Every day, healthcare finance professionals conduct sensitive financial discussions with patients. But there have been no accepted, consistent best practices to guide them in these discussions—until now.

On Oct. 28, HFMA announced Patient Financial Communications Best PracticesTM that provide tangible guidance for communicating with patients about their financial responsibility for health care.

“Healthcare financial interactions can be complex and confusing because of complicated payment structures, dozens of different payers and forms, and varied government programs,” says HFMA president and CEO Joseph J. Fifer, FHFMA, CPA. “When you add the reality that patients are becoming responsible for greater proportions of their healthcare costs, clear guidelines and communication are more important than ever.”

These voluntary practices address the areas where best practices are most urgently needed, focusing on financial discussions that take place in advance of a healthcare service, at the time of service, in the emergency department (ED), and in other care settings.

The best practices, which were developed by a broad group of healthcare stakeholders, provide definitive guidance about when and where patient financial discussions should take place and who should participate in them. The best practices also address the specific topics to include in patient financial discussions and provide basic parameters for those discussions. Finally, they include a measurement criteria framework for guiding evaluation of an organization’s voluntary compliance.

When and Where to Have Patient Financial Discussions

In choosing a PFCTM setting, organizations should first and foremost respect patient privacy. Conversations should occur in a location and manner that are sensitive to the patient’s needs.

Discussions at the time of service. The best practices specify that, in the ED setting, no patient financial discussions should occur before a patient is screened and stabilized, in accordance with the Emergency Medical Treatment and Active Labor Act (EMTALA) and other federal, state, and local regulations governing the ED.

If the medical screening determines that a patient has an emergency medical condition, the financial discussion should occur during the discharge process. For patients who do not have an emergency medical condition, following the medical screening, discussion may occur during either the registration or discharge process.

Outside the ED setting, discussions may take place during the registration or discharge process in a location that does not disrupt patient flow.

Across all care settings, if a patient consents to a financial discussion during a medical encounter to expedite discharge, the best practices support that choice, providing that the discussion does not interfere with patient care or disrupt patient flow.

Discussions in advance of service. Discussions should use the most appropriate means of communication for the patient, and may occur via outbound contact to the patient, inbound contact from patients making inquiries, or through the scheduling or contact center at the time an appointment is made. The best practices stipulate that a reasonable attempt should be made to have the discussion as early as possible, before a financial obligation is incurred (i.e., before care is provided). Timely discussions help ensure that patients understand their financial obligation and that providers are aware of the patient’s ability to pay and/or the source of payment.

Who Participates in Patient Financial Discussions

For routine scenarios, such as patients with insurance coverage or a known ability to pay, financial discussions should take place between the patient or guarantor (i.e., the person responsible for payment of the bill) and properly trained provider representatives. For nonroutine or complex scenarios, such as uninsured or underinsured patients, a financial counselor or supervisor should be involved, according to the best practices.

Recognizing that health coverage is complicated and not all patients are well equipped to navigate this terrain, the best practices specify that patients should be given the opportunity to request a patient advocate, family member, or other designee to help them in these discussions.

Topics Addressed in Patient Financial Discussions

The practices detail typical elements of patient financial discussions, including provision of care; registration, insurance verification, and financial counseling; patient share; prior balances (if applicable); and balance resolution.

Provision of care. The practices state that ED patients should be informed that their ability to pay will not interfere with treatment of any emergency medical conditions. Uninsured ED patients should also be informed that the goal of collecting information is to identify paying solutions or financial assistance options that may assist them with their obligations for the ED visit.

“With the advent of the Affordable Care Act’s insurance marketplaces and the expansion of Medicaid in some states, it is more important than ever for hospitals to help patients understand their coverage options,” says Richard L. Gundling, FHFMA, CMA, HFMA vice president, healthcare financial practices. “Inevitably, some patients will learn about these new coverage options for the first time when they are in need of emergency care.” 

Across all care settings, it is important to have clear and publicly available policies on how to interact with patients with prior balances. Also, providers should have clear definitions of elective and nonelective procedures, according to the practices. These definitions also should be made available to the public.

For nonelective services (as defined by the provider), patients should be informed that their ability to resolve any prior balances, or their share of the services they are currently receiving, will not affect provision of care.

Prior to receiving elective services (as defined by the provider), patients are obligated to make satisfactory payment arrangements. Those who have prior balances should be informed if the provider’s policies regarding prior balances mean the service will be deferred. “It is important to note that this does not mean patients should be required to pay a prior balance in full before receiving an elective service,” Gundling says. “Instead, the practices call for the patient to make mutually acceptable payment arrangements to resolve the outstanding balance, in accordance with whatever policies a hospital may have in place.”

