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What Are the Hidden Risks in Patient Financing

What is Patient Financing?

Medical costs have exponentially increased over the past decade, rising 5.5% per year, prompting an urgent need for patient financing. According to the Kaiser Family Foundation, roughly 3 in 10 Americans have problems paying their medical bills. 

A large amount is deductible even if patients have insurance. A deductible is an amount a person pays for healthcare services each year before health insurance pays for a portion of a service’s cost.  

In 2020, the average annual deductible for individual coverage was $4,364, and family coverage was $8,439. However, this may vary for each health insurance plan since some may be as low as $0.  

Patient financing is specifically for medical procedures to help patients consolidate existing medical debt, elective procedures, out-of-network charges, and high deductibles. In some cases, necessary treatments covered at 50% by insurance plans.  

Typically, patient financing uses the client’s credit score and history to determine eligibility for medical loans.  Medical financing is the only bridge between patient and procedure when people cannot pay immediately.    

However, there are some hidden risks when it comes to patient financing.  

Synthetic Identity Theft

Synthetic identity theft is a type of fraud where a criminal combines real and fictitious information (name, date of birth, and Social Security number) to create an identity that doesn’t correspond to an actual person. This allows criminals to open bank accounts to apply for loans, credit cards, and other related financial service accounts.  

Synthetic identity theft is different from traditional identity theft. For regular identity theft, people’s personal information is stolen and sold on the underground market. That used without the person’s knowledge until the fraud appears on their credit file or is notified by the bank. Meanwhile, synthetic is a combination of real and fake information.  

According to the Federal Trade Commission, medical identity theft occurs when someone uses another person’s health insurance information to obtain medical treatment, prescription drugs, or surgery. Synthetic fraud has made its way in patient finance and is comparable to the amount of fraud detected in other financial services.  

At first glance, committing synthetic fraud in patient finance may not seem worthwhile for criminals since the patient’s loan is directly wired to the medical provider rather than the customer. But instead of stealing money, the fraudster can receive a medical procedure free of cost.  

In some cases, the major risk of patient finance is the lenders, the medical providers. These providers may collaborate with criminals to help them apply for loans under the guise of fictional patients. According to the National Health Care Anti-Fraud Association, healthcare fraud costs the country about $68 billion annually, approximately 3% of the nation’s $2.26 trillion for health care spending.  

Synthetic identity theft has become the fastest-growing financial crime in the United States. Luckily, victims who fall into this fraud can flag and freeze credit files. They are not held responsible for their accounts involved in fraudulent activities.  

Another hidden risk in patient financing is no-interest loans.  

Too Good to be True: No-Interest Loans

While some lenders advertise no-interest loans for patient financing, this isn’t always the case; there are often catches that could cost you an arm or leg. These 0% loans allow the customers to only pay back the money borrowed from the lender. However, these loans include additional costs such as an origination fee to qualify, the person will need a strong credit score.  

These loans may seem appealing for patient financing since medical procedures cost a pretty penny. But be mindful of the fine print since. Most of these loans need to be paid off in a specified period.

Most loans that offer an introductory 0% interest rate. However, once payments are late. High rate of interest can charged to the customer for the entire balance.

Patients who cannot make payments on time should be wary of no-interest loans since they may wind up paying a more significant amount. 

Best Practices for No-Interest Loans

To avoid paying interest for 0% interest loans, be sure to do the following:

  • Be familiar with any late fees that may apply, such as retroactive interest
  • Make payments every month enough so that the balance will be paid off before the promotional 0% interest rate ends
  • Never miss a payment

Be sure to find a business that will put the patient’s interest first rather than have hidden fees that can put a financial strain. 

Use Denefits for Safe Patient Financing

Denefits offer businesses dependable financial services for medical procedures, especially if patients cannot qualify for 0% interest loans. There are no concerns with synthetic identity theft or hidden feeds under loans.  

With no credit checks, everyone is eligible to use their services. However, Denefits does report the payments to credit bureaus which allows the patient to build their credit. They also offer payments plants with low-interest rates over a selected amount of time.  

Overall, there are risks to all finance; however, maintaining good health is far more critical.


Denefits is a leading complete payment solutions platform used by customers and businesses alike across many industries.

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