A stakeholder-led initiative presents best practices intended to provide guidance to provider organizations for discussing insurance coverage and financial responsibility for co-pays and deductibles with patients.
Determining when and how to speak with patients about their medical bills is often a tricky dilemma for hospital and health system finance executives who want to be sure their organizations receive payment for services rendered but who also know they can't risk appearing insensitive.
Last week, the Healthcare Financial Management Association released best practices for provider organizations to use when communicating with patients about their medical bills. These best practices are intended to provide guidance to provider organizations for discussing insurance coverage and financial responsibility for co-pays and deductibles with patients.
Joseph J. Fifer, HFMA's president and CEO recently told me that he sees the best practices as a "patient-centric effort" to make the process of paying for medical care easier to understand.
"Anybody who has gone through the revenue cycle process either for themselves or for a loved one knows it is very complex and hard to understand. It's bewildering because of the level of complexity," he says. "If you add to that a lack of any real standards or criteria for how providers communicate with patients about bills, it yields a lot of diversity and inconsistency around the industry, and that just adds to the confusion for patients."
"Every environment is a little different, but if the industry can rally around a set of common ways to go about having these conversations, it will be a step toward making it more understandable for patients," he adds.
Outlined in the new protocols are guidelines for:
- Emergency department interactions. This best practice provides the needed guidelines for dealing with financial interactions with patients who present in the emergency department.
- Time of service (outside the ED) interactions. This set of best practices provides the needed guidelines for handling financial interactions with patients that take place at the time of service, outside the ED.
- Advance of service interactions. This set of best practices provides the needed guidelines for managing the most sensitive financial interactions with patients that take place in advance of service.
- Best practices for all patient financial interactions. This overarching set of best practices provides the needed guidelines to help provider organizations handle the most sensitive financial interactions with patients.
- Measurement criteria. These criteria were developed to guide organizations in the evaluation of their staff training, use of technology and metrics, and compliance with patient financial best practices.
Fifer says providers are likely to follow these guidelines because adherence will lead to increased patient satisfaction if "we can make the process more understandable. People may not like the level of their deductible, but if they understand it early in the process, there will be higher patient satisfaction."
The best practices will also help providers determine if a patient is eligible for charity care, thereby saving the resources that otherwise would have been spent on collections efforts, Fifer says.
"We have evidence to suggest that providers who have already adopted these best practices have increased point-of-service collections, but it is not just about collections. It's about getting the patient into the right situation. If having that conversation early on enables a provider to know that a patient is eligible for charity care, they won't have to go through the whole billing process," he says.
The new practices were developed by a steering committee that includes leaders from HFMA, the Patient Advocate Foundation, the American Hospital Association, Harvard Medical School, America's Health Insurance Plans.
Pat Keel, senior vice president and CFO at Good Shepherd Health System in Longview, TX, was on the steering committee and says the experience was "eye opening" because so many constituencies were represented.
"It was really interesting to hear people's perceptions of what conversations should take place and when," she says.
From her vantage point as a healthcare leader responsible for the financial health of her organization, Keel believes there is a lot of value in the guidelines.
"Hospital billing and collections is very complex, and the more you standardize the process, the more confidence the patient will have," Keel says, adding that the new standards will also encourage hospitals to step up their game when it comes to educating and retaining staff.
"I think the best practices are helpful. I think they put a higher burden on hospitals to train their staffs better. Those jobs are typically entry level, and the turnover rate is high," she says.
It's important to speak to patients about their medical bills while they are still in the hospital, particularly to determine if they are eligible for financial assistance, Keel says.
"I have found that by having that conversation earlier it helps me understand that patient's ability to pay," she says. "Once the patient leaves, it is almost impossible for me to connect with them. The sooner I understand their ability to pay, the easier it is for me to come up with a solution and get that balance paid."
Keel says the steering committee started by talking through several scenarios for discussing medical bills with patients and went from there to establish the best practices.
"Once we came up with ground rules around how you should deal with patient balances and where, a subgroup was formed of hospital registration people. That subgroup ironed out some of the details, which came back to the steering committee for review. Then, it was put out for public comment, and we did receive substantial comments."
Keel says response from the provider community to the idea of standardizing communications practices around patient medical bills has generally been encouraging.
"I think to a large degree the reaction has been positive," she says. "Hospitals are looking for ways to have better clarity and direction on how to deal with patients, particularly in sensitive situations."
For his part, Fifer believes it is good for hospitals to have a greater awareness of how difficult it can be for patients to understand the payment process.
"It's difficult for us to navigate through the revenue cycle process, and we're in the industry, so imagine what it's like for the vast majority of the community. It's overwhelming if you've never been around it before, which is why it is important to provide some upfront, clear, understandable communication with patients."
Fifer also notes that the release of the best practices was not timed to coincide with the rollout of health insurance exchanges.
"There really is no linkage with the Affordable Care Act," he says. "These best practices work in any environment and with any payment mechanism, [and] any insurance coverage whether it's Medicare, Medicaid, employer-based insurance, or patients who are not insured. The timing was such that it was a body of work we were anxious to get done and get out there, and by chance, it happened when the exchanges went online."