Why Canadian hospitals are struggling to get paid by American patients

Our physicians have a responsibility to treat anyone in need — but what happens when a patient skips out on the bill?
By Tola Afolabi - Published on December 7, 2017
Thunder Bay hospital
Doctors and hospitals generally raise the subject of payment only if there is time and the discussion does not interfere with treatment. (CP/Thunder Bay Chronicle-Journal)

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​American visitors who fall ill in Canada are creating a headache for hospitals in border cities: these patients sometimes skip out on the bill, leaving Ontario hospitals or physicians in the lurch.

“When patients from another country come to one of our emergency departments or urgent care centres, our top priority is to provide them with safe, quality care, regardless of their financial situation,” says Niagara Health spokesperson Steven Gallagher.

Canadian physicians have a responsibility to treat any patient, insured or not, whether they are Canadian, American, or from anywhere else. But this can mean that health-care providers are left chasing down payment long after the patient has gone home.

“The hospital has to absorb that [loss],” says Mark Fathers, Windsor Regional Hospital’s chief financial officer.

Niagara Health’s hospital in Niagara Falls, Ontario, treated 1,560 out-of-country patients last year. The hospital tries to collect payment before the patient leaves the hospital, Gallagher says, but when this isn’t possible, the hospital will bill the patient or insurance provider directly. If that fails, it employs collection agencies.

In Windsor, the typical American emergency cases are people who have been seriously injured in a car accident, or women in labour. While a new-born baby automatically qualifies for OHIP coverage, the non-resident mother is not insured.

The Thunder Bay Regional Health Sciences Centre is a 45-minute drive from the U.S. border. “We tend to see quite a large number of Americans who come up for fishing, hunting activities. Quite often injuries will be related,” says hospital spokeswoman Tracie Smith. The hospital had 1,011 visits from American patients between April 2016 and March 2017; of that total, 76 accounts are outstanding.

There, a visitor admitted to the emergency department can expect a bill for at least $825: $650 for hospital costs, and $175 for the emergency physician’s assessment. Specialists’ assessments, procedures, and tests such as X-rays and CT scans are extra. A CT scan can cost $1,400.

Doctors and hospitals generally raise the subject of payment only if there is time and the discussion does not interfere with treatment. “The whole billing is really after the fact,” Fathers says. “We don’t hold up treatment to ensure we are being paid.”

Hospitals may resort to compromises in order to minimize their losses. “We work with [the insurance companies] and we work with the patient. If the patient doesn’t have insurance we set up payment plans with them. So we try to be as flexible and accommodating as we can,” Smith says.

Aggressively pursuing payment is typically not worth it for individual physicians, who bill independently of the hospital and don’t have access to the same recovery mechanisms. Absorbing costs is a reality that a doctor practising near the border needs to accept, says Adrienne Kelly, an orthopedic surgeon at Sault Area Hospital in Sault Ste. Marie. “I’d send the invoice to the patient. If I don’t get paid, I don’t get paid.”

The Sault Area Hospital has treated 80 American patients in the past two years, says Brandy Sharp Young, a hospital spokeswoman.

American insurance companies honour his invoices only half of the time, says Mark Kotowycz, a Windsor cardiologist. “Usually, I would send one or two invoices, and if I don’t get paid, I would leave it at that, because I don’t have a billing department that specializes in that.”

The losses have led Kotowycz to develop a new approach: while foreign patients are typically charged more than would be billed to Canadian residents, he now offers foreign patients OHIP rates if they pay the same day. He says it saves him the hassle of dealing with U.S. insurance companies later.

Since implementing this incentive two years ago, Kotowycz says he’s recouped all of his fees.

He says some colleagues, frustrated by their losses, have followed suit. “They gave up chasing after the insurance companies.”

One way hospitals protect themselves is to transfer critically ill patients back across the border as speedily as possible. “We try to stabilize the patients where they can hopefully be discharged back safely to the U.S. for the remainder of their care,” Fathers says, noting that Detroit’s acclaimed Henry Ford Hospital is less than a half-hour drive away.

Kelly works with the local hospital’s emergency department to transfer patients to the War Memorial Hospital in nearby Sault Ste. Marie, Michigan.

But the risks don’t end there for hospitals and physicians along the border: they could also face lawsuits from American patients unhappy with their treatment. “Obviously I’m conscious of it coming from a [Canadian] system that’s less litigious,” says Kelly, who has practised on both sides of the border.

And Canadian physicians’ malpractice insurance may not help. Even so, there are instances where the Canadian Medical Protective Association, which provides legal advice to doctors, will step in and assist members with legal issues outside of Canada, says Dima Hanhan, a CMPA spokeswoman.

To guard against costly legal action in the U.S., hospitals here require foreign patients to sign a waiver stating that any malpractice lawsuits must be filed in Ontario.

The drop in cross-border tourism since 9/11 has helped ease the payment and lawsuit problem. “There used to be a lot of activity of U.S. young people coming across — the so called ‘kiddie bar scene’ — and many would end up in the emergency department,” Fathers says.

Creative approaches also help ease the pain for doctors. Kelly recalls the time a surgeon colleague approached an anesthesiologist to put an American patient to sleep. The anesthesiologist readily agreed, despite the risk of not being paid. His reward? A bottle of wine from the grateful surgeon.

Tola Afolabi is a plastic and reconstructive surgeon and a journalism fellow at the Munk School of Global Affairs at the University of Toronto.

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