By Terry Rowinski, president & CEO, Health Payment Systems, Inc.
We’ve seen it time and time again—a patient receives services from an out-of-network provider at an in-network facility and is surprised with a huge medical bill months later. Since out-of-network claims can take much longer to process, the consumer often has forgotten the details of the service received and thinks all bills have been resolved, so the bill itself (not just its size) is unexpected.
According to JAMA Network, in the past two years, one in 5 insured adults had an unexpected medical cost due to seeing an out-of-network provider, and two-thirds of adults worried about affording unexpected medical bills for themselves and their families.
Another study, facilitated by the research institute NORC of UChicago, reported that out of 1,000 Americans surveyed, 57% received a surprise medical bill, most often resulting from physician services (53%), laboratory tests (51%), healthcare facility charges (43%), imaging (35%) and prescription drugs (29%). These surprise medical bills are the result of the lack of transparency throughout the healthcare system and leave consumers in the dark.
This blog details this important issue within the healthcare industry and country, as well as how we at HPS are addressing it.
Where the problem comes from
As an industry, we need to accept the reality that the surprise medical bill issue is further complicated by the fact that the entity an individual receives medical care from doesn’t supply all of the consumer bills. A single hospital or office visit could result in up to 10 separate bills, and patients largely have no visibility into the total cost until they receive these bills.
Why, though, are there so many bills for a single visit? Hospitals have multiple departments, physician groups and other entities, and often, each completes and files their own insurance claims and billing processes outside of the hospital. The issue is actually more complex than this, though—it isn’t just the hospital system that might be sending bills. Bills can be generated from multiple locations or entities, making the healthcare billing process more of an ecosystem.
Another reason that this problem is so huge is that there is not, currently, a widely-available solution to the problem, regardless of the use of transparency tools. Someone must actively take up the cause of communicating with the consumer truthfully and in a timely manner, which doesn’t often happen due to how many processes must take place before a consumer can be informed of final costs for healthcare visits, labs, nursing and more.
To help combat the frustration and stress that individuals and their families experience related to confusing and unaffordable medical bills, Health Payment Systems (HPS) has developed its proprietary SuperEOB® (explanation of benefits statement) solution along with various consumer advocacy services via their all-in-one platform.
HPS is a broad provider network offering the most effective independent provider network delivering significant savings and choices for self-funded and level-funded employees, including billing and collections. Their SuperEOB is an easy-to-read statement that consolidates all of an individual’s or a family’s in-network explanations of benefits (EOBs) and medical bills for an entire month in their digital platform, regardless of how many doctors were seen.
In attempting to find a solution to this problem, we must consider how traditional employer insurance holders get billed, how the payer or insurer level handles claims, and how individuals not utilizing traditional insurance plans can be helped.
How to resolve this issue
One possible solution is to create a billing mechanism that the consumer is familiar with, almost like a credit card bill. In this solution, bills would be consolidated into one statement, and consumers could easily understand how, for what, and to whom they owe money.
The solution needed would offer healthcare providers (who are independent of one another) the option of a singular, aggregated billing experience for healthcare consumers. It would give consumers the ability to see which entities have provided services, how those claims have been processed through insurance, and the total amount owed for all services—all in a single billing statement.
Having a more consumer-friendly consolidated billing system would provide the industry with the opportunity to better communicate with the consumer, and would increase the likelihood of bills being paid. In addition, if this system also offered consumers the ability to make payments online, bills would be easier to pay as well.
At HPS, we have actually provided an example of this concept within our broad, independent provider network in Wisconsin. By paying patient claims directly to the provide, aggregating all monthly medical charges for an individual or family into a single, simple bill, and providing various easy payment options (including online) for the consumer, we are able to increase the percentage of bills that get paid by 25-35%.
With our single-statement experience, the guesswork and waiting are taken out of paying medical bills. Rather, the consumer sees just one number they need to pay. This is proven to be a more efficient way to collect on medical bills—while the average hospital collects 50-60% of what they are owed, at HPS we collect over 85%. This translates into millions of dollars more collected over the course of a year.
This single-statement experience is not only beneficial for the consumer but is also beneficial for employers, brokers and providers alike in the following ways:
- Employers: Reduced time responding to billing inquiries.
- Brokers: Can offer a highly desirable service for their clients
- Providers: Eliminates billing and collections deliverables so they can focus on delivering quality care
Next steps for healthcare community
It is essential that the healthcare community provides an engaging and user-friendly way to create aggregate bills for consumers to eliminate the surprise medical bill phenomenon. The industry needs teams who can advocate for consumers while working to increase the percentage of bills that are getting paid.