OB/GYN Prepayment?

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sg2060
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OB/GYN Prepayment?

Post by sg2060 »

My wife is 6 months along in her pregnancy with our first child. We are very excited and have been pleased with her doctor so far. However, we've received a form from the practice requesting (demanding?) prepayment of her deductible by next month. Her deductible is $2,800 (HDHP w/ Cigna). To date, we have received insurance-negotiated bills of ~$500, which we've promptly paid. She hasn't had any other medical expenses this year, so we presumably have a lot of deductible space left.

I'm generally confused as to why the practice is requesting prepayment and the ramifications for next year. How is this excess payment treated? I guess I won't have too much of a problem if this prepayment is counted against the deductible for 2020, but will it? We will blow through the deductible next year obviously. Any help would be greatly appreciated! I don't want to cause issues at the practice by declining to pay when my wife is happy with her doctor; I also don't wanna be screwed over. Thanks!
bob60014
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Re: OB/GYN Prepayment?

Post by bob60014 »

What did they say when you asked why they require a prepayment?
Topic Author
sg2060
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Re: OB/GYN Prepayment?

Post by sg2060 »

bob60014 wrote: Mon Nov 11, 2019 10:05 pm What did they say when you asked why they require a prepayment?
Typical answer I receive when asking why at medical establishments...tantamount to "we just do" for all HDHP plans. For what it's worth, this is with a very popular practice in a 500k+ population city in the South.
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Nate79
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Re: OB/GYN Prepayment?

Post by Nate79 »

This is very common. We had this a few years ago and was required if you wanted to do business with the group of doctors my wife had selected. It's to prevent people who don't pay their bills from stiffing the doctors out of payment which is a huge issue with people on HDHP plans. In the end if you go over your deductible or OOP and are owed money back you will get a refund from the hospital after all bill's are worked out.

Edited to add: the prepayment has nothing to do with meeting your deductible. Meeting your deductible only relates to claims made to your insurance for actual medical work. This payment is only a prepayment, not an insurance claim. Meeting your deductible related to claims for treatment that occurred in the calendar year.

We had no issues getting our money back. If you doubt you will get your money back then why in the world would you want to do business with such a group?
Last edited by Nate79 on Mon Nov 11, 2019 10:33 pm, edited 2 times in total.
orhkaf
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Re: OB/GYN Prepayment?

Post by orhkaf »

I doubt they will roll over the excess to the next calendar years deductible. Getting your money back will be almost impossible. Have them send you a bill according to the negotiated fee schedule once the service is performed.
drawpoker
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Re: OB/GYN Prepayment?

Post by drawpoker »

Questions you are asking fall under two distinct and different domains. The doctor's office, and your insurer.

As for the doc, it is customary for OB docs to have all insurance ducks in row well in advance of delivery date. Part of the process is that when first accepting the new patient all details of insurance coverage was reviewed. Otherwise, the patient could have been turned down.

Since the bulk of the OB's "work" is going to be the actual delivery, not the routine pre-natal office visits, it is reasonable that OB offices observe this practice. To be blunt, the quote you were given for your wife's care was based on routine, vaginal, delivery, right? Now, what if things go bad, an emerg c-section is needed. That original fee quote goes out the window. Even if everything goes fine with the birth - who's to say you (responsible party) might not have had some such sort of financial reverses in the last trimester, and the balance owed goes unpaid.

As for your other :?: :?: , how your payment will be allocated with respect to deductible, those should be directed to your insurer, not the doc's office
Big Dog
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Re: OB/GYN Prepayment?

Post by Big Dog »

I'm guessing that this doc is out of network? In in-network, the doc would have a contract with the insurer which would cover the practice of billing up-front, or not; moreover, it would include what you are responsible for and when. If in-network, I'd call the insurer and inquire about their practice, as OB's are normally paid monthly throughout the 40 weeks and a final lump sum upon delivery.
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sg2060
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Re: OB/GYN Prepayment?

Post by sg2060 »

Thank you all. This forum is invaluable. Perhaps numbers will help me understand better. Please correct me if I'm wrong: So say we pay the prepayment amount requested in 2019 ~$2,000 prepayment. If my wife's 2020 OB/GYN visits and delivery run $15,000, we cover the first $2,800 (deductible). Then assuming 10% coinsurance, is the additional $1,220 charge covered by the $2,000 prepayment? And we'll receive a $780 refund?
Katietsu
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Re: OB/GYN Prepayment?

Post by Katietsu »

Would it make sense to view this almost like an escrow account?
frugalmama
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Re: OB/GYN Prepayment?

