The following is an important excerpt from the recent HFMA report:
Calculating and Communicating Patient Financial Responsibility.
How can point-of-service collection be considered a success if you don’t collect? Just ask Lorraine Schnelle, executive vice president, Bridgefront, whose organization provides online training in revenue cycle management, among other training topics for healthcare providers.
To Schnelle, a POS collection encounter can be successful even if you don’t get a dollar, “as long as the patient walks away from the registration desk understanding why he or she owes that $200 and thinking about how to pay it. You can still feel that you’ve done your job simply by educating customers about their financial responsibility.”
It’s not that the money isn’t important. It’s that, at this particular historical juncture, as consumerism takes hold in health care and individuals are being asked to shoulder a greater portion of the financial burden—including rising deductibles and copayments—the conversation about the money is almost equally so.
These days, hospitals must be prepared not just to deliver accurate and timely information about a consumer’s benefits on the spot (itself no easy trick), but also to explain that information in terms that make sense to the consumer, to listen to the consumer’s response and react appropriately, and then to bring the conversation to a close that satisfies both parties.
Multiple challenges
Providing real-time estimates of out-of-pocket expenses—and experts agree that’s what patients really want, that hospital charges are not as important—is a highly complex business. It requires hospitals to pull together into one figure information from distinct databases on patients, payers, and providers, including the interaction of insurance contracts, individual benefits, specific medical conditions, expected treatments, physician preferences, and discount policies. Copayments are pretty cut-and-dried by now, notes Schnelle. “Generally the information is either right on the insurance card or you can access it with an online tool.” Co-insurance and deductibles pose more of a challenge because the information is more fluid, and this is where many hospitals are struggling right now. Then there’s the balance due from past visits, which some hospitals throw into the mix and others don’t.
Technology can go a long way to help find and fit the different pieces together. Automated tools can enable hospitals to track and match benefit information—including coverage, rules, exclusions, limitations, copays, and employment status—identify eligibility for financial assistance, and calculate charges. But technology is not a panacea.
“There’s no one-stop shopping yet—no tool that can access every third-party payer database without the need for workarounds,” observes Schnelle. “Even with HIPAA [Health Insurance Portability and Acountability Act of 1996], the consistency and uniformity of transactions haven’t spread to all payers. Depending on the market, finding a workable solution can be very resource intensive. And some smaller hospitals may not be in a position to invest in the tools that are available.”
The complexity of information exchanged external to the hospital also presents its difficulties, as Schnelle notes. “Is communication between the employer and the third-party payer timely, so that you know who actually is eligible for benefits at a given moment? How fast are other providers submitting claims on that patient’s coverage? What is the effect of the adjudication process? These will all affect the quality of information the hospital is working with,” she says.
On the people side of the equation, the challenges are almost as daunting. Typically, hospital employees in positions of direct contact with patients about financial expectations are considered entry-level, have only a high school education, and are paid relatively low wages (for example, making between $9 and $12 an hour in the Phoenix area). As a result, turnover is often high and communication skills low among scheduling and preregistration staff. Turning this situation around—attracting, training, and keeping better qualified people—is a costly undertaking.
It’s natural to wonder: Is it worth all of the expense and effort required to provide cost estimates, to ask consumers to pay what they owe up front, and to educate them about healthcare finance?
To find out more, read the report in its entirety here.
Address Patient Responsibility with Clarity and Compassion
