Hav­ing that talk about money with pa­tients

Modern Healthcare - - NEWS - By Dave Barkholz

The Caroli­nas Health­Care Sys­tem is pretty av­er­age in get­ting pa­tients to pay their out- of- pocket costs.

The 40-hos­pi­tal sys­tem based in Char­lotte, N.C., col­lects 30% to 40% of the to­tal bill that pa­tients have to shoul­der be­fore their high-de­ductible in­sur­ance kicks in or af­ter their in­sur­ance pays its share.

“It’s an ever-in­creas­ing prob­lem,” said Chris John­son, vice pres­i­dent of rev­enue cy­cle man­age­ment at Caroli­nas Health­Care.

More and more, health sys­tems such as Caroli­nas Health­Care and Gwin­nett Health Sys­tem in Lawrenceville, Ga., are re­ly­ing on rev­enue-cy­cle tools to get good cost es­ti­mates to pa­tients so spe­cially trained staff can walk pa­tients through pay­ment op­tions.

Ideally, providers should col­lect as much of a pa­tient’s out-of-pocket cost as pos­si­ble be­fore de­liv­er­ing care, hos­pi­tal ex­ec­u­tives say.

It’s not an easy bat­tle, though. Caroli­nas Health­Care col­lects just 3% of all its pa­tient rev-

enue up­front, but not for lack of try­ing, John­son said.

The health sys­tem has a staff of more than 30 peo­ple who reach out to all pa­tients sched­uled for in­pa­tient care and high-cost out­pa­tient care, such as surg­eries, John­son said.

Those pa­tients are en­cour­aged to pay any out-of-pocket re­spon­si­bil­i­ties over the phone when they regis­ter and re­ceive pre-hos­pi­tal in­struc­tions, he said. “We ask how they plan to pay for service,” John­son said.

When reg­is­ter­ing pa­tients for treat­ment, au­tho­riz­ing their in­sur­ance if they have it, es­ti­mat­ing their out-of-pocket costs and billing them, hos­pi­tals in­creas­ingly are turn­ing to soft­ware as a vi­tal tool in the ef­fort to get paid.

Caroli­nas Health­Care uses soft­ware by rev­enue-cy­cle ven­dor Re­condo Tech­nol­ogy to ac­cu­rately es­ti­mate what the pa­tient will owe out-of-pocket given his or her in­sur­ance and de­ductible sta­tus.

The sys­tem is not in­sen­si­tive to pa­tients’ loom­ing de­ductibles, which of­ten run $3,000 or more, John­son said.

But hos­pi­tals still face the re­al­ity that their bills must be paid. Fail­ing to col­lect pa­tients’ out-of-pocket share costs hos­pi­tals na­tion­wide bil­lions of dol­lars, and the sit­u­a­tion prom­ises to get worse, said Eric Boggs, a prin­ci­pal at Crowe Hor­wath. Ac­cord­ing to the con­sult­ing firm, providers col­lect on av­er­age just 30% to 40% of all out-of-pocket med­i­cal costs in­curred by pa­tients.

Out-of-pocket costs rep­re­sent 11% of to­tal bill­able in­pa­tient costs and a much larger 27% of out­pa­tient costs, Boggs said.

In the short term, that’s a dou­ble whammy for pa­tients as they face higher de­ductibles and the in­dus­try’s shift to pro­mot­ing out­pa­tient care. The de­liv­ery change will save health­care sys­tems money, he said.

But for now, un­paid bills from pa­tients with in­sur­ance are “be­ing am­pli­fied by the move to out­pa­tient” care, Boggs said.

ZirMed, a rev­enue-cy­cle man­age­ment and data an­a­lyt­ics com­pany that is merg­ing with Nav­i­cure, is slightly more op­ti­mistic, find­ing that hos­pi­tals get paid about half what pa­tients owe out-of-pocket, ac­cord­ing to CEO Tom Butts.

In 2016, for the first time, more than half of all work­ers (51%) with sin­gle cover­age faced a de­ductible of at least $1,000, ac­cord­ing to the Kaiser Fam­ily Foun­da­tion/ Health Re­search & Ed­u­ca­tional Trust. And 29% of work­ers were in high-de­ductible plans com­pared with 20% two years ear­lier.

For the av­er­age fam­ily buy­ing in­sur­ance on mar­ket­place ex­changes, the de­ductible this year is a whop­ping $8,232, ac­cord­ing to a new study by West Corp., a com­mu­ni­ca­tion and net­work in­fra­struc­ture com­pany.