Registration, insurance verification, and financial counseling. It is worth restating: In the ED, no patient financial discussions should occur before a patient is screened and stabilized. Once a patient is stabilized, basic registration information, including demographics and insurance coverage, may be gathered, and the potential need for financial assistance may be determined. The provider representative should review insurance eligibility information with the patient to ensure the information is accurate.

If appropriate, the patient may be referred to a financial counselor and/or offered information regarding the provider’s financial counseling services and assistance policies. Providers should have a widely publicized toll-free number for patients to call to receive assistance in financial matters and address any concerns they may have. “It can be difficult to focus on financial matters and urgent health matters at the same time,” Gundling says. “This practice recognizes the importance of making it convenient for patients to ask questions when they are feeling up to doing so.”

Also, when patient financial communications take place in advance of service, the provider should maintain a thread of preregistration discussions and avoid repeated requests for the same information.

Patient share. Many hospitals and health systems are striving to improve their ability to provide accurate and comprehensive estimates of the patient portion for a particular service. Even as providers continue to work toward that long-term goal, much can be done to clarify patient financial responsibilities.

The PFC Best PracticesTM specify that patients should be told about the types of service providers (e.g., pathologists, radiologists, anesthesiologists, and others) who typically participate in a service. Patients should receive a written list of service provider types, upon request. Also, patients should be informed that actual costs may vary from estimates, depending on the actual services performed or timing issues related to other payments that may affect their deductible.

If appropriate, patients should be asked if they are interested in receiving information about payment options and/or about the provider’s financial assistance options.

Overall, patient share discussions should not interfere with patient care, and should focus on patient education.

Prior balances. Provider organizations should have clear policies about prior balances, and should make those policies available to the public. In addition, provider organizations should have technology that gives financial representatives up-to-date information about patient balances and financial obligations.

Balance resolution. When patients have prior balances, discussions should focus on steps toward amicable resolution. Balance resolution discussions may occur about prior balances that are being pursued for collection by the provider, a collection agency, or other organization. The provider representative may discuss with the patient the services that led to the prior balance. At the patient’s request, the provider organization should provide a written list of the services delivered, dates of service, and the resulting prior balance. If appropriate, the provider should ask the patient if he or she would like to receive information about payment options and about the provider’s supportive financial assistance programs. The provider also may proactively attempt to resolve the prior balance through insurance and financial assistance programs.

Once these steps have been fulfilled, it is appropriate to ask the patient how he or she would like to resolve the balance for the current service and any prior balance the patient may have, and to inform the patient of the timing of any collection activity.

Parameters for Patient Financial Discussions

It’s not easy to talk about money, let alone to talk about payment at times when people may be dealing with illness or an injury. That’s why one of the overarching best practices is ensuring that compassion, patient advocacy, and education are part of all patient interactions.

“Patients and their families enter the healthcare system when they are most vulnerable, and then they encounter financial processes that are challenging even to veteran healthcare professionals,” says Nancy Davenport-Ennis, president and CEO of the National Patient Advocate Foundation and a member of the group that developed the best practices. “The early, clear financial conversations described in these best practices will help give patients peace of mind and help providers receive appropriate payment—both key objectives for the healthcare system to function with fairness and compassion.”

Another best practice establishes that the provider should take the initiative to communicate with the patient about financial matters. “When the provider raises the subject, it actually takes a burden off the patient,” says HFMA’s Gundling. Communication should include verification of patient information (mailing address, phone numbers, email address, etc.) and the patient’s preferred methods for future communication.

The best practices also direct that communication should be understandable by the patient and should employ standard language. Clinicians have long used standard language in patient discussions, such as when taking a patient’s medical history, for example. Likewise, provider organizations should have standard language to guide finance staff on the most common types of patient financial communications. In developing that language, the best practices stipulate that providers should take the patient’s perspective into consideration.

The best practices also call for patient financial discussions to be reinforced with written information. During the registration or discharge process, the patient should receive written information about the provider’s supportive financial assistance programs, and a summary of the potential financial implications for the services rendered, including a phone number to call with questions. Equally important, financially supportive policies should be communicated and made available to the community.

Finally, as previously noted, patient privacy should be respected in all patient financial discussions and conversations should occur in a location and manner that are sensitive to the patient’s needs.

