As healthcare organizations consider ways to make pricing more transparent for consumers, many are finding it’s easier said than done.
INTEGRIS Health was one of the nation’s first health systems to adopt a price-estimate tool that gives patients a quote on their expected out-of-pocket costs. One reason the Oklahoma-based network launched the tool back in 2010 was to save patients from medical billing surprises.
“One of the worst phone calls I get is from a patient who has a big liability and says, ‘If I had only known it was going to cost this much, there is no way I would have had this procedure done,’ ” says Amber Harris, administrative director for patient access.
In addition to looking out for patients’ financial health, INTEGRIS Health saw an opportunity to improve point-of-service collections, or arranging for patients to pay their portion of the bill before they leave the hospital or medical office, Harris says. “We wanted to make sure we were giving patients a viable estimate so that they could, hopefully, make arrangements to pay that prior to service so that we have reduced billing costs.”
Harris estimates that INTEGRIS has improved point-of-service collections by at least 50 percent since 2010.
Following the lead of INTEGRIS Health and other transparency pioneers, 88 percent of healthcare providers now provide price estimates at the time of service, according to a 2016 Navicure survey of 300 providers.
Fueling the trend is the rising number of patients covered by high-deductible health plans, which require enrollees to pay a higher share of their medical bills. This leaves providers at risk for the amount patients don’t pay.
Some hospitals and health systems, like Billings Clinic and St. Clair Hospital, have patient-facing tools on their websites that enable patients to enter their insurance information and get online estimates for the most common procedures. For now, INTEGRIS Health’s pricing tool is used behind-the-scenes by registration staff who give patients an estimate before every scheduled service, from MRIs to total hip replacements.
“Prior to having a pricing tool, we were giving patients a very broad idea of their responsibility,” Harris says. “The best we could say was, ‘We know you have to pay your deductible.’ ”
Now, registrars can calculate a specific estimate of the patient’s out-of-pocket responsibility by entering several pieces of information into the application, beginning with the patient’s insurance plan and the procedure code (i.e., CPT code) for the service that the patient will receive.
Behind the scenes, the solution sorts through the contract that the health system negotiated with the patient’s insurer to determine the price of the service under the patient’s plan. “The estimate has to be based on the contract that is applicable to that patient,” Harris stresses. “The tool needs to have an easy way for patient access staff to pick the insurance plan based on the patient’s benefit card. Then it needs to map that plan to the right contract.”
“The most clean estimate you can do is to have a CPT code and go out and see if that CPT code is grouped somehow in the contract with a specific reimbursement rate,” Harris says. “As long as you are getting it directly from data that you’ve established with the payer and you’ve modeled your contract correctly, that’s the most direct way.”
In contrast, a provider’s chargemaster—a list of rates for various services—is typically irrelevant, says Harris. That’s because chargemasters cite general prices, not the actual rates negotiated with commercial insurers or the set fees paid by Medicare and Medicaid.
Yet, even tying price estimates to contracts may not be 100 percent accurate, warns Harris. “Even with excellent contract modeling capability in a pricing tool, there are still nuances of contracts sometimes that are just hard to model. Certain contracts might group certain procedures together into different groupings and have some special logic that applies to them. So you have to figure out a way for the tool to allow for as many contract terms as possible, and hit it as close as you can.”
To complete the price estimate, INTEGRIS’ tool factors in the patient’s specific benefit information, such as the dollars patients must pay to reach their deductibles and the co-insurance percentage that kicks in after the deductible is met. This part of the estimate is less automated than Harris would like. “It’s not a requirement in the HIPAA 270/271 transaction. That data set is somewhat limited.”
Some insurers electronically calculate and share the specific data points needed for price estimates. But in many cases, INTEGRIS registrars must sift through the insurer’s eligibility response to find these data points and enter them into the price estimate tool.
INTEGRIS is in the middle of transitioning price estimate tools, from TransUnion clearIQ to Experion Passport, because of a systemwide switch to an Epic electronic health record and Experion revenue cycle suite. “We’re trying to streamline the different number of vendors that we use, so it made sense to try to use a tool from the same vendor,” Harris says.
The switch has drawn attention to the importance of usability in price estimate tools. “We really helped develop part of our legacy tool. We made modifications to make it a relatively user-friendly tool. Now, we’re going through growing pains with our new tool. We’re working to make sure that the new tool we're using is as reliable as the old one.”
When asked what’s important for IT leaders to consider when building or adapting a price estimate tool for hospital revenue cycle staff, Harris recommends: “The simpler the screen the better.”
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