How to Solve the Hidden Problem with High Deductible Insurance Plans

Thanks to scammy insurance brokers and confusing marketplaces, patients are almost always unaware of what their full healthcare costs are. 

After over 1000 awkward conversations with patients about money I have learned the key to success in getting them to understand is to be empathetic, firm and fair.


Patient: “How much? But I have insurance?”

Me: “I understand, and I am sorry for the confusion, but you see that your insurance covers a portion of your fees and the other portion goes to “patient responsibility”

Patient: “I thought my copay was my patient responsibility…and the $5000 per year I pay in premiums. ”

Me: “Actually it includes your co payment, a deductible and a co-insurance. You chose a health plan with a $4800 deductible and an 80/20 co-insurance.”

Patient: “Seriously? I didn’t bring a checkbook or any cash?”

Me: “Even though your insurance indicates that we should collect $275 from you today, I am willing to collect half of that because we understand how expensive all your medical costs are.“

Me:I am happy to break up the balance into a few smaller payments for the next 3 months. That way you won’t get any unexpected bills after you leave and we don’t have to reschedule your appointment.”

Patient: “Ok, I guess that works”

Me: “Great, How would you like to take care of that today?…”

Whether you’re starting a new practice, getting your Patient A/R under control, or trying to improve cash flow, you’ll learn the tactics to

  1. Help your patients pay their high deductibles upfront, and
  2. Stay loyal to your practice while doing it.

Patients are simply unprepared to make high deductible payments upfront and this is how they react

The high deductible health plans from the insurance exchanges and insurance companies cost cutting is really hitting the patients hard. So many of them get lost in the confusion and then just can’t pay.

Patients are starting to learn how to “work the system”:

  1. They stop seeing their Primary Care Doctors and start Urgent Care hoping to avoid paying their super high deductibles.
  2. They avoid seeing the doctor at all and wait until it’s an emergency.
  3. They seek out naive offices who are willing to bill them later.

Knowing your practice revenue numbers makes it easier to be firm when collecting upfront

  • On average you will only make about $75 for each office visit after all overhead costs if everything goes perfectly (which is rare).
  • 1/3 of that visit payment comes straight out of the patient’s pocket.

So if they can’t or won’t pay, then you end up working for free and then having to chase more patients with shorter visit times to make up for the loss.

It is worth it to do everything you can to collect against those high deductibles upfront. Otherwise you face the endless frustration of:

  1. fighting with insurance companies over claim denials
  2. the high cost of sending multiple billing statements to patients for balances that don’t get paid
  3. spending high percentage premiums on outside collection agencies that collect pennies on the dollar

Not collecting deductibles hurts you and your patients



When your patients delay necessary or preventive medical care, they end up in hospitals’ emergency rooms.

When faced with paying more than their co-pay for a visit, a patient may threaten to go somewhere or plead to be billed later.

This creates a hard situation that most front office staff are not trained to handle. Then you end up hoping it will get paid later. In reality you know that these balances are going to collections or getting written off.

This just leaves you squeezing in more patients to make up for it.

Shorter visit times and frustrated rushed patients, overworked staff, and mountains of busywork for each claim.

Let’s look at the increasing factors causing this …

  • The average patient deductible has increased 47% from 2009.
  • The average bronze plan deductible for medical care and prescriptions was $5,765 for plans on the federal exchanges.
  • 37% of patients said that a lack of payment options was the reason they didn’t pay healthcare bills

Why are you reluctant to collect deductibles up front?

When contracted with insurances companies, you get a portion of your payment from the insurance company and a portion from the patient themselves.

The insurance companies see this as cost sharing and it is part of the contract between you and the insurance company and the patient and the insurance company.

If you have wondered is it against the rules to collect deductibles upfront, in fact it is against the rules NOT TO collect the patient’s share. That is part of the cost sharing measures built into the agreements. Insurance companies usually get more frustrated when you waive the patient responsibility and don’t collect.

