  • PPO Contracts
  • Change in value of steerage?
  • Contract prohibition on cash collections or real
    time claim adjudication negotiate?

Consumer- Directed Care Information Sources
  • Summarized regulatory information, news, links
  • HSA accounts, HDHP agent list, general info
  • Online quotes for HDHPs
  • FAQ and other guidance. Tri-fold brochure at

  • Donna B. Kinney, CPA
  • (800) 880-1300 Ext.1422
  • (512) 370-1422

Thank you for your participation
  • In order to receive CME for this activity, you
    must complete a required post-activity evaluation
    on your computer screen.
  • You will be prompted to complete this evaluation
    once you leave the webinar.
  • You will receive your CME certificate in the mail
    within 4 weeks.

Questions? Contact ISMS Division of Health Policy
Research and Advocacy at
Write a Comment
User Comments (0)