By Edward R. Gaines III, JD, CCP, vice president of regulatory affairs and industry liaison, Zotec Partners.
The limited and under-resourced infrastructure established by the U.S. Department of Health and Human Services and the Centers for Medicare and Medicaid Services to determine the disputes between physicians and hospitals versus the health plans known as independent dispute resolution (IDR), established under the No Surprises Act (NSA), has been overwhelmed. We also know that a federal judge in Texas has twice adjudicated HHS’ regulations in the past year to be contrary to the NSA statute.
The court ruled in favor of the Texas Medical Association (TMA) on February 6, 2023. It stated that HHS attempted once again to place its regulatory “thumb” on the scales of justice in favor of the health plans, which violated the express provisions of the NSA. The statute authorizes HHS, the U.S. Department of Labor, and the U.S. Department of the Treasury to issue implementation regulations.
Tens of thousands of backlogged IDR adjudications were made worse when CMS announced an immediate suspension of IDR decisions in light of the second TMA court decision. Also, the February 24, 2023, CMS announcement of the restart of certain pending IDRs with dates of service before October 25, 2022 — the effective date of the HHS final rule which was vacated in the TMA II case — will only partially address the tremendous backlog of IDR cases pending final determination by the IDR entity.
There are two additional lawsuits against the administration’s bungled implementation of the “batching rules” and qualifying payment amount calculations (TMA III). The qualifying payment amount is the median allowed amount by the health plan as of January 31, 2019, adjusted for inflation. Additionally, with the exorbitant, nonrefundable, still unaddressed fee increases (TMA IV), there remain many unknowns and issues regarding the resolution of the pending IDRs.
After grossly underestimating the number of IDRs that HHS expected and, in consequence, creating an under-resourced IDR system, the NSA has become extremely costly for the health care system. With millions of dollars tied up in the IDR process, it is particularly devastating for physician practices. Millions more have been awarded to hospitals and physicians; however, based on feedback from clients and industry associations, most insurance carriers, adjudicated as the loser in IDR, still haven’t paid what is owed.
Below is a summary of the many important questions and outstanding concerns that remain unanswered with severe consequences for healthcare physicians and organizations.
By Joe McMurray, senior vice president of patient experience, Zotec Partners.
A July 2022 report confirmed what most providers have seen coming during this time of rampant inflation: Unexpected healthcare costs can be crippling for the majority of Americans. Many factors have influenced this fact, including rising high-deductible plans, ongoing pandemic stress, and the general truth that patients are often sick, scared, or confused — or a mix of all three. This strain poses many challenges for healthcare providers and their revenue cycle teams, highlighting the importance of patient-centric financial experiences.
Calculating cost estimates on unexpected medical encounters is a very challenging process, and if done so inaccurately, it can push patients to switch medical providers. According to PYMNTS, 46% of unwell patients have canceled an appointment because of high cost estimates, and two-fifths of patients who received inaccurate cost estimates spent more on healthcare than they could afford. Healthcare providers and organizations have seen drastic reductions in payment as a result.
Understanding Why Patients Don’t Pay
According to research by Debt.com, 45% of Americans have outstanding medical debt. Some reasons why patients can’t pay their debts includes financial hardship (which can be from job loss), murky healthcare billing systems, unexpected billings (especially during the holidays), and ambiguities with insurance. Inflation isn’t helping the situation, with almost 60% of people forgoing healthcare due to higher living expenses across the board.
Unpaid medical bills and their resulting medical debt are typically the outcomes of a combination of factors. First and foremost are unexpected healthcare costs, which is precisely what it sounds like: unplanned and unbudgeted medical expenses. The continued hike in high deductible plans and increased out-of-pocket expenses has also hit healthcare consumers’ wallets.
Additionally, uncertainty around billing is an issue for patients who need clarification on their responsibilities, billing due dates, or even which providers they saw during their encounters. Finally, technology can be a barrier to patient payments. When patients can’t access, understand, or act quickly on their bills, they are less likely to make a payment or pay in full.
Improving the Financial Experience for Patients
Health systems and clinicians shape patient care experiences, which can unfortunately lead to medical debt and devastating consequences in certain circumstances. So, what can healthcare providers do to alleviate these financial pressures for patients and set them up for success beyond diagnosis and treatment?
The first and most obvious response is to get the bill covered by the carrier prior to sending it to the patient. With advanced technology partners, this is a goal that should and can be explored. However, if there is still a patient portion, the following four steps will enhance the experience for all:
• Patient Education and Awareness
Healthcare organizations can help individuals make educated decisions about how to plan and pay for their care. Enhancing medical billing transparency means ensuring patients are aware of out-of-pocket expenses, including cost-of-care discussions in provider-patient interactions.
