Blog | February 10, 2022

3 Factors Impacting Patient Financial Engagement in 2022

providers using modern patient financial engagement tactic to help asian senior couple pay medical bill on phone

Early in 2022, the healthcare industry is already anticipating a stricter regulatory landscape that will transform patient financial engagement and daily provider operations. A growing focus on healthcare affordability and the tactics used to collect medical debt are causing all involved to reimagine the healthcare revenue cycle and patient payments. Providers will have their work cut out for them to maintain compliance, keep patients happy, and increase earned revenue.

Crackdown of Buy Now, Pay Later Programs

Healthcare costs have been increasing for years – that’s why it’s no surprise that more and more Americans are left with healthcare-related debt. High insurance premiums, high deductibles, co-pays, and other out-of-pocket expenses are just some of the costs adding to the total, and the COVID-19 pandemic left many without any health insurance at all. In the face of these high payments, the emergence and usage of “buy now, pay later” (BNPL) products and business practices has seen huge growth.

According to the Consumer Finance Protection Bureau (CFPB), “BNPL loans are presented as a type of deferred payment option that generally allows someone to split a purchase into smaller installment payments, often with a down payment of 25 percent. The application process is quick, involving relatively little information from the buyer, and the buyer usually pays no interest.”

However, while BNPL may offer some consumers flexibility that can be helpful during hard financial

times, there are downsides for its users. Many BNPL programs have late fees and others apply interest rates reaching as high as 30%. Missing payments may cause BNPL debt to be turned over to debt collectors or end up as negative information on a consumer’s credit report. These repercussions are not uncommon in the BNPL world – more than 7 out of 10 BNPL customers have faced late fees or interest rate charges. According to one study, 72% of those who had fallen behind on BNPL payments saw their credit score fall as a result.

What Buy Now, Pay Later means for providers in 2022:

With the growth of the BNPL patient financial engagement tactic comes with national scrutiny. The CFPB recently published a notice in a recent Federal Register seeking public comments to inform its inquiry into BPNL products – one month after orders were sent to five companies that offer BNPL products instructing them to provide information to the CFPB. BNPL will most likely face more government crackdowns this year, and providers that make use of BNPL must watch for regulatory changes that could impact their daily operations and patient financial experience with BNPL.

The No Surprises Act is Impacting Patient Financial Engagement

As of January 1, 2022, certain aspects of the No Surprises Act went into effect. Part of the Biden administration’s focus on enforcement of the No Surprises Act, the CFPB has issued a bulletin indicating that it will closely review the practices of those engaged in the collection or reporting of medical debt, will hold debt collectors accountable for failing to comply with the FDCPA and Regulation F, and will hold consumer reporting agencies and furnishers accountable for failing to comply with the FCRA and Regulation V. The CFPB states that it “will use all appropriate tools to assess whether supervisory, enforcement or other action may be necessary.”

As expected, most providers are finding that staying compliant with the No Surprises Act is no easy task. In a recent Becker’s Healthcare Review article, compliance officers from various healthcare facilities stated that implementing policies and procedures to stay compliant with the No Surprises Act has put a strain on their resources – resources that are already burdened by another surge of COVID-19 and other operational challenges, such as excessive staff turnover.

What the No Surprises Act means for providers in 2022:

To maintain continued compliance with the No Surprises Act, providers and the debt collectors to whom they may refer medical bills covered by the No Surprises Act should exercise caution. Furthermore, they should make certain that they understand the provisions of the No Surprises Act. Their policies and procedures should be reviewed and updated to ensure that they do not seek to collect an amount more than that owed by the patient under the No Surprises Act. As we move further into 2022, all eyes will be on providers to see the true impacts of the No Surprises Act on patient financial engagement and how providers will fare under these regulatory changes.

Patients Expect More Payment Flexibility Without Taking on More Debt

Many factors are shaping patients increasing need for more flexibility when paying for their care. According to CMS, healthcare expenditures grew to $4.1 trillion in 2020, or $12,530 per person. The 2021 CarePayment Member Survey found that 42% of patients delayed healthcare because of increasing cost, 91% stated it was easier to pay for medical expenses when they have at least 12 months to pay, and 0% preferred a traditional interest-bearing financing program. With similar statistics continually emerging from the healthcare industry, patients are clearly telling providers what they expect from them when it comes to their financial journey – and providers that want to see success in 2022 and beyond need to listen.

A solution to break the cycle of medical debt and maintain compliance continued compliance? The 2021 CarePayment Member Survey discovered that a long-term, interest-free financing solution helps providers meet patient needs as well as maintain regulatory compliance. When providers offer interest-free financing over the course of the loan with flexible payment terms, it removes a primary obstacle to timely access to care. Additionally, regulatory bodies are more focused than ever on the predatory nature of surprise bills as well as interest-bearing and deferred interest loans. CarePayment’s 0.00% APR patient financing solution keeps providers compliant while satisfying patients growing financial needs.

What Payment Flexibility means for providers in 2022:

When patients have the flexibility to pay their balance over time in small payments without the worry of being buried in interest, they are more likely to pay – enabling providers to collect on balances owed. 74% of people surveyed prefer to pay their future medical expenses with CarePayment’s interest-free solution. 45% stated they do not know how they would have paid for their medical expenses without CarePayment’s patient financing program, while 28% stated they never would have been able to pay their medical expenses without CarePayment. Providers must prioritize a patient-centered financial experience that offers flexible and compassionate payment options for patients if they want to truly thrive in 2022.