West’s re­search found that 56% of U.S. res­i­dents de­lay pay­ing their med­i­cal bills, in large part due to high in­sur­ance de­ductibles and con­fu­sion re­gard­ing in­sur­ance cover­age.

At the same time, hos­pi­tals need to del­i­cately bal­ance pro­tect­ing their bot­tom lines and watch­ing out for pa­tient con­cerns. Consumer ad­vo­cacy groups over the past few years have ramped up crit­i­cism of health­care bill-col­lec­tion prac­tices. In a study last April, the U.S. Pub­lic In­ter­est Re­search Group and the Fron­tier Group claimed that nearly 70% of peo­ple com­plain­ing to the fed­eral gov­ern­ment about med­i­cal debt col­lec­tors con­tended they didn’t ac­tu­ally owe any money.

A lack of com­mu­ni­ca­tion with pa­tients is con­tribut­ing to the prob­lem. The West survey found that 36% of providers never dis­cuss a pa­tient’s abil­ity to pay prior to de­liv­er­ing ser­vices and just 23% make it a habit to al­ways dis­cuss each pa­tient’s abil­ity to af­ford the care.

Even fewer, 15%, ac­tu­ally call, text or email pa­tients with the in­for­ma­tion to pre­pare them for their re­quired pay­ment.

“By send­ing pa­tients pre-billing mes­sages, providers can en­sure pa­tients know when to ex­pect a bill, what por­tion of the bill is cov­ered by in­sur­ance and the amount the pa­tient is re­spon­si­ble for pay­ing out of pocket,” ac­cord­ing to the study.

Gwin­nett, a two-hos­pi­tal sys­tem that has agreed to merge with gi­ant North­side Hos­pi­tal in At­lanta, finds that most pa­tients today don’t meet their de­ductibles un­til about June, so they are on the hook for pay­ments, said Cathy Dougherty, Gwin­nett vice pres­i­dent of rev­enue cy­cle.

The health sys­tem has five fi­nan­cial ad­vo­cates who call non-emer­gency hos­pi­tal pa­tients fac­ing high-cost pro­ce­dures and di­ag­nos­tics, such as MRIs, CT scans and surg­eries, Dougherty said.

Gwin­nett uses Re­layHealth’s Clear­ance es­ti­ma­tor tool to ac­cu­rately as­sess each pa­tient’s out-of-pocket costs and abil­ity to pay given the per­son’s fi­nan­cial his­tory.

While no one likes high out-of-pocket costs, un­ex­pected bills are even less pop­u­lar. “We don’t want pa­tients to be sur­prised,” Dougherty said.

Gwin­nett of­fers pay­ment fi­nanc­ing op­tions from Char­lotte, N.C.-based Ac­cessOne, which pro­vides pa­tients with a 40% dis­count on their bills if they pay at the point of service and an in­ter­est-free op­tion with a 10% dis­count if they pay in full within a year. A rule of thumb is that pa­tients will fall in four cat­e­gories for time­li­ness of pay­ment, Dougherty said. One group pays right away, one group needs a lit­tle more time, the next re­quires a call or two, and then there are the peo­ple who don’t in­tend to pay.

Gwin­nett uses a ven­dor for outreach to the fi­nal group; the ven­dor rep­re­sents it­self as the hos­pi­tal in try­ing to col­lect pay­ments, Dougherty said.

The rev­enue cy­cle soft­ware iden­ti­fies the hard cases us­ing pre­vi­ous ex­pe­ri­ences with the hos­pi­tal and other fi­nan­cial in­di­ca­tors. The ven­dor, which Dougherty stressed is not a col­lec­tion agency, of­fers the same kinds of fi­nan­cial as­sis­tance and pay­ment plans to get pay­ments made.

Dougherty points to prac­ti­cal and per­sonal rea­sons why Gwin­nett is in­tense about shar­ing out-of-pocket cost in­for­ma­tion with pa­tients.

Her prac­ti­cal side knows that pa­tients who are told up­front, be­fore pro­ce­dures, what they will owe are more likely to pay their bills and have a bet­ter cus­tomer ex­pe­ri­ence.

From a per­sonal stand­point, Lawrenceville, Ga., is a town of about 31,000 peo­ple, and she doesn’t want to run into some­one who feels blind­sided about the costs of care.

“I see peo­ple at the gro­cery store,” Dougherty said.

For the av­er­age fam­ily buy­ing in­sur­ance on mar­ket­place ex­changes, the de­ductible this year is a whop­ping $8,232, ac­cord­ing to a new study by West Corp., a com­mu­ni­ca­tion and net­work in­fra­struc­ture com­pany.

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