Compliance Framework

The steering committee developed a measurement criteria framework to guide the evaluation of an organization’s compliance. Compliance, which is voluntary, may be recognized in one of two ways: through self-attestation, which is available now, or through an external validation process, which will be in place in January 2014.

Either way, categories that are evaluated to establish compliance include an organization’s training program, process compliance, technology, feedback process and response, and executive level metrics reporting.

Training program. The best practices call for annual training on the organization’s financial assistance policies for all staff who engage in patient financial discussions, including patient access, financial counseling, and customer service representatives. Training may be provided through a variety of forums, including web-based and in-person, and may be furnished by qualified internal or external parties as deemed appropriate by a designated quality officer. Training must cover the following topics:

  • Patient financial communications best practices specific to the staff role
  • Financial assistance policies
  • Available patient financing options
  • Alternative solutions for the uninsured
  • Standard language to be used in patient discussions
  • Laws and regulations, such as EMTALA, the Fair Debt Collections Practice Act, and the Telephone Consumer Protection Act, specific to the staff role 

Process compliance. Annual observation, monitoring, and tracking of results make up the process compliance evaluation required to document compliance with the best practices. This evaluation may be performed by any organization independent of the department that is being audited, such as internal audit, compliance, quality, or a third party. The evaluation should be comprehensive and should cover all scenarios addressed by the practices that are relevant to a particular
organization.

Technology. This evaluation ensures that technology is in place to support the following:

  • Verification of insurance eligibility for current services
  • Verification of existing prior balance for current services
  • Estimated cost of the current services and the patient responsibility portion

The technology evaluation may be performed by any qualified individual or organization, internal or external.

Feedback process and response. This evaluation is designed to ensure that processes are in place to regularly solicit input and receive key stakeholders’ feedback, measure and respond to input and feedback, and ensure that patient complaints are resolved.

Executive level metrics reporting. Reports of organizational performance evaluations in the four areas described in this section should be developed, compiled into an overall compliance report, and presented to the organization’s executive leadership team on an annual basis.

From Compliance to Cultural Change

Effective patient financial communications are critical to both patient satisfaction and the financial health of provider organizations. Compliance with these voluntary best practices provides a measure of assurance not only to a provider organization, but also to the patients and communities the organization serves. 

“By following these best practices, providers are affirming their commitment to open and early communication, sharing clear information, and identifying a path for financial resolution that is fair for patients and providers alike,” says Fifer. “Going forward, providers should take this opportunity to leverage the best practices, ensure broader education and awareness throughout their organizations, and make these principles an integral part of their culture.”


Karen Thomas is a senior editor in HFMA’s Westchester, Ill., office.


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How the Best Practices Were Developed 

To develop the best practices, a broad group was convened representing consumer and trade groups and other affected stakeholders, listed below, to serve as a steering committee. The committee used a consensus process in its monthly meetings to develop the best practices over the course of a year. Their work was informed by public comments received over a six-week period ending in July 2013.

The project was overseen by an advisory panel chaired by Gov. Mike Leavitt (R-Utah) that includes former Sen. Tom Daschle (D-S.D.), former Sen. Bill Frist (R-Tenn.), former Secretary of Health and Human Services Donna Shalala, and attorney Jamie Gorelick.

Patient Financial Communications Best Practices Steering Committee

Pamela Atkinson
Nationally recognized advocate for the poor

Thurbert Baker (Co-Chair)
Attorney General (Ret.), Ga.
Partner McKenna Long & Aldridge

Gerald E. Bisbee, Jr., PhD
Chairman and CEO
The Health Management Academy

Richard L. Clarke, DHA, FHFMA (Co-Chair)
Retired President and CEO
HFMA

Aaron Crane
Chief Financial and Strategy Officer
Salem Health

Nancy Davenport-Ennis
Founder and CEO
National Patient Advocate Foundation

Joseph J. Fifer, FHFMA, CPA
President and CEO
HFMA

Karen Ignagni
President and CEO
America’s Health Insurance Plans 

Mike Jacoutot
Former CEO
Optimum Outcomes

Patricia Keel
CFO
Good Shepherd Medical Center

Maureen Mudron
Deputy General Counsel
American Hospital Association 

James E. Sabin, MD
Clinical Professor
Departments of Population Medicine and Psychiatry
Harvard Medical School

Mary A. Tolan
Founder and Chairman
Accretive Health

Robert L. Wergin, MD
President-Elect
American Academy of Family Physicians 

Bert Zimmerli
Executive Vice President and CFO
Intermountain Healthcare

Publication Date: Friday, October 25, 2013