How is the patient journey impacted when individuals have an estimate of care costs before their visit?
Providers are under increased pressure to publicly disclose the price of products and services they offer, in part driven by recent federal price transparency regulations. For example, the Hospital Price Transparency rule took effect on January 1, 2021, and is intended to make it easier for consumers to shop and compare prices across hospitals, as well as estimate the cost of care before going to the hospital. The rule stipulates that hospitals’ standard charges, including the rates they negotiate with insurance companies and the discounted price they are willing to accept directly from a patient if paid in cash, must be publicly available, free of charge, and presented in a consumer-friendly display.
While the federal rule applies to hospitals, it highlights the increased awareness and growing demand for price transparency across all care settings. Adding to consumers’ awareness around price transparency is the No Surprises Act, which took effect Jan. 1, 2022. This act is intended to protect consumers from excessive out-of-pocket costs when getting emergency care and non-emergency care from out-of-network providers at in-network facilities. As more providers seek to comply with new laws, healthcare consumers are likely to obtain a heightened awareness of price transparency and expect more transparency from their providers, regardless of care setting.
For outpatient practices, providers have an opportunity to get ahead of this evolution in healthcare consumer expectations by offering patients a new type of care journey that includes an option for pre-service cost estimates.
Two patient journeys
To understand the difference that pre-service cost estimates can deliver for patients, providers, and staff, consider two separate journeys that patients might follow: One is a more traditional route with the patient only paying their co-pay at the time of service. The other journey provides the patient with a cost estimate for care at the time of check-in.
In the traditional journey, the patient shows up for an appointment and upon check-in at the front desk is asked to provide her co-pay amount, without regard for other charges that could be paid up-front. Insurance companies have shifted their plan design away from copay-driven plans to high-deductible health plans, with deductibles routinely being in the $3,000 to$5,000 range (and sometimes as high as $12,000). When a patient is on a high-deductible health plan, the provider collects $0 before or immediately after the service is rendered, with the rest left at risk. After the visit is complete, a staff member files a claim with the patient’s insurance company, the patient is billed for the balance due – and then begins the provider’s waiting game to receive payment for the funds they are owed.
Some patients may pay their providers the day they receive a bill; however, a far more likely outcome is that payment is delayed because patients generally prioritize payments for rent, car payments, groceries and other monthly expenses over medical bills. Surprise bills can be particularly problematic for patients who have high-deductible plans and learn they owe significant out-of-pocket costs. Surprise bills can also be costly for providers, who often must devote valuable staff resources to work collections and chase down payments.
In contrast, consider the journey of a patient who has the option of taking advantage of digital tools that estimate the out-of-pocket costs before the visit, based on expected visit type and past history. With this approach, providers can collect not only co-pay due at check-in but, also the probable out-of-pocket cost estimate. In addition, staff can store the patient’s credit card information at the time of service, then automatically bill for any balance due after the claim is adjudicated.
For patients, this greater price transparency can yield better, more-informed decision-making and facilitate budgeting for medical costs. For example, when informed of expected costs up-front, the patient is in a much better position to decide if they should move forward with treatment now, or if they could postpone until a future date, and budget accordingly. Having the cost information prior to treatment also enables patients and clinicians to have a frank conversation about treatment options and timing.
Providers that collect the patient’s full payment at the time of service get their money sooner and also free staff members from time-consuming collection efforts. Fewer accounts have to be turned over to collection agencies, meaning a greater portion of collections stay with the practice.
Pre-service cost estimates are an essential component of providers’ broader pre-service check-in process and facilitate a more automated patient journey that delivers greater price transparency, reduces financial friction for patients, and increases the likelihood for prompt collections.
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