Post by frugalmama »

Big Dog wrote: Mon Nov 11, 2019 10:40 pm I'm guessing that this doc is out of network? In in-network, the doc would have a contract with the insurer which would cover the practice of billing up-front, or not; moreover, it would include what you are responsible for and when. If in-network, I'd call the insurer and inquire about their practice, as OB's are normally paid monthly throughout the 40 weeks and a final lump sum upon delivery.
I've always used in-network docs and the practice of prepayment is very standard and customary for OBs. The prepayment is based on the pre-arranged number of visits and expected care (stress tests, etc.) that they expect in a delivery. Likewise, if you are a required c-section, that pre-payment changes to reflect that. It is due to the fact that the billing doesn't happen until the end in most cases (i.e. they don't bill per office visit, but rather you get so many visits under the standard contracted rate) and any additional services, etc. then get tacked on. It is essentially a retainer account as you aren't actually getting "billed". Some times I've ended up with a slight refund and other times I've owed a couple of hundred dollars at the end.
frugalmama
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Re: OB/GYN Prepayment?

Post by frugalmama »

Katietsu wrote: Mon Nov 11, 2019 11:02 pm Would it make sense to view this almost like an escrow account?
That is exactly what it is...or a retainer account for a lawyer. It is still your money. My OBs have not even been able to create a "bill" for me in the past as the amount actually isn't billed until the end. They are just holding your funds to make sure they get paid. You can then go back and remove the money from your HSA if you want (assuming you have one).
toofache32
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Re: OB/GYN Prepayment?

Post by toofache32 »

Big Dog wrote: Mon Nov 11, 2019 10:40 pm I'm guessing that this doc is out of network? In in-network, the doc would have a contract with the insurer which would cover the practice of billing up-front, or not; moreover, it would include what you are responsible for and when. If in-network, I'd call the insurer and inquire about their practice, as OB's are normally paid monthly throughout the 40 weeks and a final lump sum upon delivery.
This is about the patient's portion of payment, not the insurance company. The contract is all fine and dandy, but what happens when the patient fails to hold up their end of the bargain and pay their portion? The OB practice is collecting up front since everyone knows their services WILL be needed soon, as always with pregnancy. There is no repo man for childbirth...they can't go put the baby back in.

In these days of high-deductibles where insurance companies shift larger portions of financial responsibility onto patients, many patients cannot afford their deductible. What is your recommendation for the business to protect themselves?
fasteddie911
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Re: OB/GYN Prepayment?

Post by fasteddie911 »

We went thru the same thing. We pre-paid for most visits, including scans and labor & delivery estimate, then they eventually ran it thru insurance and we got a refund afterwards, which was the most annoying part having to request it. They'll likely hold onto this payment, run everything thru insurance then take your share (deductible and copay) with these funds. If they're short they'll charge you the difference, anything leftover they'll refund you. Not a big deal and no one is screwing you over.
barneycat
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Re: OB/GYN Prepayment?

Post by barneycat »

+1 to all the folks saying this is normal.

I think you've got the good info here. I'm in the same boat and called the office to ask directly about the bill last week. My wife is due in May, so my concern was any payments now not going toward my 2020 deductible (because I plan to make 2020 the year of the medical bill). Exactly what others have said: you pay in installments now and then the office files the insurance claim after delivery.

On another note - private insurance?! I left the navy after 11 years in January and landed a job at a company with, what everyone says, are excellent benefits. I quickly acknowledge we were very spoiled with free healthcare, but still, I'd hate to see what "bad benefits" are....
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8foot7
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Re: OB/GYN Prepayment?

Post by 8foot7 »

We've had this now with two different clinics. I've learned to put up with it now that I've determined the amount is negotiable. They asked us in December one time to begin paying them $6,500 (the full amount of our HDHP deductible) for a July delivery. This was at a time we were self-employed and cash flow was not necessarily predictable for us.

I said no, I'm not solving your cash flow problems at my expense especially when we are sure to have insurance-applied charges that will reduce our remaining deductible by the time the delivery in July rolls around. (Our son at the time was in feeding therapy and we were paying $140 a week to a therapist which was run through insurance and applied to our deductible.) Also there's no guarantee the hospital billing wouldn't beat their office billing to the punch and thus we'd owe the hospital the remaining deductible and the OB would be paid in full by insurance, leaving us holding the bag looking for a refund.

I said, what's your normal delivery charge? And they gave a number which was several thousand and around the amount of the deductible.

