With deductibles steadily rising and showing no signs of trending lower, patients are increasingly involved in their care, from the clinical side to the revenue cycle. Powerful "mega trends" and platforms such as ride sharing, e.g. Uber, Lyft, Amazon and Google are significantly shaping patient expectations when they interact with service providers including medical clinicians. Ed Gaines, chief compliance officer of Zotec Partner's emergency medicine division, delves into the intricacies of the patient revenue cycle and how hospitals and clinicians may optimize collections by improving the patient financial experience.
Note: This conversation was lightly edited for style and clarity.
Question: What are some of the greatest challenges clinicians' face in consumerism within the revenue cycle?
Ed Gaines: Some challenges are the expectations created by the modern technology we interact with every day, like Uber and Lyft. As consumers, they have altered what we expect from technology. Frankly, many in the revenue cycle might say healthcare has been caught in a bit of a time warp in terms of the technological friendless of the revenue cycle. You have these modern expectations and then you have an admittedly highly complex, interactive relationship with payers. There is often a clash of those expectations.
The platform orientation we previously had was designed to deal with payers, and part of the challenge now is directly interacting with patients. Clinicians had a "direct to carrier" relationship 20 or 30 years ago—patients had relatively low "cost sharing" (cost sharing includes patient deductibles, co-insurance and co-pays), e.g. $1-200 per year, and the carriers reimbursed the claims. In contrast, today patients are the largest payer in healthcare outside of the federal government, with almost half of patients with employer-sponsored insurance paying deductibles of at least $1,000 [annually for single coverage].1
Q: Why is the patient financial experience important to providers?
EG: Part of the challenge is having the platform and technology available to patients that meets them where they are and where they expect to be. Baby boomers may want a printed statement and to speak to someone on the phone to ask questions about their bill before they write a check. My kids and other "millennials," on the other hand, may be fine interacting with the revenue cycle through a mobile app with no printed statement or speaking to a patient services representative because they are used to ordering things off Amazon or ordering dinner off their phone. The HSA card method of paying for patient cost sharing may be very important to both demographic groups, so the clinicians' revenue cycle management functions should facilitate that payment method via interactive voice response, texting and mobile app.
Clinicians and hospitals should meet patients' expectations by understanding how patients have interacted with the revenue cycle in the past, such as whether they called a patient services call center or sent a text. You should also look at whether they honored their financial obligations in the past for services.
There are a number of data elements you can use to figure out what strategies work for that patient. These strategies should be based on data — not your gut feeling or what you think of that patient.
It's about creating personas around a patient's propensity to pay and [identifying] areas of friction that may slow payment down. To do that, you need to collect as much data within your system as possible and use the data available in the public realm. The goal is to figure out particular characteristics of that patient, such as whether they are on a high deductible plan or a plan where the employer picks up more of the cost. Some health plans are more provider-friendly than others. Clinician services differ as well in terms of health plans' willingness to reimburse — health plans may reimburse annual physical exams, a woman's screening mammography and well-baby exams at or near 100 percent of charges, with little to no patient cost sharing.
Q: How can hospitals minimize friction with patients on post-service payments and optimize collections?
EG: When we speak of eliminating "friction," let me use an analogy. When I traveled for work 25 years ago, and I would always have cash for a taxi. Now, none of us think about that because we use ridesharing services — the "friction" is gone. You hit the app and the car shows up with the credit card information already loaded. You don't need to use an ATM machine or make sure a taxi takes a credit card. All of those steps once needed are not needed now. So ride sharing services have reduced or eliminated the "friction" around the transportation transactions—that's what we need to do with the RCM functions.
You have to identify the sources of friction in the revenue cycle. In some health plans, the insurance company will cover 100 percent of a service and the patient does not have a deductible (as described above). Under that health plan, you can send the bill directly to the insurance company that will reimburse you for that service. You have to know the type of service and your past experience with a health plan, and you should know what kinds of elements will impact taking an accounts receivable and liquidating that into cash to pay providers appropriately.
One other element to keep in mind is patient satisfaction. If a patient is satisfied, the data shows they are more likely to pay their bill, suggesting that 74 percent of satisfied patients paid their medical bills in full, compared to 33 percent of their lesser satisfied counterparts, thus proving that patient dissatisfaction with financial processes can negatively impact satisfaction score and an institution's bottom line.2 You have to improve a patient's clinical and financial experience. The Institute of Healthcare Consumerism shares this notion as well, stating, "There is a greater expectation for personalized experience in healthcare, and healthcare technologies that seek to know each patient, remember preferences and engage with them effectively, and via the communication channels they are used to in daily life will be at the forefront of taking patient care to its next inevitable level." The IHC also suggests that these patient experience technologies can ultimately lead to higher patient volumes, revenue, profitability and an overall standard of care.3
Q: You mentioned texting the patient above. What are some potential legal traps providers face in complying with laws that regulate texting like the Telephone Consumer Protection Act?
