As deductibles increase, patients need help planning ahead for healthcare costs.
This is an excerpt from the ebook “The Patient Costs Playbook: When High Deductibles Turn Patients Into Payers”. Click here to read the complete ebook.
The lack of transparency in medical billing is difficult for patients who struggle to pay, but in the end, it also hurts healthcare providers who struggle to get paid. In 2018, community hospitals reported $41.3 billion in uncompensated care, which represents a 30% increase from 2006 when average deductibles for employer-provided plans was 250% less.
Who Needs an Estimate?
When patients understand their financial obligations, they’re more likely to make good on their debts. While you can’t anticipate every out-of-network charge or unexpected facility fee, you can give patients your best estimate to help them plan ahead.
Ideally, you should give every patient an estimate for out-of-pocket expenses before treatment. But if you need to prioritize staff time, focus on:
Patients with high-deductible plans.
For 2020, the IRS defines a high-deductible health plan (or HDHP) as “any plan with a deductible of at least $1,400 for an individual or $2,800 for a family.” Because their deductibles are higher, patients with HDHPs are more consumer-minded and may want an upfront estimate as well as a breakdown of different (see also: more affordable) options for care.
Patients scheduled for high-ticket services.
Prepare estimates not only for those with the most expensive conditions facing the most expensive procedures but for anyone in need of a procedure over a certain cost threshold.
Patients with a poor payment history.
Research shows the higher a patient’s outstanding balance with their primary care provider, the less likely they are to return for care within the next 24 months. Everything you can do to help them understand their financial obligations will improve not only your collection rates but also patient outcomes and satisfaction.
What Will Affect the Accuracy of Your Estimate?
While it’s possible to provide average charges for expected services, it’s impossible to provide a breakdown of actual costs before a procedure. Let patients know your estimate is just that—your best approximation of costs. Many factors may affect the accuracy of an estimate, including:
Different services performed at the time of treatment.
Doctors make diagnoses and order treatment based on available information. During the course of a procedure, new information or an emergency situation may result in different (or additional) services that weren’t anticipated—and that will nullify your estimate.
Changes in benefits between verification and estimate.
Despite the best efforts of your front office staff to verify and re-verify eligibility, benefits can change quickly and unexpectedly. If a patient loses their job, gets divorced, or if their employer switches health plans without advance notice, your estimate won’t reflect these changes.
Not using the right allowables, modifiers, or other discounts.
Allowed rates differ for every health plan, so make sure you’re using the right allowable for the right plan based on your most recent payer contract. Additionally, modifiers provide a way for physicians to indicate how a procedure was altered. Using them correctly is critical for preparing accurate estimates, and for ensuring you don’t lose revenue for services provided. If you offer discounts for cash or upfront payments, be sure your estimate communicates to patients that they could pay less if they opt for these incentives.
Transparency Increases Trust
HDHPs and HSAs were intended to increase patients’ awareness of healthcare costs, as well as their willingness to shop around for more affordable care. But without cost transparency, it can be difficult for even the most conscientious patients to meet their financial obligations. As a healthcare provider, anything you can do to help patients understand what they owe, and make it easier to pay, will be mutually beneficial for your patients and your practice.
To learn more about increasing cost transparency for patients, download our ebook, “The Patient Costs Playbook: When High Deductibles Turn Patients Into Payers.”
Readers also read:
Patients as Payers: The New Reality
Making it Easy for Patients to Pay
