The everyday occurrence of patients leaving medical appointments or hospital stays with no idea what their insurance will cover, what they owe or what payment options exist would change dramatically if health care facilities turn to technology that delivers accurate billing at checkout.
Such a process would address the pre-existing condition of legacy back-office operations that make it hard for providers to know how much to collect from insurers and patients and when. Plus, a patient knowing what is owed and, at the same time, provided with options to pay immediately or through installments will give medical personnel a clearer view of their revenue cycles.
"Most providers today use a mix of payment methods to collect from patients," said Matt Hawkins, CEO of health care payments platform Waystar. "And collecting payments is one piece of the revenue cycle."
A provider may take a credit card payment for a patient's co-pay in the office, and then mail a bill or send a link to an online payment portal to the patient — if additional fees are owed after adjusting for insurance coverage.
"This often takes place weeks or months after a patient's encounter," Hawkins said. "It is similar to marketplace payments like Uber or Airbnb, a process that takes place to remit payment from the payer to the healthcare provider's account."
The way to fix the broken health care payment system is to leverage technology that improves the patient's financial experience and gets providers paid faster, Hawkins added. "Technology exists today that can provide patients with upfront cost estimates, so they know what they will owe and healthcare providers can leverage tools that automate previously manual tasks like discovering insurance coverage or tracking the status of claims."
Much of this back-and-forth process can be eliminated by technology so that providers are paid in near real-time, since a patient would know what is owed and would be given the options to pay at that time or agree to pay with installments at that time.
Louisville, Ky.-based Waystar provides the technology in its Waystar Price Transparency Solution, which instantly matches services with billing codes and takes into account patient deductibles and carrier rates.
The company says it goes a long way toward streamlining health care billing and revenue cycle management. Waystar says it processes more than $3 billion in payments from patients and more than $600 billion in insurance reimbursements. The company works with more than 450,000 medical providers and more than 700 hospitals and health networks.
Other providers pushing for improved health care payments infrastructure include
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Pricing transparency is a huge part of the equation, one that the Department of Health and Human Services is addressing through a proposed rule it established a year ago requiring health care organizations to provide patients with up-front costs for products and services. The rule goes into effect on Jan. 1, 2021.
Essentially, hospitals will have to publish gross charge, the amount the hospital is willing to accept from the patient in cash, the minimum and maximum negotiated charges, common billing codes and a description of the item or service.
"Patients want to be an active participant in the process of pricing and paying for their health care, no different than when they choose a restaurant or decide to buy a new TV," said Howard Bright, vice president of patient engagement at RevSpring. "The health care system traditionally has not been helpful in allowing patients to do this."
Patients can't compare prices and they don't know how much services will cost once they've scheduled something, Bright said. "And then they are asked to pay a balance revealed to them 30 days later from a statement that is often complex and confusing."
The financial benefits of a pre-bill to the health care system result from improved patient satisfaction, in knowing they can comparison shop on prices, and accelerated cash flow and reduced bad debt, Bright added.
While any advancements that can help fix the health care back-office infrastructure represents a welcome change, the complexities of health care costs and a patient's willingness or ability to pay faster could ultimately be stumbling blocks, said Peter Michaud, director of consulting for Strawhecker Group.
"A medical office or hospital is the only place I walk out of and don't know how much I owe," Michaud said. "You need to be able to go online, get all of the information and produce an encounter form (what services were provided) and bill literally at the time the patient is getting ready to leave the office."
The challenges of health care regulations, billing and payments are so complex through different providers and in different states, it is difficult to establish procedures to address it, Michaud said. "Plus, just the fact that the patient may know what they owe, doesn't mean they are going to pay it right away," he added.
Regardless of the numerous obstacles, the key step is using technology to address the underlying issue of inefficiencies in health care payments, Waystar's Hawkins said.
A new payment model with greater transparency and clarity could unfold when the overall cost of a patient visit is determined on contracted rates for services between the doctor and insurance company, and the amount owed by the patient is calculated using the deductible already met in the current calendar year.
"The patient could pay the pay the full amount at the time of service, eliminating the need for a paper statement, or set up a payment plan to pay the balance over time," Hawkins noted.
Getting a provider paid in near real-time instead of weeks or months later, eliminates the administrative costs associated with chasing claims, while a company like Waystar would also manage the claims process with payers and transform the traditional view of revenue cycle management, he added.
