Health Care's Financial Toll on College Parents

Yet despite the prevalence of insurance coverage, Penn State and many other universities will not accept insurance. Many will not charge an office visit fee, and if they do, it usually amounts to a nominal fee, akin to a co-payment charge. However, they do not bill insurance for the office visit. This practice, or financial malpractice, sacrifices a significant revenue stream that may be compensated by higher than necessary student health fees.

In addition, because these student health centers do not accept your insurance, then your child – or in most cases, you – pay out of pocket for various x-rays and labs. Indeed, at The University of Florida (UF) students and parents paid over $4,000,000 in ancillary services in 2004-05, a number that would presumably have been much smaller had UF accepted health insurance.

And while the health centers give students paperwork to file with their insurance companies, reimbursement is difficult. Since most health center providers are considered “out-of-network,” reimbursement is that much tougher. The History and Practice of College Health notes that reimbursement only occurs about 25% of the time in an “out-of-network” scenario. According to Georgia Southern health center director Paul Ferguson, insurance companies even have begun denying pharmacy reimbursement (usually the simplest to bill) if an office visit charge does not accompany the bill for prescription drugs.

So why don’t student-health centers, like the one at The University of Florida, accept insurance? According to the 2004-05 Annual Report for the Student Health Care Center, UF students “sought a way to have their family insurance programs adequately pay for lab fees and other billed services ‘up front,’ thereby eliminating some of the reasons for holds on their records.”

The answer may simply be that insurance billing is a tough business, especially when the process involves the exhaustive process of credentialing the providers to become “in-network” with the various insurance companies like Blue Cross, Aetna, United, Humana, Cigna and the like. Not to mention the strict regulatory, marketing and technological requirements, or the significant capital required to launch an insurance billing practice.

Fortunately, one company developed the niche market of conducting third party billing in student health centers. Highland Campus Health Group is working with 11 campuses across the country, including Arizona State University (ASU) and its 50,000 plus students, with many other universities seeking to partner with Highland before the 2007 academic year begins.

Initial results look promising. According to an August 2006 article in the ASU student newspaper, “with the estimated increase in revenue from office visit fees, the center is expanding mental health services and transitioning to a state-of-the-art electronic records system.”