With the federal No Surprises Act in effect, patients now have increased transparency into what scheduled medical encounters cost. However, these estimates can only be accurate if no unplanned medical care or treatment is needed during service. By communicating up front with patients about additional costs, they will be more empowered when making healthcare decisions.
Once a patient receives a bill, it should be accurate, easy to understand, and convenient for them to take action.
• Payment Choices and Flexibility
Healthcare organizations can help patients with medical expenses by expanding, simplifying, and innovating payment options and plans. Offering more ways to pay based on patients’ preferences is essential, as is giving patients more time and flexibility. No two patients are alike, and based on their propensity to pay, providers can offer patients customized communications that offer payments through paper, phone, text, email, or portal access.
Offering payment plans is a proven way to increase collection rates. Patients who are offered additional time, even if it’s just a few weeks more, are more likely to make payments or pay their bills in full, reducing likelihood of medical debt. By adding a few more weeks to the billing cycle, providers can offer patients a more dignified and effective way to pay for services at a time most suitable for their financial situations.
• Compassionate Care Continuum
Healthcare expenses are a source of anxiety for many patients. Intimidating collection steps won’t do them any good, but a more compassionate billing approach could help increase patient payments.
Team members should utilize compassionate language as they guide patients through their journeys. When patients are confused, they should be met with a responsive contact center that leads with empathy and understanding. After all, calm patients feel more confident in their billing and are increasingly more vested in paying for the services rendered.
• Simple and Streamlined Technology
Providers should implement portals that make it easy for patients to pay bills, schedule appointments, review payment plans, and share feedback. Empowering patients with a self-service option enables greater transparency and customized experiences — all leading to higher payment capture.
By developing an extensive and dynamic patient journey by persona, organizations can customize communications by patient demographics and propensity-to-pay. This allows them to use the most innovative, intelligent means to request and receive payment. If providers don’t have a portal that meets these criteria, there are technology-enabled revenue cycle services partners that can further enhance the patient experience.
No two patients have the same pain points when it comes to medical expenses. And considering the economic landscape evolves daily, healthcare needs to be ready to adjust accordingly. Providers need to find flexible and intuitive ways to connect with patients and offer a variety of payment options to engage compassionately throughout the entire healthcare journey.
Americans collectively owe almost $200 billion in medical debt. With inflation rising, the cost of living increasing, and healthcare providers struggling to keep up with post-pandemic demand, this ballooning debt is causing patients and providers alike a lot of undue stress.
At the same time, the country’s medical debt collection processes are changing. In March, credit reporting agencies announced they will exclude all medical debt under $500 from credit reports by the first quarter of 2023. Furthermore, agencies will wait longer to report larger medical debts to accommodate patients who need more time to figure out and calculate their healthcare payment status.
Healthcare leaders are under pressure to make patient bill care easier and more transparent. They need ways to remain profitable while putting patients — and their financial well-being — first.
Why is prioritizing patient well-being such a challenge?
It’s clear that one of the healthcare industry’s priorities in the coming years must be making healthcare profitable for providers and affordable for patients. But what does this mean in practical terms? Why is this balancing act still so challenging for healthcare leaders?
For starters, the industry’s surroundings have shifted drastically in the last few years, and the economy has not lent itself to profitability or well-being. We’re living with a 40-year high in inflation, and deductibles are up without a match in salary increases. Patient payers are taking on more of the financial responsibility of their healthcare, and 49% of Americans wouldn’t be able to pay an unexpected $500 medical bill without going into debt.
This financial landscape is very real for patients, and stress is high. Emotional turmoil has always been part and parcel of healthcare — people are full of fear when they or their loved ones are sick and in pain — but stress is especially overwhelming now with medical debt carrying even higher stakes.
Patient expectations have also changed. They are seasoned digital consumers now with several choices in most areas of their lives. While people need a safe and clear healthcare experience, they also want a retail-like experience with the ability to choose their preferred methods for care, payment plans, and communication.
The American healthcare system has long been burdened by interoperability issues preventing easy access to and sharing of important patient health data. Amid the ongoing COVID-19 pandemic, those issues have created additional challenges for physicians, administrators, and other industry partners. If these problems persist, they could impact provider business models negatively.
Increased consolidation among physician groups during the pandemic has resulted in a corresponding increase in coding operations for many practices. Given the gap between the demand for coders and the trained talent available to meet that demand, organizations have increasingly shifted toward outsourcing to fill critical technical roles. The process of outsourcing these skills, combined with a surge in the number of labor hours needed to meet organizational objectives, could increase the time to code or decrease the quality of output, ultimately creating revenue cycle issues.
