Medical Practice Billing Challenges and Some Suggestions to Overcome Them
By David Crooks, President and CEO, Easy Pay Solutions
It’s not always easy for patients to understand their medical insurance, and in turn their medical bills. That confusion can lead to delayed payment and patient frustration. Most of us don’t have to regularly pay medical bills, so they are often a unique source of frustration. They are full of medical jargon that patients don’t understand and we typically don’t like paying for things we don’t understand.
There are other bills we pay even though we don’t fully understand them. Take, for example, the bills we all pay regularly. Do you know exactly what you are paying for when you pay your cell phone or cable bill? Or, better yet, how about your car insurance? Could you explain in detail what your auto coverage actually covers? Maybe you are one of those who studies your bills and knows exactly what each item means and why you have to pay it – if you are, then I suspect you are in the minority. If you are like me (and I imagine, most of us) you strive to understand the essential fees and once satisfied, pay them, as long as they stay the same. We are accustomed to these bills.
But healthcare bills are different. As we said above, they are not regular so we don’t get accustomed to seeing them. Patients with a recurring need may grow accustomed, but most of us don’t. So, healthcare bills often give us a shock. Even if we work in healthcare, we often get surprised by the billing. Test this out for yourself with the following exercise.
- Take your 15-20 most popular billing codes.
- Print out the descriptions of those codes. (Those that will appear on the EOB to your patient.)
- Find a neutral party outside the medical profession and have them review the descriptions.
- How many of those descriptions can they understand?
- Ask them if they would be satisfied paying a bill with their present level of understanding.
The challenge here is to put ourselves in the patient’s shoes.
We could pass this off as an insurance company, ICD 10 government regulated coding problem, or we could push ourselves to create something better from the ground up. What would be the harm in creating better descriptions? Descriptions in plain language? I’m certain that bills would be paid faster if patients really understood what they were paying for.
It’s no wonder the average medical bill gets invoiced three times and involves a phone call before it gets paid!1 Before we dismiss this, let’s consider the following:
In 2010, 23.2% of patient services revenue came from the patient’s pocket2 and that revenue took a minimum of 30 days to collect. Much of it didn’t get collected for 90-120 days. Let’s make that real. If your employer came to you and said, ‘Hey, starting this week, we are going to hold back about 25% of your paycheck and pay you sometime in the next 30 – 120 days.’ Does that work for you?
In 2016, 26.9% of patient services revenue came from the patient’s pocket.3 I suspect that number will go higher in the years to come. If employers handled our personal income like patients handle our billing, we would do something about it!
The reality is that patients would be more than happy to pay their bills on time if they were prepared for them and understood them.4
60.5% of respondents to a recent survey rated their medical bills as confusing or very confusing.5 A lengthy 2015 article in The Atlantic exposes the frustration by suggesting it shouldn’t take an expert to figure out a medical bill, but it often does.6 The entire article is worth your time! Further, 9 out of 10 patients want to know their payment responsibilities upfront.6 If I have insurance, I want to know what my responsibility will be after insurance. Otherwise, I don’t trust the numbers.
Plain language billing, or at least simplified explanations of medical terms, should be incorporated into our patient facing bills. Many billing systems today are able to accommodate both a medical terminology description and an alternative one that can be plain English for patients. Unfortunately, few practices take the time to provide a translation they are comfortable using.
In addition to plain language billing, eligibility and estimations are a must if we want patients to feel comfortable.
Up-front financial conversations (or conversations that happen once the needed treatment is determined) that include these elements would go a long way to helping patients feel good about paying their bills on time.
In my view, the ideals to shoot for are as follows:
- Have the financial conversation at the earliest moment possible – when the practice knows what the patient will need and what it is likely to cost.
- Explain what the insurance will cover and what the patient will be responsible for.
- Explain the medical terms, lab tests needed, reasons for a specialist and any other relevant issues the patient could be confused by.
- Find out if the patient will need charity assistance, a payment plan or other financial help.
- Give lower cost alternatives for treatment if they exist.
- Implement plain language billing where possible.
I realize that conversations like these will take time. Is it better to take the time up-front to help the patient understand and discover ways to pay for the treatment on time? Or, should we just keep doing business as usual and chasing the money on the back end when the patient is frustrated and confused?
The Aprima PM system has gone a long way toward addressing many of these issues. For more information and best practice suggestions, contact your Aprima representative and ask how your practice can better utilize the power of Aprima!
About the author
Mr. Crooks is currently the president of Easy Pay Solutions, Inc., a Chicago-‐based company and Aprima partner, focused on helping healthcare providers expedite patient payments while reducing bad debts and patient receivables.