EXECUTIVE SUMMARY
Many states have enacted price transparency laws in response to demand from patients who want to know the cost of care. Some challenges include the following:
- Posting hospital charges on websites doesn’t give useful information.
- Patient access professionals need continual education to answer questions on cost.
- Some insurance carriers offer patient pricing portals, but these are underused.
(Editor’s Note: This story is the second of a two-part series on price transparency and patient access. Last month, we covered how to give accurate and timely cost estimates. This month, we explore how recent state laws are changing patient access.)
Frustration with the difficulty of telling patients how much something will cost is driving big changes in patient access.
“It’s not just consumerism that’s driving this; it’s regulations. If it’s not already on your radar, it needs to be,” says David Kelly, MHSA, CHFP, director of revenue cycle at Mary Rutan Hospital in Bellefontaine, OH.
A growing number of states have instituted price transparency laws. In part, these laws are driven by consumer complaints about high-deductible plans.
Sandra J. Wolfskill, FHFMA, director of healthcare finance policy at the Healthcare Financial Management Association, says, “If providers are not being transparent about prices up front, the surprised patient is dissatisfied and registers that dissatisfaction with their local state representatives.”
Mary Lee DeCoster, a Phoenix-based revenue cycle consultant, sees lack of standardization as a serious problem with the laws.
“My own state has a poorly written law,” she says.
Arizona’s law mandates hospitals post the “direct pay price” for the 50 most commonly reported DRGs on their websites. Most hospitals simply posted their chargemaster rates.
“That is not very helpful information to patients who want to know what a specific service is going to cost them,” DeCoster argues.
Patients aren’t able to accurately compare costs of care at various hospitals.
“Very few patients are shopping for the cost of ‘sepsis’ or ‘pneumonia’ care,” DeCoster adds.
Not Specific Enough
Forty-three states received an “F” grade on the 2016 Report Card on State Price Transparency laws, developed by the Health Care Cost Institute and Center for Payment Reform.1 Of the seven other states, New Hampshire, Colorado, and Maine received an “A,” Oregon received a “B,” Vermont and Virginia a “C,” and Arkansas a “D.”
Jonathan Wiik, principal for revenue cycle management at TransUnion Healthcare, says that states with an “A” rating enacted laws that focus on collecting information on patient responsibility and average insurance reimbursement.
In Wiik’s view, most of the state price transparency laws have “missed the mark.” The laws typically require providers to share prices upfront, either upon request or via their websites. Wiik says there are two problems with this approach:
- The posted prices don’t factor in hospitals’ contractual discounts with payers.
- An individual patient’s benefits aren’t factored in.
DeCoster says commitments for providing a timely response to a request for a price estimate is “well-intentioned, but lacks specificity.” Hospitals easily can post the gross charges for a service, but this information doesn’t tell patients what they’ll actually pay.
Wolfskill says, “The reality is, patients do not care about our ‘charges.’ Posting charges is no longer sufficient.” Instead, patient access needs tools and training to be able to give an accurate price estimate to a particular patient.
DeCoster says, “If the hospital lacks the technology to provide a specific estimate based on the patient’s insurance coverage, plan type, and deductible status, more time will be lost in trying to retrieve this information from the health plan.”
No More Excuses
Some payers offer interactive web-based tools so consumers can query the cost of a procedure performed by a specific provider.
However, DeCoster says that “most consumers do not think to contact the plan. They want the answer from the provider, during the visit when the provider is ordering the procedure.”
Wolfskill says that this desire is where the role of patient access is crucial.
“Through technology advancements, there is no room for the excuses of the past, where providers complained that creating an estimate was just too difficult,” she adds.
Wolfskill views the patient’s “financial healthcare” as an essential component of the patient’s overall experience, along with clinical healthcare.
Lee Patillo, patient access director at UAB Hospital in Birmingham, AL, says patient access needs better tools and continuous training to answer increasingly complex questions related to cost.
“We have put together a group of employees that are tasked with calling patients prior to their scheduled date of surgery,” Patillo says, explaining that during the call, patients are pre-registered and informed of out-of-pocket costs. “Patients would much rather know upfront about their out-of-pocket responsibilities than to receive a bill in the mail that they weren’t expecting.”
Clearer Choices Needed
Hospitals often lack technology to provide a “retail” consumer experience for patients.
“It frankly is difficult to pay a hospital bill, before, after, or during, your care,” Wiik says. “It has evolved into a very complex process.”
Patients are left confused over costs and little ability to compare costs at various hospitals.
“Patients are becoming the new payer,” says Wiik. “Establishing funding mechanisms for patients in advance, and providing payment options early, are critical to fixing this issue.”
Some insurance carriers offer patient pricing portals.
“However, the adoption is shockingly low, and it has had little impact on patient behavior,” Wiik says.
Fewer than one in 10 consumers used the portal, and it didn’t result in lower spending, according to a recent study.2
Wiik says the key is for patient access to engage patients early in the process, with an individualized discussion on costs and coverage. “Then, and only then, can consumers drive their care and control their costs,” Wiik says.
The Healthcare Financial Management Association’s Patient Financial Communications Best Practices address communication in advance of service and at the time of service, with a framework of measurement to determine compliance. To download a PDF of all the best practices, please visit: http://bit.ly/1s2u63E.
REFERENCES
- De Brantes F, Delbanco S. Report card on state price transparency laws — July 2016. Health Care Incentives Improvement Institute, Newtown, CT. Accessed at: http://bit.ly/2adFvch.
- Desai S, Hatfield LA, Hicks AL, et al. Association between availability of a price transparency tool and outpatient spending. JAMA 2016;315:1874-1881.
SOURCES
- Mary Lee DeCoster, Revenue Cycle Consultant, Phoenix. Phone: (602) 689-2026. Email: [email protected].
- David Kelly, MHSA, CHFP, Director, Revenue Cycle, Mary Rutan Hospital, Bellefontaine, OH. Phone: (937) 651-6338. Email: [email protected].
- Lee Patillo, Patient Access Director, UAB Hospital, Birmingham, AL. Email: [email protected].
- Sandra J. Wolfskill, FHFMA, Director, Healthcare Finance Policy/Revenue Cycle MAP, Healthcare Finance Management Association, Westchester, IL. Phone: (708) 531-9600. Fax: (708) 531-0032. Email: [email protected].
Due to high out-of-pocket costs, patients are ‘becoming the new payer.’
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