Movement grows to simplify ‘confusing’ medical bills

Patient-friendly approach enhances hospital experience

In a drive to become more consumer-friendly, healthcare providers are starting to focus their empathy on an area that has been problematic for years – patient bills that are difficult to understand. Not only do hard-to-read statements frustrate patients, they are depriving healthcare organizations from collecting revenues that are legitimately theirs, financial experts say.

“I don’t think the healthcare industry has done a good job in assisting patients with bills,” says Ron Camejo, director of revenue management at Chadds Ford, Pa.-based IMA Consulting. “We’re still using language specific to our industry and language the patient doesn’t understand, especially the aging population. Consequently, our lack of processes on the front end let the patient skate through and shift to the back end so that patient accounting has become the department of corrections.”

With an increasing number of uninsured, under-insured and high-deductible health plans to process, hospitals are depending on patients for a larger percentage of revenues than in the past. Therefore it is in the provider’s best financial interest to clearly convey what each patient owes on the statement, Camejo said.

“It must be concise and easily understandable,” he said. “Providers also need to let patients know that they will work with them on establishing affordable payment schedules. This issue isn’t just about statements – it is about the entire experience.”

Valley Forge, Pa.-based PSC Info Group has turned creating patient-friendly bills into a full-time business. Mark Snow, chief marketing officer, says his company specializes in converting confusing statements into a format that is attractive and easy to read.

“You have to think of it from the patient’s point of view,” he said. “If I’m the patient, I want to understand the bill, I want it to be easy to read and presented in a way that draws my eye to the amount due and tells me exactly what I owe. If the bill does that, I am more likely to pay it.”

Like Comejo, Snow also believes that patient-friendly billing goes beyond the document itself.

“There are three things a patient takes away – were the caregivers nice, was the food good and is the bill simple to read,” he said. “If the answer is ‘no’ to any of those things, it wrecks your whole hospital experience. This is what causes the hospital A/R to go up.”

Revenue boost

Four years ago, Valley Presbyterian Hospital, one of the largest non-profit acute care facilities in Southern California’s San Fernando Valley, often missed out on payments for emergency department services because it didn’t have the tools for collection. So in 2008, the health system instituted MedAssets CarePricer Patient Liability Estimation Solution to generate patient-friendly estimates for patients entering the hospital on either an inpatient and outpatient basis.

Using “on contract” insurance plan data, CarePricer automatically calculates the patient’s payment responsibility, enabling hospital access staff to provide upfront estimates of personal financial liability. The system has been so effective that Valley Presbyterian’s monthly point-of-service collections rose 112 percent, translating into $1.5 million in cash flow per month.

“The entire revenue cycle continuum benefits from the increased employee focus on insurance and financial issues facilitated by the MedAssets solution,” said Paul Manganiello, the hospital’s director of admitting, community wide scheduling and privacy officer.

Anatomy of a bill

GreenField Health, a nine-physician group practice in Portland, Ore., has had a patient-friendly billing system in place for seven years. Using the GE Centricity platform, the practice revamped its statements to strengthen patient relations, said administrator Steve Rallison.

“Many physicians will get positive feedback from their patients about their personal and clinical skills, but will end up stubbing their toes on bills that are hard to understand,” he said. “People don’t understand the dynamics of their insurance and confusing bills end up causing a lot of angry phone calls. So we committed ourselves to be supportive and reinforce the strong relationship we have with our patients.”

The anatomy of a patient-friendly bill features a number of components, Rallison said.

“First of all, it has to be understandable, meaning that all the dates on the bill coincide with the services and descriptions of what was done,” he said. “Some bills are not friendly because the date listed may be when the charge was posted and does not correspond with the date of service. And while listing CPT codes offers more information, they are not helpful.”

Kim Nash, GreenField’s revenue cycle manager, added that in talking to patients, “they told us they need it in layman’s terms, so that anyone who looks at the statement gets the message.”

Another important element of the patient-friendly bill, Rallison says, “is no surprises. People hate surprises.” Therefore, the practice establishes a “relationship agreement” with patients “so that they know what to expect from us and we let them know what we expect from them,” he said.

GreenField’s patient-friendly billing method starts at intake, informing patients about the co-pay or deductible that they are responsible for upfront, Nash said. By giving patients the payment amount upfront, she said, they are more likely to pay at the time service is rendered.