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Experts: Know your options when it comes to medical credit

Published: Thursday, Dec. 5, 2013 11:44 p.m. CDT • Updated: Thursday, Dec. 5, 2013 11:50 p.m. CDT

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All Smiles Dental offers a variety of payment options for customers.

Insurance covers some costs involved with dental upkeep, but without the proper plan more serious treatments and multiple visits can be expensive, forcing many to either seek alternative methods of payment or avoid the dentist altogether.

The Algonquin office caters to customers despite their financial situation, offering payment plans and dental credit through third-party companies. The business also began an in-office savings plan this week to help with dental costs.

“Patients need to stay up-to-date with their dentistry needs, and money shouldn’t get in the way of that,” said Dr. Tim Stirneman, owner of All Smiles Dental. “There are several options that help people afford dentistry that they couldn’t get otherwise. You just have to know how they work.”

All Smiles Dental is one of many dentist and doctor offices, hearing aid centers and pain clinics offering patients lines of credit and long-term payment options as a way to pay for treatments not covered by their insurance plans, experts said.

The growing practice can pay dividends for clients unable to afford coverage as long as the agreement is followed.

A review by The New York Times of dozens of customers’ contracts for medical cards and lines of credit, as well as hundreds of court filings in connection with civil lawsuits brought by state authorities and others, shows how perilous such financial arrangements can be for patients — and how advantageous they can be for health care providers.

Many of the cards initially charge no interest for a promotional period, typically six to 18 months, an attractive feature for people worried about whether they can afford care, according to an article in The New York Times. But if the debt is not paid in full when that time is up, costly rates — usually 25 to 30 percent — kick in.

If payments are late, patients face additional fees and, in most cases, their rates increase automatically, the article states. The higher rates are often retroactive, meaning they are applied to patients’ original balances, rather than to the amount they still owe.

While national medical or dental associations have formal policies of the practices, ADA Business Enterprises, a profit-making arm of the American Dental Association that connects dentists and businesses, endorses General Electric’s CareCredit, whose cards are use by more than seven million people nationwide, The New York Times article states.

About 25 percent of revenues at All Smiles Dental come from customers’ using CareCredit, Stirneman said. Other revenue comes from payment plans signed up for through Springstone Patient Financing and loans acquired through Fortiva Financial. 

Using the third-party companies has been a boon for the business and customers thus far, as long as patients know exactly what the plan entails and what can happen if it is not followed.

“We tell the patients to make sure to pay it off in the amount of time agreed upon because rates can skyrocket,” Stirneman said. “It works out really well. The rate of default for dental bills is very low. A lot of patients who don’t think they can get credit can get it through these companies.”

Because a segment of customers who come to the dental office are uninsured, the business rolled out its own discount program. Most preventative dental care is fully covered at lower payments for clients, and restorative and other services are given at a discounted rate for those enrolled.

For clients who choose to get a credit card or line of credit, there are several things they would want to look into before agreement to the terms involved, said Mayra Leanos, credit counselor with Consumer Credit Counseling of McHenry County.

That includes making sure to read the fine print when it comes to promotional periods to see when it ends and what the interest rates will be after it’s over; agreeing to an affordable minimum payment that will allow the client to pay off the balance before the promotional period is over because of higher rates after that point; and clarifying any fees for things like late payments.

“Lastly, people should always ask whether they are signing up for a credit card or an internal program being offered by their medical facility,” Leanos said. “How things are being marketed, many people think they are signing up with their medical provider versus getting a credit card. Always make sure you ask.”   

Crystal Lake Dental Associates offers CareCredit to its customers.

Patients who select the financing option include those who want to use it for the part of the cost their insurance doesn’t cover, or “people who just really budget and want to keep everything straight,” said Cindy Chapman, business associate at the Crystal Lake office.

Once the patient decides to use CareCredit, the dental office is no longer involved financially, Chapman added.

“All we do is give them the information, and then it is between them and CareCredit,” she said. “We have nothing to do with it after that.”

Credit cards of all types also are playing a growing role in financing medical care, The New York Times review found. In 2010, about $45 billion in health care costs was charged on credit cards in the U.S., according to the consulting firm McKinsey & Company.

Health insurers shift nearly one-quarter of the final medical bill to patients, according to findings released in June from the AMA’s sixth annual checkup of health insurers and their patterns for processing and paying medical claims.

As health insurer agreements with employers pass on greater portions of medical service costs to employees, credit cards may provide a convenient means for patients to pay their portion of the medical bill.

“Physicians want to provide patients with their individual out-of-pocket costs, but must work through a maze of complex insurance rules to find useful information,” said Dr. Barbara McAneny, chair-elect for the AMA. “The AMA is calling on health insurers to provide patients and physicians with better tools that can automatically determine a patient’s payment responsibility prior to treatment.”

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