I told them that here's the deal, we will incur at least $3,500 against the deductible before this baby ever enters the world so I'm not going to advance you money that I know for a fact you're going to owe me back anyway as a mathematical certainty. I said I would pay them $2,000 in monthly installments through July and then they could bill us for the rest and I would pay any balance within 60 days after everything was applied to insurance correctly.

I don't think they were used to people telling them no, but it worked. And in fact they owed us a refund, so I was right twice, because the hospital and anesthetist hit the insurance first and ate up the deductible. My advice would be to not let them charge you your entire deductible if your delivery is scheduled in later in the year and to not be afraid to tell them what's up.
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BolderBoy
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Re: OB/GYN Prepayment?

Post by BolderBoy »

Katietsu wrote: Mon Nov 11, 2019 11:02 pmWould it make sense to view this almost like an escrow account?
Precisely!
"Never underestimate one's capacity to overestimate one's abilities" - The Dunning-Kruger Effect
dred pirate
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Re: OB/GYN Prepayment?

Post by dred pirate »

sg2060 wrote: Mon Nov 11, 2019 10:09 pm
bob60014 wrote: Mon Nov 11, 2019 10:05 pm What did they say when you asked why they require a prepayment?
Typical answer I receive when asking why at medical establishments...tantamount to "we just do" for all HDHP plans. For what it's worth, this is with a very popular practice in a 500k+ population city in the South.
you might live in my town - almost all of the offices here do it (in a 500k+ city in the south).
dred pirate
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Re: OB/GYN Prepayment?

Post by dred pirate »

8foot7 wrote: Tue Nov 12, 2019 8:41 am We've had this now with two different clinics. I've learned to put up with it now that I've determined the amount is negotiable. They asked us in December one time to begin paying them $6,500 (the full amount of our HDHP deductible) for a July delivery. This was at a time we were self-employed and cash flow was not necessarily predictable for us.

I said no, I'm not solving your cash flow problems at my expense especially when we are sure to have insurance-applied charges that will reduce our remaining deductible by the time the delivery in July rolls around. (Our son at the time was in feeding therapy and we were paying $140 a week to a therapist which was run through insurance and applied to our deductible.) Also there's no guarantee the hospital billing wouldn't beat their office billing to the punch and thus we'd owe the hospital the remaining deductible and the OB would be paid in full by insurance, leaving us holding the bag looking for a refund.

I said, what's your normal delivery charge? And they gave a number which was several thousand and around the amount of the deductible.

I told them that here's the deal, we will incur at least $3,500 against the deductible before this baby ever enters the world so I'm not going to advance you money that I know for a fact you're going to owe me back anyway as a mathematical certainty. I said I would pay them $2,000 in monthly installments through July and then they could bill us for the rest and I would pay any balance within 60 days after everything was applied to insurance correctly.

I don't think they were used to people telling them no, but it worked. And in fact they owed us a refund, so I was right twice, because the hospital and anesthetist hit the insurance first and ate up the deductible. My advice would be to not let them charge you your entire deductible if your delivery is scheduled in later in the year and to not be afraid to tell them what's up.
Kudos to you to negotiating - you situation is different that the OP's thou. I think so many offices end up not collecting from a substantial portion of their clientele, so this is why they do that. If you have elective surgery at my hospital, you have to pay upfront for this very reason.
obgraham
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Re: OB/GYN Prepayment?

Post by obgraham »

Obviously times have changed since I did this line of work, but I can assure OP that unless the practice is a bunch of crooks, anything that turns out to be an overpayment will be refunded. This was a monthly task at my practice, and involved every refund down to $1.00.
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sg2060
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Re: OB/GYN Prepayment?

Post by sg2060 »

Many thanks to all the thoughtful and thorough answers. I understand the scenario now and don't have to worry my wife with a non-issue. Win-win. The practice would go a long way in crafting a letter that fully explains what they are doing. The letter I received was vague at best.
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8foot7
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Re: OB/GYN Prepayment?

Post by 8foot7 »

obgraham wrote: Tue Nov 12, 2019 1:38 pm Obviously times have changed since I did this line of work, but I can assure OP that unless the practice is a bunch of crooks, anything that turns out to be an overpayment will be refunded. This was a monthly task at my practice, and involved every refund down to $1.00.
I don't doubt this and I never thought we'd be out the money permanently, but it took 90 days to get this refund in our case and some--though not a ton--of legwork and no offer of interest either. If they wrote into the prepayment paperwork that the refund check would be cut within 7 days of insurance processing, I'd have gone more along with it, but the paperwork was all about our responsibilities and there was literally nothing about theirs. As a general rule I try to avoid giving my own money to people to store it for me for free, especially in cases where I'm likely to need that money they're storing while they have it.
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