So yes, it’s possible, legal, and not as hard as you think.

Once you get over your fear, then the next problem is estimating the cost of the visit.

How to collect a high deductible up front without losing your patient or your cool.

How to start collecting what you deserve for the work you do

Step 1) Clarify your financial policies

Step 2) Train your front office how to “Pre-Code” the visit to estimate cost

Step 3) Communicate patient costs without worrying about inaccurate verification details

It all starts with a clearly placed financial policy sent and posted for all patients explaining the collection of deductibles upfront.

Here is a great example from Comprehensive Primary Care’s website. In this case they opted to assign a flat fee to really simplify the policy. This is completely legit and works with their average services costs and reimbursements.


Next, you want to estimate the visit cost.

You can create a starting point by collecting against the E&M visit code. You can use the Medicare Fee schedule reimbursement for estimates reimbursement.  (I attached the worksheet to help calculate it)

So let’s take a simple visit based example:

  1. A patient comes in for new or established patient visit. 
  2. Eligibility verification shows that the unmet deductible is $2575 and we know that the service to be provided is not a 100% covered service.
  3. We know that we are going to get hit with a high patient balance out of pocket.

In this case let’s apply it to the new patient visit code for a level 4 visit (99204).

The Medicare allowable for the 99204 Office/Outpatient Visit is going to be about $164. Now the actual insurance will vary based on the payer but this gives us a start.

So expected Visit Revenue $164 – (minus the) Co-Pay – $25 = (then) Remainder = $139

Now the $139 is going to go straight to patient responsibility. No patient is going to be thrilled about paying $139 on their office visit. Especially if they have been only paying their co pay.


So instead of asking for the entire amount, I like to collect against HALF of the Insurance responsibility.

On top of the Co Payment, you are collecting half of the remaining against the deductible.

Collecting Half : The magic formula that keeps you in the black

On average, a patient visit will carry an internal cost of $85 in overhead. If you are collecting $25 copay plus $69 for visit ($25 + $69 = $94), you reduce your financial risk because you are covering the cost of the visit without falling in the hole for the balance…

$69 uses pricing psychology and eases the blow to the patient at the time of visit. It will not get you into issues with refunds which are messy and take up valuable time.


Over time, if you are tracking reimbursements you can confidently increase from half up to 80% for select insurance plans and visit types.

Use tips from the psychology of pricing to increase collections

When patients prepay, they focus on the benefits they’ll be receiving, which changes their perception of paying. Paying upfront actually encourages patients to follow through with your health plan!

How to use a payment plan with a secure card on file policy for the remainder

No one likes getting bills in the mail. When a patient gets a balance bill statement it is almost always unexpected. On average it takes 3-4 statements before the patient will even respond. Those printing and mailing costs add up to a lot.

Your patients are more willing to establish a payment plan to pay off the remaining balance in smaller increments right there in the office.

Set up a payment plan before the patient leaves:

  1. Prepare Payment Plan Letter and determine amount of monthly payment
  2. Collect initial payment from patient
  3. Provide letter to patient to sign for verification
  4. Add to calendar for follow up reminders

Communicate your card on file policy:

  1. Add a paragraph to your financial policies
  2. Select a PCI complaint “Card On File” Solution
  3. Create signature sheet to go with the Payment Plan Letter

What if your front office doesn’t know what the visit will be?

How to Pre-Code the Patient Visit

In order to call ahead of time to let the patient know their responsibility, we need to know what the codes are going to be. Then you can add extras like lab draws and/or procedures if you want. 

Solution: Simply start with the visit codes:

  • New patient, new problem – 99204,
  • New patient, simple problem 99203
  • Existing patient, new problem 99213 or 99214
  • New pt, annual exam – correct code based on age
  • Established pt, annual exam – correct code based on age


How to get through the frustration of eligibility and benefits verification

The frustrating process of getting patient coverage and benefits information involves continuous hours spent calling, faxing, and searching the websites of insurance plans.

