The patient checks in, the procedure takes place, the recovery begins and then the pain – patient financial liability pain, that is. This scenario, repeated over the last two decades, has generated a frustration from patients that has grown from meek resignation to outright indignation, prompting lawsuits, state and federal legislation, consumer driven healthcare and health savings accounts.
Enter patient friendly estimates – the practice of providing patients with estimates of their financial obligations at the point of scheduling or registration.
"We have found that providing accurate, transparent up-front pricing information helps improve patient satisfaction by eliminating surprises when the bill arrives," says Hamilton S. Todd, section manager, Patient Financial Services for the Mayo Clinic in Jacksonville, Florida.
"We have also found that patients whose treatment was estimated upfront are more likely to pay for the care they received, ensuring that the Mayo Clinic can continue its mission to provide the very best care to every patient every day through clinical practice, education and research."
Although the practice of providing patient friendly estimates at the point of service might be characterized by pessimists as "easier-said-than-done," it can be accomplished manually and then presented as "good faith" estimates to patients with appropriate disclaimers based on average costs for comparable services.
No matter how well intended, however, the manual approach to generating a patient estimate is a bumpy road fraught with problems. First, there will always be a question of accuracy because the manual approach relies on internal data including the chargemaster and historical claims. Yet since that kind of data is often limited to a finite number of common profiles or services that may or maybe not be current in the organization's database, it is not likely to be accurate. Second, the more complicated estimates are likely to require up to three hours to complete. And, finally, in the end, what you might have is an estimate without the quantifiable data necessary to explain to a patient.
Where to Begin
So how does one go about the practice of creating accurate patient estimates? You can begin by using current tools that should be readily available at your disposal. These will include the data from your Charge Description Master (CDM), plus an analysis of utilization, contracts, claims and benefits. Taken together, these are the tools necessary to form the basis of an accurate patient estimate. The added benefit? Once you've gone through the process of gathering this data in a systematic order, you will be one step closer to an automated system for generating patient estimates.
Step 1: Delve into the CDM
Relying on an updated CDM (or multiple chargemasters if you are in a hospital system) is essential when using that data as a basis for generating patient estimates. Your organization's CDM needs to reflect all the latest regulatory changes related to coding, pricing, compliance and reimbursement.
Step 2: Review Historical Utilization Analysis
There is a wealth of information that provides greater detail in order to create a grouping of charges that are statistically reliable. Take hip replacement surgery, for example. To understand all costs associated with hip replacement surgery – as you prepare your estimate – drill down to the UB-92 level. Here, among other costs, are both hard and soft codes that otherwise might go undetected. By understanding your book of business, through utilization analysis, you can develop a package of services with greater accuracy.
Step 3: Review Contracts
Once you have a gross estimate for services, a review of contracts will indicate what is covered and what the patient's out-of-pocket liability will be, especially since reimbursement terms can affect the patient's liability amounts.
Step 4: Evaluate Multiple or Single Estimating Systems
Healthcare systems need to determine if it is feasible to use a single system for generating patient estimates. This would not be a problem if all hospitals in the system shared the same CDM and exhibited similar physician patterns and types of services. If, on the other hand, your organization doesn't have this level of homogeneity, you will need to develop unique estimating systems for each of the entities.
Step 5: Gather Specific Benefit Information
In order to generate an accurate patient estimate, apply all specific benefit information. Determine what the benefits are, if any, as well as any co-payments. Knowing what the true benefits are is essential to calculate out-of-pocket liabilities.
These five steps will provide you with the elements to produce an accurate, patient-friendly estimate and will help you move from a manual to an automated system.
As with all automated tools, there needs to be a sound operational system or process in place, along with well-trained individuals.
So, where do you start? Like all sound initiatives, planning is essential.
Develop a Plan
In preparing your plan, determine the following:
Think through how your organization's philosophy and culture relate to collections at the point of service. In other words, "How do you ask for the money?" With upfront estimates, you should be able to show patients the total estimated cost of a given procedure, less the amount the insurance will pay. From this figure, you can then estimate the patient's out-of-pocket cost.
Communicate the Plan
Once the plan has been approved, it is critical to ensure that the clinical staff is educated regarding the process.
Review Procedural Changes
Determine who will do the estimating. At this point it would be advantageous to have a pre-determined criteria of the requisite skills including knowledge of coding and billing. Decide where it will be most logical to perform the estimating process – at the registration or patient financial services. And just as important, determine the most logical person to perform the estimating.
Conduct Training
Training will be required on how to use the automated system and how to ask for the money. For example, will the same individual be asking for the money or just providing information? Additional training is also helpful for those generating estimates to search for services using local terminology/alias.
Validate
QA reports are critical to validating the accuracy of estimates against claims. If you are not performing a QA on your current process today, it is something that should be implemented.
Measure
Develop a methodology whereby you can measure point of service collection for accounts with estimates versus those without estimates. You will also want to measure the run rate over time and evaluate the effectiveness of providing the estimates. Some health systems have determined that those patients who pay at the point of service pay in full 80 percent of the time. Conversely, those that do not make a payment at the point of service only pay the account in full eight percent of the time. Measure the success achieved by individual employees who have been charged with collecting payment.
Achieving Success
Customers using Accuro's CarePricer® system find that accurate estimates lead, in turn, to higher patient satisfaction and a decrease in the number of write-offs. One customer noted that informing patients upfront of their out-of-pocket costs is not only consistent with providing the best quality of care, but also very important in today's transparent pricing environment.
Julie Waddell, CarePricer Owner
To learn how you can provide Patient Friendly Estimates™ at the point of service, visit Accuro CarePricer.
