According to CMS, the largest payer in the United States, patient experience is a strong indicator of healthcare value and therefore a criteria for financial reimbursement. While many interactions impact a patient’s experience, one of the most significant factors for patients is the billing and collections process. With patients shouldering more of the financial burden due to the prevalence of high-deductible insurance plans, people want to know their expected costs before they commit to a medical procedure so they can prepare or shop around for the best price.
However, because many health systems struggle to understand upfront medical costs, they can’t provide an accurate expense picture for the patient before or soon after a procedure. Complex costing systems that involve the health system and the patient’s insurance lead to unclear costs and unexpected financial statements long after a procedure is done, resulting in a less-than-ideal patient experience. With optimal billing and collections processes, organizations can inform patients about costs up front, enhance the patient journey, and maximize reimbursements associated with high-value care.
As health systems continually pursue new ways to improve the patient experience, they should have five elements in place that ensure patients understand their financial expectations early in the process and before a procedure:
A defensible pricing strategy (DPS) is the pricing explanation for a health system’s procedure and service prices. Activity-based costing software, such as the Health Catalyst PowerCosting™ application, allows organizations to establish DPS by helping them understand their exact costs for care delivery. When health systems proactively provide a breakdown of procedural costs and increase transparency into historically opaque healthcare expenses, patients are more aware of the value and financial expectations associated with the procedure cost and can make more informed decisions about their care.
A charge description master (CDM) is a comprehensive list of services, supplies, and drugs that the health system will bill to a patient or a patient’s insurance company. Organizations can invest in technology such as VitalCDM® to ensure their CDM stays up to date, is compliant, and reflects updated codes. The CDM ensures the health system accurately documents and codes charges, which in turn charges the patient or the patient’s insurance provider the correct amount. Alternatively, if health systems have an outdated CDM, they might charge for the incorrect procedure or use the incorrect code, which could result in an inaccurate patient bill. To provide the best patient experience, health systems can use their up-to-date CDM to charge the patient the right amount the first time, avoiding confusion or under- or over-paying for the procedure.
Often, health systems verify a patient’s eligibility for a procedure once it’s performed. The problem with this reactive process is that if the patient’s insurance company doesn’t cover the procedure, the patient must pay out of pocket and might not be financially prepared to do so.
To avoid springing surprise bills on patients after a procedure is done, organizations can use a real-time eligibility verification tool. This resource provides an instant review a patient’s healthcare plan, allowing the health system to contact a patient’s insurance company to verify if a specific procedure is covered. If the health system learns that the procedure is not covered and it’s not urgent, the organization can inform the patient, who can then shop around for the best rate, value, outcome, or explore other methods of payment. A proactive approach to eligibility allows patients to understand and prepare for their financial responsibility, avoiding surprise billing after a procedure.
Once health systems verify a patient’s eligibility, they can give the patient an accurate estimate of cost. An online patient cost estimator tool considers how much a patient has paid against their deductible to calculate the exact out-of-pocket patient cost for the procedure.
For example, if a patient’s deductible is $1,000, the patient cost estimator will provide the cost of the procedure (e.g., $300) and the amount the patient has already paid that year to date (e.g., $500). This way the patient knows how much she will have to pay out of pocket (e.g., $200). Increased specificity and context around a patient’s costs provide a premiere patient experience because health systems can inform patients of their total procedure cost versus their actual out-of-pocket cost based on their deductible.
Leveraging augmented intelligence-powered tools and expert guidance, such as Healthcare.AI™ by Health Catalyst and its data science experts, health systems can build predictive models that scour a patient’s payment history to predict the likelihood that a patient will pay (a patient’s propensity to pay). This allows healthcare providers to identify patients who are less likely to pay and offer them financial resources. For example, if a patient has a low propensity to pay, a member of the registration department could offer the patient a loan program, payment plan, or even a charity discount. Planning ahead helps avoid a poor patient experience, such as sending a patient to a collections company to make further attempts to collect outstanding balances. Such poor financial records can also impact a patient’s credit, making future purchases more difficult and ultimately erodes the patient’s healthcare experience. Using a propensity to pay tool up front can avoid these negative financial consequences and set patients up for financial success right from the start.
Billing and collections procedures can play a key role in a patient’s journey—from outlining financial expectations before a procedure to ensuring a patient has a realistic payment plan. Inversely, poor billing and collections processes, including surprise bills or inaccurate charges, can overshadow even the best care outcomes. To provide a best-in-class patient experience, organizations can implement the five mechanisms listed above and meet patients’ rigorous expectations around cost, billing, and price transparency.
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