Matters in Healthcare: What are upfront payments?

What’s the difference between an upfront payment and a co-payment?

“Upfront Payment” is a short-hand term to refer to charging insured patients the full fee at the time of the visit. The patient then has to submit a claim to his or her insurer for to recover the insured portion.  

This type of payment, however, is very different from a co-payment.  A co-payment is the portion of the bill that is not covered by insurance. This is charged to the patient, while the remainder of the bill is sent to his or her insurer. Co-pays are intended to ensure a patient’s investment in their treatment. They can help to lower insurance costs, and prevent potential over-use of some services.

What do I have to pay when I have a health visit?

From August 1, insured patients will have to pay only the co-payment during a healthcare visit. This is because the Health Insurance (Health Service Providers and Insurers) (Claims) Regulations 2012: 

* prohibit healthcare providers from charging the full fee “upfront”

* require providers to send the insured portion of the bill directly to insurers, and 

* mandate insurers to pay electronic claims within 30 days. 

The regulations allow for exemptions if approved by the Bermuda Health Council. 

Regardless of the regulations, your healthcare provider both before, and after, August 1 will be able to charge a co-payment.

How will I know if my healthcare provider is exempt from the regulations?

The list of approved providers will be posted on BHeC’s website (www.bhec.bm) and regularly updated. Your healthcare provider will also receive a letter from the BHeC granting approval to charge “upfront”.

I have heard the new regulations are overburdening the healthcare providers. Why go through the trouble?

The Ministry of Health first asked BHeC to assist with this problem in April 2008, given the number of complaints it was receiving from the public. In 2010 BHeC developed voluntary guidelines to promote fair charging and reimbursement practices. 

BHeC monitored the practice of charging upfront via surveys in July 2009, October 2010 and April 2012. As there was no reduction in the practice and complaints to the Ministry of Health continued to come from the public, the Ministry pursued a legislative solution, which resulted in the creation of the Health Insurance (Health Service Providers and Insurers) (Claims) Regulations 2012. 

The regulations are intended to remove barriers to accessing health services for the insured population. Published literature has shown internationally that health costs can prevent people from seeking care in a timely manner. In Bermuda, an independent survey this year found that 14 per cent of residents had gone without treatment or a medical visit because they would have had to pay the full fee at the time of service. 

The regulations come into force in August 2012, and BHeC will monitor compliance and facilitate collaboration among insurers and providers. The legislation has been well received by the public and by patient advocacy groups. It is hoped that it will help to reduce barriers in access to healthcare, improve efficiency in claims-processing for insurers, and enable faster insurance payment for healthcare providers. 

Correction: This article as it appeared in the paper on Friday, June 29, carried an incorrect byline and should have been attributed to The Bermuda Health Council.