Push for simplified hospital billing can improve collections, experts hope

Healthcare providers are are trying to simplify medical bills as better price transparency and simplicity is expected to drive higher rates of collection. However, while the intention is there, providers still have a long way to go, experts say.

Today's billing scenario goes something like this: Patient X is stricken with a medical malady that requires surgery. Multiple tests are performed, the surgery is completed, and Patient X is discharged to recover at home. A litter of bills fill his mailbox -- one for each of the tests performed, one for the surgery, etc., and the patient, confused and surprised at his level of financial responsibility, throws his hands up in the air and says, "I'm confused. I'm overwhelmed. I won't pay."

But since many hospitals around the country are already struggling with bad debt, that scenario will only make things worse.

[Also: Doctors want new tech to help with billing, AMA survey finds]

"The numbers continue to increase in the amount of bad debt out in the market," said Beth Griffin, chief marketing officer for Health Payment Solutions, which offers hospital billing services. "High deductible plans are growing at an exponential rate, out-of-pocket expense for the consumer is growing, and that's a challenge for many consumers in the market: To understand their bills and make a payment."

Many providers envision the "single bill" model as the best way to counteract this.

"Sending them a complete bill really helps the patient truly connect those services to the outcomes of their liability," said Euthemy LeBrew, vice president of revenue cycle management at University Hospitals of Cleveland. "Often patients are confused. We hear, 'I've already paid that bill,' and they're not necessarily connecting that there was a whole other portion to that bill. This helps them see their entire responsibility."

It isn't just about the bill, though. It's about communicating with the patient, being transparent, and letting them know early in the process what their financial obligation is going to be, said LeBrew.

"What helps to improve the collectibility of the outcome is early notification, having a consolidated view of patient liability … and understanding what it is that helps the patient better prepare for the service and better prepare for how they want to meet their obligation," she said. "The bill shouldn't be the first time they see their entire responsibility."

In some ways, focusing on patient communication becomes easier when there's a robust health system in place to provide training and resources, and in that sense, said LeBrew, some of the mergers and acquisition activity in healthcare can actually help in this regard. Many physicians are moving from private to independent practices and joining a large healthcare system. And as systems merge, patients view them as one large entity due to single-branding and standardization of care.

[Also: Price transparency a struggle, even among states which offer option for price comparison]

"As reimbursement is moving toward more bundled, global risk-sharing models, in those mergers and acquisitions … the outcome of all that is looking to consolidate that in your financials with the patient," said LeBrew. "The industry is organically continuing to move in that realm. Patients are no longer associating a single doctor they see as a standalone doctor. They're associating them a single entity, a single brand."

With the muscle of that brand, a health system can develop a full strategy -- from the back-end to the front -- for engaging the patient early in the process and reducing the amount of bad debt. Providing patients with early and easy access to financial counseling and transparency is key, and that involves having conversations with those LeBrew calls the "front-end gatekeepers," those who meet with the patient at the point of service.

It's difficult to do that with every patient who walks through the door. But University Hospitals of Cleveland, which is just now beginning to move toward a streamlined billing solution, is trying to do just that.

"We've definitely seen a significant improvement in our collectibility where we've started to implement those up-front strategies: educating the patients on the outcomes of the service from a financial perspective," said LeBrew. "There's some expectation that you're helping them understand the benefit -- what the outcomes are going to be, what's covered and what's not, so they're better prepared through the process."

LeBrew said the reconfiguring of the collections strategy includes a mix of in-house overhauls and outsourced services. Any changes at the point-of-service interaction is typically an in-house affair.

"Once you get to the point of billing, you have many options on what you can do so send that bill and offer online solutions. There are many great services and solutions available through vendor relationships, and they make available to you other solutions, online solutions, which are very effective in terms of collections."

Some of those vendors have even been recognized by the U.S. Department of Health and Human Services, which on Sept. 30 announced the winners of a challenge called "A Bill You Can Understand." The winners, RadNet and Sequence, will have their medical bill designs tested out by six major health systems.

[Also: HHS picks winners in medical bill contest]

Los Angeles-based RadNet won for the easiest bill to understand, with a bill HHS said is "as concise as possible." RadNet provides adaptable bills that line up with the patient's current experience, including options for uninsured patients and for patients who are past due on payments. It makes uses of specific colors to make it easier for patients to locate specific information, clearly laying out payment due, payment options, insurance details and more.

San Francisco-based Sequence is the creator of Clarify, an online and app-based service that takes a consumer-based model to showing healthcare services -- enabling patients to search, browse, weigh their options, compare prices and decide payment methods.

Health Payment Systems, meanwhile, has been operating primarily in the Wisconsin market, but is looking to expand on the strength of that very model. Griffin's data on collection rates in that state's market suggest dramatic improvements in hospitals' ability to collect from patients.

"People understand their bill, so they're more willing to pay it," said Griffin. "People who pay can vary between 50 and 60 percent, and we're seeing an average of 80 percent. There's a reduction in cost, too, not having to mail multiple statements."

In the future, Griffin sees a bill that's even simpler: more white space, clearer, and with simplified definitions of the terms that are on the statement.

LeBrew envisions a landscape that resembles retail in many ways.

"One thing we think is going to happen over the next few years is proactive price transparency -- the ability to be online in a mobile and private state, and shop and see prices just as you would through retail," she said, "and to be able to calculate and understand your out-of-pocket and determine when you want to have those services. Branding would be very important at that point. That's where we're headed."

Twitter: @JELagasse