How to Create a More Effective Patient Financial Experience to Improve Post-Pandemic Collections

Surprise billing. It’s a term we’re all familiar with, one describing a too-frequent occurrence where patients receive large bills for services they didn’t realize weren’t covered. The primary culprit is an unexpected hospitalization or ED admission where treatment is provided by an out-of-network (OON) provider—a situation patients have no control over. The patient’s insurer—considering they are covered—is required to pay the provider a reasonable rate, typically as part of a risk-sharing model [1]. The provider can then bill the patient for the balance of the charges. So the patient has to pay their normal portion of the bill as well as the remaining balance from the OON providers.

Now add COVID-19 to the equation. The typical cost to treat a COVID-19 patient is in the tens of thousands, of which commercial payers will reimburse just over half [2]. And reimbursement from Medicare and Medicaid are only a fraction of that amount. This leaves patients—who may already be struggling financially due to loss of employment—to potentially end up with a significant balance. It’s a perfect storm in terms of surprise bills.

Research from the Kaiser Family Foundation shows that, on average, 18% of emergency department visits result in at least one out-of-network charge [3].

The consequences of huge medical bills can be devastating to patients and their families in normal times, let alone during a pandemic. They’re left with little recourse other than borrowing from relatives, taking out second mortgages, or even selling their homes. These situations can destroy a family’s credit record and inhibit their ability to rent an apartment, purchase a home or automobile, or get loans in the future—all at no fault of their own. Fortunately, for now, landlords, mortgage companies, and banks aren’t allowed to evict renters or foreclose on homeowners. But no one knows how long the financial repercussions will last once COVID-19 passes. Providers need to prepare now to mitigate the impact of the high costs of the virus for the patient. If patients can’t pay, both they and the provider suffer.

Medical issues are responsible for nearly 67% of all bankruptcies in the US 9 [4].

Beyond the financial impact of a surprise bill, the experience can, understandably, damage the patient-provider relationship. When patients believe their provider or local hospital cares only about collecting, it can cause anger and resentment and lead patients to avoid the provider in the future. And when patients can’t pay, they may put off needed care, which can lead to costly readmissions, poor care outcomes, and reduced reimbursement [5]. These situations can also harm the provider’s brand reputation in the communities they serve.

67% of Americans surveyed say they are “very worried” or “somewhat worried” about being able to pay for an unexpected medical bill [6].

Reframing the patient financial experience

While legislation to help resolve the issue of surprise billing is stuck in the Washington quagmire, patients need their providers to take action now to help—especially in light of the cost of COVID-19 treatment. By doing so, providers can protect themselves from bad-debt write-offs while, at the same time, protecting their patients’ health and financial well-being.

Set the stage for a positive financial experience before the patient even comes through your doors. Develop a patient access process designed around the patient. That means trading the typical one-size-fits-all process—taking co-payments and deductibles and billing patients for the rest—to a more proactive model based on each patient’s unique financial situation. Can the patient afford a $150-a-month payment for 24 months? Have a process in place to offer patients a flexible, customized payment plan before they leave the hospital. In this way, providers are more likely to collect without the need to place accounts with a collection agency. And patients gain greater peace of mind knowing their provider is a true partner in their healthcare journey.

Train your staff on the art of compassionate communications so they can have more positive, effective financial conversations with patients. For patients already struggling with stress, anxiety, and fear due to the severity of COVID-19, being treated with dignity and a calm, reassuring demeanor helps lessen that pressure. These conversations should include education about the patient’s full financial responsibility, not just their co-pays and deductibles. Patient responsibility estimates are an essential part of the process. Staff can print them out so the patients can see the information for themselves. You can also have staff gently remind patients that the amount owed is a stipulation of their insurer and the plan they chose, not the provider. This type of patient-centric financial experience helps position providers as advocates committed to helping patients afford the care they need, not as adversaries just trying to get money.

Identify opportunities for financial assistance. An estimated 45% of nonprofit hospitals bill patients who would qualify for financial assistance [7]. This adds up to an estimated $2.7 billion in uncollected balances and results in undue financial pressure on patients. It also means hospitals miss out on much-needed post-pandemic revenue unnecessarily. Providers should make this a standard part of the patient access process. Once an opportunity is identified, providers need to be diligent about getting the application filled out properly and submitted in a timely manner.

Provide patients with payment options based on their preferences. This means offering self-select payment plans and the ability to rollup future charges for themselves and other family members. Provide a patient-friendly payment portal where they can set up automated payments and store credit card or bank information to streamline future payments. It is also important to offer multiple payment options so they can pay when, where, and how it’s most convenient for them. This includes digital payments, payments through the mail, electronic payments, and voice-activated phone payments.

Your patients need your help now

We can’t control the speed at which surprise-bill legislation progresses. Unfortunately, COVID-19 is likely to exacerbate the problem. But there are things providers can do right now to help their patients get the care they need while protecting their own bottom line. Implementing a patient-centric financial experience is the place to begin.