Getting a Grip on Billing
Health Data Management Magazine, September 1, 2009
It sounds simple enough. A patient sends an e-mail to a hospital asking how much it will cost out of his own pocket to have his gallbladder removed. Odds are, if he gets an answer at all, the response will be long in coming because generating such estimates is far from simple. Yet, it's a service that more patients are asking hospitals to offer.
Faced with ever higher insurance deductibles - or lacking insurance altogether - more consumers are shopping around for their health care much as they would for a car. After all, they already use the Web to generate quotes on services ranging from travel to mortgages.
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In the face of this burgeoning consumerism movement, hospitals interested in staying a step ahead of their competitors are scrambling to provide improved customer service, including providing estimates. But they're discovering that gathering all the necessary data for an estimate can be very time-consuming and cumbersome. Hospitals making the effort, however, find they are in much better position to generate patient loyalty.
Quoting an estimate might include such steps as verifying insurance eligibility and coverage, either online or by phone; determining how much of a patient's deductible obligation remains; diving into a contract management system to determine the terms of a deal with a specific insurer; and perhaps studying an average of recent procedure charges for self-pay patients.
Hospitals are taking a wide variety of manual and automated approaches in an effort to streamline the bill estimate process. In addition, they're taking many other steps to improve revenue cycle management in response to consumerism. For example, they're simplifying the language used in bills, and, in some rare cases, consolidating hospital and doctor statements. And they're accepting credit card payments at patient portals or kiosks.
For many hospitals, meeting patient demands for information is creating a systems integration nightmare, says Ron Comejo, director of the revenue cycle practice at IMA Consulting, Chadds Ford, Pa. For example, estimating a bill "might require working with four or five vendors to integrate their applications and get the job done," he says.
Many older patient accounting systems aren't set up to produce bills written in patient-friendly language, he notes. In many cases, this forces hospitals to turn to an outsourcer for additional help.
And consolidating hospital and physician bills requires extraordinary collaboration - uncharted territory for many providers, he adds.
A Creative Solution
Frustrated by the lack of functionality of available bill-estimating software, Alegent Health worked with one vendor to develop a custom application to meet its needs. The result? The Omaha, Neb.-based delivery system with nine hospitals now quickly provides detailed bill estimates to consumers on its Web site - a rarity in health care.
"The story behind it is that our CEO came back from a Chamber of Commerce meeting and told us that he announced that within a year, we'd offer the coolest cost-estimating tool in health care," recalls Scott Wooten, senior vice president and CFO.
The project involved far more than computer programming - although that alone was a tall order. It required cooperation from a number of players.
Wooten, like many other hospital executives, learned that health insurers, burdened with legacy information systems, often find it difficult to pinpoint such details as remaining deductibles and co-payment levels. So he took the extraordinary step of enlisting the support of a local employer to help get the ball rolling.
"We had a strategic relationship with a major employer here, Union Pacific, who wanted us to offer bill estimates," the CFO says. "They pressured their insurance company to cooperate with us on this project."
Alegent worked with MEDSEEK Inc., Birmingham, Ala., to create the MyCost application to gather all the necessary data for an estimate. It also worked closely with its hospital information system vendor, Siemens Healthcare, Malvern, Pa., to fuel the estimates with data from Siemen's claims clearinghouse database. MyCost also links to Alegent's managed care contract management system to obtain data for specific payers.
As a result of those integration efforts, potential Alegent clients can visit a Web site, type in their insurance or self-pay information, request an estimate on any of 500 services, and get a reply within seconds. Enrollees in certain health plans that cannot yet electronically provide complete data, however, must input their own information on copays and deductibles.
Since implementing MyCost in February 2007, Alegent has processed 82,000 transactions. But because the system doesn't retain patient identification, it doesn't track whether the curious consumers wind up as clients, Wooten says.
The CFO hasn't even attempted to calculate a return on the investment in the major application development effort. "This was driven by our strategy to embrace consumer-driven health plans and create relationships with consumers," he stresses. "We saw this as a way to simplify consumers' lives."
Interim Steps
While Alegent has automated virtually all the steps involved in producing an accurate estimate of patients' out-of-pocket costs, many other providers have taken interim steps toward streamlining the process.
Integris Health, a 14-hospital system in Oklahoma City, offers a "price line" phone number that consumers can use to receive estimates within 24 hours or less, says Brent Grimes, corporate director of patient financial services. Using a home-grown database, Integris links information from its chargemaster list and its contract management system. That way, the hospital system can produce an estimate of likely charges for a particular diagnosis. It also calls the insurer to verify eligibility as well as benefits levels.
In addition to getting a return phone call, patients get a letter confirming the estimate.
"We had a need to serve patients who are doing comparative pricing in our market," Grimes says. "There are a lot of health care choices here in Oklahoma City. We also had a broken down system," he adds, pointing to inconsistent estimates among various Integris hospitals.
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