As patient satisfaction scores are increasingly linked to provider reimbursement, it's critically important hospitals resolve instances where patients report great clinical outcomes and negative experiences with billing.
Becker's Hospital Review recently spoke with Beth Prince, director of operations, business performance services for McKesson, about how hospitals are adapting to manage an increasing number of patient billing complaints.
Root causes of billing complaints
Healthcare reform has transformed how hospitals conduct business. Due to shifts in cost sharing, a larger portion of many hospitals' reimbursement now comes from patients rather than commercial payers. This means hospitals are interfacing more than ever with consumers to collect. Many hospitals' revenue cycles are struggling to meet today's financial demands and consumer expectations due to a confluence of factors, from historic underinvestment to administrative burden.
Many Americans who gained healthcare coverage under the Affordable Care Act are unfamiliar with what their health insurance entails. The first time some policyholders hear about deductibles, co-pays, co-insurance or benefits is when an unanticipated hospital bill shows up in their mail. In fact, consumers' No. 1 billing complaint is that hospital employees did not explain how much their medical care would cost, says Ms. Prince.
The shock of an unexpected expense can destabilize the patient-hospital relationship and reduce satisfaction rates. A 2013 survey by TransUnion found nearly 70 percent of patient respondents who gave the highest ratings to their quality of care during the past two years also gave high ratings to their billing and payment experiences, compared to only 24 percent of those who gave low ratings to their quality of care. This has made customer satisfaction a strategic priority for hospitals as clinical outcomes and HCAHPS scores are increasingly linked to reimbursement rates.
Negative financial interactions also have a direct effect on hospitals' cash flow. A 2016 study by Connance found 74 percent of satisfied patients paid their medical bills in full, compared to 33 percent of their lesser satisfied counterparts. Intermittent or unreliable cash flow can harm a hospital's ability to respond to changing market conditions, putting an organization at a disadvantage in the transition to value-based care.
Many patients lodge complaints about the length of time between services rendered and when they get a bill in the mail, says Ms. Prince. The number of days an account is in days not final billed is a great indicator of revenue cycle efficiency. High claims denial rates and slow adjudication processes can delay patient billing for up to four months or longer. "Hospitals forecast receiving patient payments within a certain timeframe," says Ms. Prince. When patients don't get bills on time, hospitals likely won't get paid on time, she says.
In recent years, hospital revenue cycles have struggled to remain efficient under a mountain of new regulations and reporting measures implemented by the ACA. Because of the increased demand for documentation under ICD-10, physicians are required to perform clinical and time-intensive administrative duties with no increase in compensation, says Ms. Prince. Tedious, administrative tasks can slow down the claims submission and billing process, causing patients to receive bills later than anticipated.
Hospitals enlist outside expertise
Implementing revenue cycle upgrades in-house can be cost-prohibitive and time-intensive. Because hospital leaders traditionally considered revenue cycle a cost-of-business expense, hospitals have typically underinvested in revenue cycle capabilities, training and infrastructure. This has forced hospitals and health systems of all sizes to the market in search of tools and expertise to help them meet contemporary market demands.
Outsourcing financial operations to subject matter experts has emerged as a successful and growing trend because it eliminates overhead costs. Outsourcing allows a hospital to take advantage of a vendor's updated IT infrastructure without having to buy and implement the technology itself. "More healthcare organizations are investing in external companies to improve their revenue cycle workflow and free up capital by cutting operating expenses," says Ms. Prince. Many hospital leaders recognize that updated IT systems and advanced payment tools in the hands of capable financial experts can speed claims processing and drive positive patient experience down the line, resulting in improved cash flow, she adds.
Best practices
Ms. Prince recommended hospitals implement the following four best practices to successfully address and mitigate patient billing complaints.
1. Front end registration. Sloppy registration processes can cause administrative burden and claims delays downstream for billing department staff. Simple mistakes, such as missing or incorrect demographic information, can extend the claims resolution process and add days in accounts receivable. Ms. Prince recommends hospital leaders augment or enhance their registration processes to reduce errors.
2. Financial counseling. Helping patients understand their insurance benefits, medical costs and financial responsibility prior to scheduling a procedure can prevent the hospital from taking on bad debt and eliminate a significant portion of billing complaints. Ms. Prince suggests administrators invest in financial and insurance education services to improve patient experience and the hospital's bottom line.
3. Process, employee accountability. Leaders should implement and uphold revenue cycle benchmarks to ensure operations don't fall behind. "If you need to get clinical documentation completed within 72 hours of discharge, then you need to implement checkpoints to make sure that happens," says Ms. Prince.
4. Trending. Hospital administrators should document each billing complaint patients report. This enables staff to identify the root cause of negative financial interactions and turn that data into actionable process improvements, says Ms. Prince. "You are always going to have patient complaints. The idea is to recognize the opportunities and challenges to improvement moving forward."