It starts once a patient schedules their visit. You will collect the basics:

  1. Is their coverage active and in-network? Policy & Group number
  2. Do they have primary and/or secondary coverage?
  3. Is the patient the one covered or are they under someone else’s plan?

How to simplify the pre-visit eligibility & benefits check

This process used to mean spending hours on hold with the insurance company just to get a lot of vague and confusing information from a less than pleasant insurance representative. Now many of the newer Practice Management software systems claim to provide “time-saving automation, batch processing and real-time eligibility and benefits verification.”

Regardless of what method you use to get the information, it is often a time consuming and inaccurate process. Following this system you can simplify the process.

The 3 pieces of info you need to determine a patients financial responsibility and not worry about refunds:

  1. Patient’s Annual Deductible Amount
  2. Deductible Amount Met to Date
  3. Individual or Family Out-of Pocket Maximum


Since we are not yet stressing over the specialty codes or procedure codes, and sticking to the visit codes, we can be sure we are covering the basics are and we are not over charging the patient.

If the annual deductible amount is unmet, then we move forward to collect against the deductible using the estimate tool. That’s really all you need.

What if you don’t have the staff to take on the extra work of verification?

Managing overhead costs is a constant challenge in a high volume practice where you are struggling to get paid from everyone it seems. You actually now have options to buy software, hire a part time person, or outsource your Pre-Visit process all together. Of course these all require an investments and you should spend wisely.

You should have reports that tell how much of your revenue is being lost to not collecting enough upfront, the numbers will tell you whether it is worth it and how much you will get in return to add staff or outsource.

What if the patient gets frustrated and won’t pay?

Collecting more from patients is about finding the middle path. If you communicate with the patient before the visit and offer options like payment plans, then you can find the right balance.

The right way to talk to patients about paying:

Be sure collection of all costs including deductibles is clearly defined on the Financial Policies and can be posted at front desk.

As part of PRE-VISIT confirmation calls, give the estimate before they come in – You can even share the worksheet with them so they can see the math. This really has an impact.

Explain that you are actually only collecting half of the responsibility which makes them feel they are getting a discount. I like to say “no one likes getting big bills in the mail”)

Use the right tone when talking to the patients:


Are you getting paid for ALL the work you do?

On average, $300,000 per year in charges goes to patient responsibility. Of that just less than 1/4 will be collected after the patient has left the office.

The likelihood of receiving payment for services declines over time. It even gets to a point where it cost more money to chase the balances than how much you will actually collect.

Then it gets sent it off to the black hole of collections.

More importantly, when you don’t do everything you can to be an advocate for the patient and yourself, you DEVALUE your service as the person IN-CHARGE of their care.

Do you know how unpaid patient balances affecting your cash flow?

Patient balances make up 20-30% of your total practice revenue. This is a big chunk of what you get paid for your work. 

Take a look at these financial reports from a solo practice to see what percentage of revenue comes from Patient Payments



Why you need to collect ALL of what you deserve

Getting full or partial payment on high deductibles in advance, or at the time of service, will improve your cash flow, decrease you billing expenses, and it will teach your patient to value your time and efforts more.

Let’s recap the simple steps-

Step 1) Clarify your financial policies

Step 2) Train your front office how to “Pre-Code” each visit

Step 3) Communicate patient costs without worrying about inaccurate verification details

What will change for you and your practice:

  • You will bring more money into the practice faster helping you to cover bills, salaries, and bonuses
  • You keep more of the money you make because you don’t have a third party billing or collection agency taking a percentage
  • Patients will actually become more loyal because you are being upfront about the payment process and helping make it easy to pay.

About The Author

James Riviezzo

Over the past decade, I have served over 50,000 (mostly) satisfied patients. I have tracked measured and documented what makes a successful practice inside (and outside) the third party payer and oversight system of medicine.