Posted on August 18th, 2022.

Patients always come first in healthcare. However, patient-first billing is still a relatively new concept for provider organizations.

“Self-pay A/R is really shifting with high-deductible health plans,” explains Adrienne Rhodes, director of patient revenue cycle at the Massachusetts-based health system. “Before people used to say, ‘It’s just self-pay.’ Now, we are really paying attention to self-pay.”

Patients are owing more for their healthcare services compared to years past. In addition to premium increases—some of which individuals have to cover after employer contributions—patients are also facing higher deductibles, according to research from the Kaiser Family Foundation.

The average deductible stood at nearly $1,670 for a single individual in 2021, the most recent year for which researchers had complete data. That year, 85 percent of covered workers were subject to a deductible through their employer-sponsored health plan.

Together, the growing share of workers with deductibles and the average cost of those deductibles have increased the burden of deductibles by 92 percent across all covered workers, Kaiser Family Foundation reported.

Deductibles have added to the already complex patient financial responsibility landscape in which patients are also responsible for copayments, coinsurance, and other cost-sharing arrangements with their health plans. The burden has been felt by both patients and their providers.

Provider organizations have long established workflows for submitting claims to payers and getting the bulk of their revenue from those companies. Now, organizations are having to focus more on the self-pay side of the business in order to keep their revenue cycles running smoothly.

Beth Israel Lahey Health has been noticing this shift and has implemented patient-first billing strategies to increase self-pay collections while improving patient satisfaction.

CHALLENGES OF PATIENT-FIRST BILLING

Less than half of healthcare consumers understand their medical bills, according to a 2020 survey. What’s more, about half of consumers responding to the survey also said they pay their medical bills late, with many citing confusions as a reason why.

About 37 percent of respondents said they did not think they would be responsible for the charge, while one in five said it was unclear how much they owed. Other reasons included the bill amount being wrong, that they forgot to pay, and that they were unsure when the payment was due.

Most patients want simpler medical bills and to understand what portion of care they are financially responsible for. New federal laws and regulations are trying to give healthcare consumers just that.

Per CMS policy, hospitals must now post a list of all their charges, including gross and payer-negotiated rates, as well as provide a consumer-friendly list of a couple hundred of its schedulable services. The No Surprises Act, which went into effect this year, is also shedding light on healthcare prices by requiring hospitals to provide good faith estimates, among other requirements.

“The No Surprises Act has been extremely challenging,” Rhodes says. “It's geared to patients, which we understand, but it really does not take into consideration a lot of the nuances or responsibility of an employer or the patient in choosing a health plan or the health plan in general. The burden is lined solely on the provider and it's been very resource heavy to comply. We've really been jumping through hoops.”

Hospital price transparency as defined by federal regulation is also a major obstacle for providers.

“Patients are asking for price transparency, but they want to know their specific out-of-pocket costs, not what our gross charges are,” Rhodes states. “Our gross charges are typically irrelevant to the patient because it’s not actually what they are going to pay if they have insurance. The price transparency regulation doesn’t address that though.”

“Some patients are still shocked when they get a bill because they may not have met their deductible yet or they have now met their deductible in one fell swoop.”

Rhodes maintains that the onus should be on payers to deliver more transparency on patient out-of-pocket costs, especially considering how complex it can be to determine an individual’s patient financial responsibility.

“On top of the deductibles, coinsurances, copayments, then there is tiering, which adds a whole new level of complexity, as well as out-of-network coverage, which can spin a patient’s coinsurance in one way or the other,” Rhodes adds. “How do you help a patient navigate that though?”

Rhodes hopes federal and state laws will start to address this complexity of contracting so patients get the pricing information they truly want and need to pay their medical bills. Until then, Beth Israel Lahey Health is making some changes to its patient billing processes to ensure the patient comes first.

MAKING PATIENT-FIRST BILLING HAPPEN

Despite facing challenges, Beth Israel Lahey Health has put several strategies into place to make patient-first billing a reality.

Education is a staple of patient-first billing strategy at the health system, explains Rhodes.

“It’s really about educating people and putting staff in the clinics who understand EOBs and benefits and can explain those to patients,” Rhodes says. “They try to do a better job educating while performing a more immediate job in financial clearance.”

The patient revenue cycle team has also done a lot of work around notifying patients about price and network status in light of the No Surprises Act. Staff provide patients with consent forms and good faith estimates as required by law. But they also make sure to notify patients through the patient portal.

“At the point of scheduling in our system, as soon as an individual selects a plan and a location, they are prompted with certain messages, such as whether they are within their plan’s network,” Rhodes elaborates.

The only downfall right now is that the system nor staff can talk actual patient financial responsibility at the point of scheduling. Whether a person has to pay down their deductible or owes coinsurance is determined later on because of the complexity of contracts in healthcare.

“We are doing our best to resource screenings and estimates pre-service, but it’s a real shift in thought and isn’t an exact science because we don’t always know the exact charges until it posts from us,” Rhodes says.

While Beth Israel Lahey Health’s patient revenue cycle team is doing its best to fill price transparency gaps through patient education, the health system is also leveraging technology to make payment easier for patients.

“Using AccessOne, we send out secure mobile links to patient statements,” Rhodes states. “The patient can then pay on their phone using one-click payment and whatever payment method on their phone. We layer that on top of existing processes, such as opting everyone into paperless billing.”

Paperless billing cuts down on the amount of manual work in the revenue cycle but the health system has a safety net for patients who do not respond to electronic communications. If patients don’t open the text with the secure link to their statements or they do not open the statement through the patient portal within 30 days, then they receive a paper bill.

However, Rhodes points out that the health system has had tremendous success with text-based billing since the start of the pandemic.

“People are getting more used to this technology,” Rhodes explains. “We saw success with our post-service payments, so we’ve started to use text messaging for estimates and other quotes. We have the portal so patients can also log in, we push out a custom estimate and the patient can pre-pay on their phone.”

The strategy has led to a 10 percent increase in self-pay collections. Rhodes attributes the success to ease of use.

“There’s no way to pay a bill without having a number, which is cumbersome,” Rhodes explains. “You might get an email, click on it, and be prompted to input your username and password. However, you forget your credentials, so you stop the payment process right there. Or perhaps you need the account number from the bill or guarantor number.”

“With our text messages, the secure link only asks you to confirm your date of birth. Once you do that, you can pay for the bill on the web. We get to make it easier for patients to pay us.”

The convenient payment options offered by Beth Israel Lahey Health are part of the health system’s plan to create a more Amazon-like experience for patients.

“People use Amazon because everything is saved, it’s easy, it’s clear,” Rhodes states. “You click one button and the transaction is complete. Wouldn’t it be nice if healthcare was like that? It doesn’t solve the complexity of contracts, but it helps with patient experience.”

Moving forward, Rhodes is looking to create a more retail-like experience where appropriate. For example, smaller payment plans for bills meeting a dollar threshold. The plans would look like new retail payment options that allow consumers to pay for a larger order in three or four installments instead of all at once.

Revenue cycle leaders may never have thought ten years ago that they would be in the business of online payments and payment plans. However, the rise of self-pay is pushing providers to modernize the patient experience through technology and process. It certainly has its challenges but its all part of a larger cultural shift.

“Healthcare has always been behind in the technology space, especially in the patient financial experience realm,” Rhodes states. “It was unheard of to use payment methods like Google Pay or Apply Pay, but now people are realizing that you have to treat it more like a business and patients are demanding this kind of functionality. There is a culture shift shoving us in that direction, and we’re really about to get some more patient satisfaction out of it.”

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