“Patient friendly billing” is an oxymoron for most patients. Despite industry-wide efforts, most billing practices are anything but patient friendly.
This comes at a time when patients are the fastest-growing payer in healthcare services. The Centers for Medicare & Medicaid Services project a 58% increase in patients assuming greater financial responsibility for out-of-pocket expenditures between 2016–2026. As per the Kaiser Family Foundation Health Benefits Annual Survey, 29% of covered workers were enrolled in a HDHP/SO in 2018, continuing an upward trend.
As a result, a patient friendly revenue cycle is no longer optional when it comes to driving prompt payments and fostering patient satisfaction and loyalty. It is now an absolute necessity.
Patient Billing Pain Points
There are two main pain points for patients when it comes to billing:
- Lack of transparency about pricing prior to the point of service
- Difficulty understanding billing statements
Let’s look into the impact each of these has on both patients and providers.
Patient Billing Pain Point #1: Lack of Pricing Transparency
Now that patients are financially responsible for a larger portion of their healthcare costs, they want and need to know how much their services will cost ahead of time. According to a recent survey, 38% of patients currently shop around for healthcare based on price, and 75% are willing to do so.
Unfortunately, their questions about prices are often met with an “I don’t know.” Doctors don’t know how much certain procedures cost. Insurance agents or hospital staff may sometimes try to give general estimates, but they often leave patients feeling unsettled from the lack of certainty. Online sources can give general estimates, but the patient’s actual cost will vary widely depending on their location and insurance coverage.
In 2016, a VOX video covering an expectant father’s attempts to get a price estimate for his son’s birth went viral, highlighting the public’s interest in this topic. The video shows clips from his 10+ hours on the phone with six different hospital billing departments. He did eventually get an estimate, though it was off by $500.
Nobody wins when patients are then surprised with a bill they struggle to pay or can’t pay altogether. Patients often avoid or delay needed procedures due to a lack of transparency about the price.
They also vote with their feet, leaving their providers for ones who do offer price transparency. According to the same survey, 59% of patients say providers’ price transparency prior to the point of service is a critical factor in determining where they seek care. That percentage rises to 69% for Gen Xers.
Patient Billing Pain Point #2: Confusing Billing
As per a 2018 InstaMed survey, 70% of patients are confused by their medical bills.
It’s no wonder. Traditional medical bills are not at all geared towards the patient, but instead to insurance companies. ICD10 codes, hospital-specific jargon and industry abbreviations mean nothing to the average patient. Some tech-savvy patients are able to look up the codes and terms online to get a sense of what they’re being billed for, but not all patients have the know-how or means to do this. The different numbers for cost and insurance reimbursement add to the confusion, with many patients not knowing how much to pay.
Not only that, patients may receive multiple separate bills for what they see as the same procedure—one from the hospital, one or more from individual doctors, one or more from medical labs, etc. These bills may come months after patients pay what they thought was the entire bill.
That’s a recipe for missed or delayed payments.
In a 2016 Mad*Pow survey, 40% of patients acknowledged ignoring a confusing bill to see if it would “clear up over time.” One patient even admitted to waiting until the bill went to collections to address it, as that would indicate the bill had gone all the way through insurance.
There’s also another cost to consider: lost patients. According to the same survey, 23% of patients who’d had a frustrating experience with billing statements would choose not to seek additional care, 56% would hesitate to seek additional care, and 15% would change healthcare providers.
Relieving the Pain Points: Two Patient Friendly Billing Solutions
The research shows that patient billing—for too long an afterthought—has become a critical tool for driving prompt payments, attracting consumer-minded patients, and building patient loyalty.
Let’s look at two ways to make the revenue cycle patient friendly.
Patient Friendly Billing Solution #1: Patient-Specific Price Estimates
In 2019, the federal government ruled that hospitals must provide patients with standard charges for items and services offered. Many hospitals have pushed back, arguing that a chargemaster isn’t helpful because most patients won’t pay the standard charges due to insurance or self-pay discounts.
While these legal battles likely won’t be resolved anytime soon, the debate has provided useful insights into best practices for patient billing.
The ideal solution is personalized cost of care estimates, given prior to the point of service, that take into account the specific procedure, provider location, and the patient’s insurance coverage (including the deductible met to date). These real-time estimates give patients the information they really need and care about—their estimated out-of-pocket costs and what they can expect to see on their bill.
If patient-specific price estimates are not yet in reach, there are other, simpler methods that can enhance price transparency. These include listing the prices for procedures on the provider website and providing cost estimation calculators. This information should also be available by phone, as patients often call to get pricing information. It is better to start small by listing prices for even the most common procedures than to not offer any information at all.
Patient Friendly Billing Solution #2: Combined Guarantor Billing Statements
An exceptional patient billing process is one that is in alignment with the patient experience. This in turn drives prompt payments, which reduces collection costs.
One way to achieve this alignment is by creating a combined guarantor billing statement which is tied directly to all other elements of your self-pay collection efforts.
A true combined guarantor billing statement should include all balances owed by a consumer to a single health network, and should include both facility and professional charges spanning all facilities.
Health systems considering a combined guarantor billing process face an intimidating list of challenges. These can include technical challenges, such as merging data from multiple patient accounting systems which have no unique patient identifier, and political challenges such as how to prioritize allocation of patient payments.
RevCycle’s HealthCare Business Services (HBS) division has developed a custom software package which effectively overcomes these challenges. By accepting the native exports from each disparate HIS system, the HBS software is able to create a combined guarantor level account. This not only produces the combined guarantor billing statement, but also has the basis for a combined guarantor workflow. The result is that the overall patient responsibility balance collection efforts are in harmony with the patient’s experience.
Additional benefits of HBS’ solution include:
- The ability to place individual encounters or charge-lines on hold without impacting the entire billing process
- The ability to accept a single repayment arrangement from the guarantor and have that single payment automatically allocated to or split between the various patient account/system(s) according to any desired predefined rule set
- Providers are able to create a truly patient-friendly billing process by incorporating HFMA’s Patient Friendly Billing guidelines with the combined guarantor billing concept
- Improved statements provide increased marketing opportunities and improve patient satisfaction
You can learn more about our combined guarantor billing solution here.
Reap the Benefits of a Patient Friendly Revenue Cycle With RevCycle
From patient financing options to better billing, RevCycle offers a variety of solutions to increase cash flow, reduce collection costs, and improve patient satisfaction. Send us a message or call 888.576.5290 to schedule a phone consultation at your convenience. We’re happy to address any revenue cycle concern!