If not careful, staffing issues can cause fluctuations in data quality. With less personnel available to ensure the correct information is entered into the correct fields, some organizations have found it difficult to fully harness the power of healthcare solutions to streamline revenue management and operations. Moreover, understaffed facilities may struggle to make the changes to technologies and internal processes that would equip them to take advantage of government programs providing reimbursements for COVID patient care. New CPT codes for COVID have also required insurance companies to update their processes during the pandemic, adding complexities for providers in how quickly they can exchange medical information.
From a clinical perspective, the pandemic’s far-reaching impact on the healthcare system has manifested in the form of lost productivity, resource deprivation, HIPAA breaches, and other, often severe, consequences. However, the strain it has put on payers and revenue cycle management systems has been somewhat less visible from the public eye. In the concerted effort to support clinicians and mitigate the pandemic’s effects on frontline workers, the focus for getting the right data into the right hands to ensure services could be paid for in a timely manner was temporarily deprioritized. Unless these interoperability challenges are addressed as an industry, the cost of healthcare will continue to rise, as will the clunky experiences for both providers and patients.
The global healthcare analytics market is set to balloon to a value of $129.7 billion by 2028. It doesn’t take much digging to figure out why. Data analytics tools used in healthcare are invaluable assets for providers looking for ways to improve the patient experience, as well as their own bottom lines. These tools allow them to perform a wide variety of tasks — including risk assessment, debt reduction, and revenue optimization — in more streamlined, efficient, and accurate ways.
However, this growth has also come with a spike in analytics challenges. Many providers are overwhelmed by trying to understand and utilize all of the information that analytics tools deliver. Without a clear way to analyze the wealth of data collected, healthcare analytics can often seem like a job that providers don’t have the knowledge or bandwidth to take on. With the right revenue cycle management solution, healthcare practices can collect, digest, and react to data for the betterment of business.
Best Data Practices for Utilizing Healthcare Analytics
If you’re a provider who wants to make the most of the data you’re collecting and the analytics tools you’re using, here are four strategies that can help you better understand and translate information into consumable, actionable insights:
1. Configure data based on your priorities.
Part of the value of data analytics tools in healthcare is that they can be used to pinpoint information that’s important to your organization. To accomplish this, however, you need to figure out what key performance indicators are most valuable to you in advance and focus on measuring those specific numbers. Otherwise, you’ll end up spending too much time sifting through data in search of a needle in a haystack.
Let’s say that your main priority is reducing bad debt. You would need to make sure that you (or your outside partners) were using analytics tools to build reports around this data specifically. The relevant data should be front and center in your dashboard and easily exported so it can be shared with stakeholders.
We’re living in a world where consumers demand more from every transaction. Exceptional service is no longer a nice-to-have — it has become the status quo. Whether it’s a traveler paying for an Uber through an app or a patient receiving emergency department service, people want and have come to expect great service.
The healthcare industry is working to quickly adapt and meet these expectations as they come, often leading to a disheartening or unpleasant experience for patients. Why? There are complex infrastructure challenges in healthcare.
For example, consider the patient billing process: It may have stumbling blocks that can lead to friction, such as surprise at the final price when the medical bill arrives, limited bill payment options, insurance denials, or reduced coverages. These problems tend to come after patients receive clinical care, adding more stress on top of an already stressful situation. Essentially, people receive the care and treatment they deserve but could feel blindsided later because of a lack of price transparency.
That said, providers may not be in a position to have patient-focused financial conversations at every point of the journey from pre-registration through post-discharge. Often, providers are just as in the dark about what a procedure may ultimately cost patients out of pocket because data often is siloed within different systems. And even when those systems try to communicate, they don’t necessarily speak the same “language.”
Is the task of reinventing American healthcare billing a major undertaking? Sure. But improving the patient experience is still doable. It just requires every entity involved — from third-party payers to insurance companies to physicians’ offices — to treat patients while considering their perspectives and needs.
How to Overcome Barriers in Healthcare
Tackling this challenge now is key for a few reasons. First, providers will be able to more clearly empower patients to make the best decisions for themselves and their families. When healthcare providers operate with patient needs in mind, consumers feel less confused, more curious, and better equipped to make crucial health decisions.
Providers that offer simple billing and upfront costs analyses may also reduce patient noncompliance and nonpayment. When patients understand their financial obligations before receiving services, they can make better choices and plan ahead. The result? Healthcare providers will be able to stay in business and thrive.
With the advantages of taking a more patient-centered approach in mind, healthcare providers can take steps to make that approach a reality.