EG: The Telephone Consumer Protection Act dates back to 1991 and was intended to deal with aggressive telemarketers and automated "robo" calls. The problem we have now is that law is old relative to the technology we have today, where many of us use the mobile phone as the primary method of communication. For example, I know of a large hospital based group that has hundreds of clinical arrangements with hospitals and over 80 percent of their patient phone numbers in 2016 taken during the hospital registration process were mobile phone numbers.
The TCPA law and Federal Communications Commission regulations impact both mobile phone voice and SMS, e.g. text. The FCC issued a 2008 ruling stating that consumers may provide express consent to be called on their mobile phone if they knowingly release their mobile number. In two federal circuit court cases, the appellate courts have ruled that patients' have provided express consent for hospitals to communicate with their mobile phone if they give their mobile numbers in the hospital registration process. The potential "trap" rests in making sure that the hospital's "consent to treatment and patient authorization" is clear and indicates it is acceptable for a hospital, clinician and/or their revenue cycle partners to communicate with a patient regarding the revenue cycle. You want to make sure the [consent] form covers the healthcare treatment and the revenue cycle functions — the best practice is to include both RCM and debt collection companies by general reference.
Another piece of texting compliance of course is dealing with HIPAA; you have to be careful how you communicate with patients when initially reaching out to them to make sure you are not falling down on HIPAA requirements. You have to be thoughtful about your policies when communicating with patients via text and make sure you have ways to verify who they are before sharing protected health information with them.
Q: What are some challenges in complying with the Fair Debt Collection Practices Act, and what strategies can hospitals employ to avoid these potential issues?
EG: FDCPA is a statute designed to prevent abusive collection agency practices, such as issuing consumers misleading or threatening statements to try to collect on debt. In our business, you have to be careful with the language in a patient's statement and make sure you are not sounding, looking or acting like a collection agency. FDCPA excludes from the definition of "debt collector" accounts that are not "in default."
For example, these rules may impact clinicians who send a "pre-collection" letter to a patient before sending that account to a third party debt collector. Language in the "pre-collect" letter that states that the account is "in default" or in "default status" may remove the exemption referred to above. Clinicians should consult with experienced healthcare counsel regarding the language used in any patient communications including patient statements, text messages, "final notices" and "pre-collect" letters to mitigate the FDCPA compliance issues.
Q: What are the negative consequences when hospitals waive or discount the clinician charges or fees for a rendered service for a patient who may struggle to pay their hospital bill?
EG: The federal government has been clear since the mid 1990s that if the clinicians routinely waive the patient cost sharing of a rendered service or charge a fraction of that service's total costs for patients insured by a government program (excluding programs based on patient financial need), that could be considered fraud and abuse. "Good faith" determinations of patient financial needs and documentation of the patient's cost of living, assets, dependents and extent of the clinicians' bills may be the basis for discounting patient cost sharing or providing free care.
On the commercial health plan side, that can also be a problem if you don't have some substantial reason to discount, like financial need. A hospital can write off two-thirds of the bill for a patient if that he/she is at or below 125 percent of the federal poverty level. Hospitals should have a policy to verify financial need and follow that. For employer-sponsored coverage, you have to be careful when waiving a patient's financial responsibility — that may violate a managed care contract. There have been several well publicized legal cases where commercial health plans have successfully challenged in court the clinicians' who have waived or reduced patient cost sharing in the out of network context to attempt to maintain their referral base.
References
1 Kaiser Family Foundation, Press Release on Annual Workplace and Family Healthcare Premiums: http://www.kff.org/health-costs/press-release/average-annual-workplace-family-health-premiums-rise-modest-3-to-18142-in-2016-more-workers-enroll-in-high-deductible-plans-with-savings-option-over-past-two-years/a
2 Connance. Study: Satisfied Patients More Likely to Pay Medical Bills. http://www.connance.com/wp-content/uploads/78-connance_infographic.pdf
3 The Institute for Healthcare Consumerism, The Consumerism of Healthcare: What Patient Experience Means to Our Future. http://www.theihcc.com/en/communities/health_care_consumerism/the-consumerization-of-healthcare-what-patient-exp_h333dkhj.html