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In response to requests from its patients, Wooster Community Hospital, Wooster, Ohio, offers bundled prices for dozens of common procedures and services to self-pay patients. Popular services include:
About 5.6 percent of Wooster’s patient population is self-pay, which includes members of the Amish community. Wooster always extends a 25 percent discount off its chargemaster prices to self-pay patients who pay in full within seven days of service. The package prices, which include all hospital, physician, and ancillary fees, generally include a slightly bigger discount. Payments for package prices are collected at the time of the service.
“Regardless of the exact discount, the customer usually perceives it as a better value because this eliminates the unknown,” says Scott Boyes, director of fiscal services and CFO. “When they walk out after their services are rendered, they are finished and they are not going to get a bill.”
Boyes’ staff works individually with local surgeons, obstetricians/gynecologists, radiologists, and other specialists—some of whom are employed by the hospitals—who are willing to offer package pricing. Together they decide what services could be appropriately bundled into a package.
Then they ask other physicians—for example, pathologists and anesthesiologists—to offer a discount on their services that need to be included in a bundle.
Wooster does not have a cost accounting system to help determine appropriate prices. So Boyes starts by checking what Medicare pays the hospital and physicians for a given service or procedure. “We set the price a little higher than Medicare payments because, like most hospitals, we lose money on Medicare rates,” Boyes says. “This gives us something from which to base our pricing.”
If the total sum of all physician, hospital, and ancillary fees for a given procedure is too high to be competitive, Wooster tries to negotiate with physicians for lower fees. If consensus cannot be reached between two specialty physicians, Wooster publishes two package prices for the same procedure.
“For example, if one orthopedic group is only willing to accept X dollars for a package on a total knee, but the other group is willing to go lower, it is pointless to try and keep driving to a common price for both,” Boyes says. “I just list two different package prices in what we publish. This is the package price for Doctor X and this is the package price for Doctor Y. And then I let the consumers choose.”
Physicians who participate in the package price program introduce the bundled price option to patients when they decide to have a specific procedure or service.
These steps are followed:
Overall, the administrative burden associated with package prices is less than that required to submit insurance claims, prepare patient statements, and collect from both patients and insurers, says Kristen Shoup, the hospital’s manager of revenue cycle. “With package prices, we do have to process checks to other parties, but it is very controllable on our end, whereas when we are dealing with an insurance company, it is consistently more challenging to get the claim paid,” she says.
Wooster’s package price program is similar to that of several other hospitals in northeastern Ohio. Wooster posts most of its package prices on its website, but otherwise does not promote the program, which began in response to requests from members of the area’s large Amish community, all of whom are self-pay. Because members of the Amish community expect to get package prices for all services, they will call Wooster and other area providers to ask about needed services that are not listed in the price book. “If there’s some procedure that’s not listed, we will go ahead and assemble a package price,” Shoup says.
Wooster representatives meet with Amish leaders each year to provide its package prices, which are published in a book that members of the Amish community use to evaluate their options.
“They don’t like surprises, and they don’t like bills from four different providers,” Boyes says.
For that matter, neither do hospitals and physicians. Wooster and the physicians it works with are amenable to sizable discounts for the bundled services because they are paid in full at the time of service. Thus, there are no insurance claims to process, billing and collection expenses, or write-offs of uncollectible debts.
Wooster began offering package prices several years ago after learning that another area hospital was doing so. It was an easy decision, Boyes says.
“Frankly, in our area, if you’re not offering packages, you are not going to have the Amish business, because word-of-mouth is powerful in that community,” he says. “And if you are not offering packages, they perceive, rightly so, that you don’t care about their community’s business.”
The package prices are available to all patients, not just those in the Amish community, including patients with high-deductible plans who want to limit their out-of-pocket expenditures. Package prices for imaging studies are particularly popular.
“When patients need an MRI or a CT or even a PET scan, we are able to roll that together with the radiologist fee and give them a better deal,” Shoup says.
Wooster started its package price program at the request of an ear/nose/throat practice that wanted to offer competitive prices to members of the Amish community. Physician leadership is essential to making the program work, Boyes says. “Frankly, I don’t believe we would have gotten anesthesiology or pathology on board in the early days of this program if it wasn’t for one of their peers asking them to please help them provide a competitive package for the Amish community.”
The patient who pays up front wants peace of mind that the financial transaction is over. Delivering on that promise requires good communication between all providers in the package. “You don’t want to have slip ups that result in patients walking out of your hospital thinking they’ve paid everything and then a month later they get a bill because it wasn’t registered correctly,” Shoup says. “You must make sure that you have your administrative process down pat, that your communication process is effective, and that everybody involved in an encounter knows when a patient should pay a package price.”
Lola Butcher is a freelance writer and editor based in Missouri.
Interviewed for this article: Scott Boyes is director of fiscal services/CFO at Wooster Community Hospital, Wooster, Ohio, and is a member of HFMA’s Northeast Ohio Chapter.
Kristen Shoup is manager of revenue cycle, Wooster Community Hospital, Wooster, Ohio, and is a member of HFMA’s Northeast Ohio Chapter.
Publication Date: Thursday, June 05, 2014
In this Business Profile, Bruce Haupt, president and CEO of ClearBalance, discusses how a patient loan program can increase patient collections, reduce bad debt, and speed cash flow.
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
In this Business Profile, Jerry Bruno, principal with Deloitte Consulting LLP, discusses the importance of choosing revenue cycle solutions that help an organization meet the challenges of a quickly evolving healthcare environment.
No two patients are the same. Each has a very personal healthcare experience, and each has distinct financial needs and preferences that have an impact on how, when and if they chose to pay their healthcare bill. It’s no longer effective to apply static billing techniques to solve the complex challenge of collecting balances from patients. The need to tailor financial conversations and payment options to individual needs and preferences is critical. This presentation provides 10 recommendations that will not only help you improve payment performance through a more tailored approach, but take control of rising collection costs.
In this business profile, Lane Jackson, a partner in the Grant Thornton LLP Health Care Advisory Services practice, with extensive experience in overseeing system implementations and revenue cycle reorganizations, discusses best practices for elevating revenue cycle performance during an EMR implementation. Grant Thornton LLP is a sponsor of the Large System Controllers Council Affinity Group.
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In this business profile, sponsored by SSI, Jay Colfer, vice president of sales and marketing, shares how patient access solutions are reversing the trend toward increased bad debt resulting from the rise in high-deductible consumer health plans.
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
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To maintain fiscal fitness and boost patient satisfaction and loyalty, healthcare providers need visibility into when and how much they will be paid–by whom–and the ability to better navigate obstacles to payment. They need payment clarity. This whitepaper illuminates this concept that is winning fans at forward-thinking hospitals.
Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
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Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.
Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.
Kindred Hospital Rehabilitation Services works with partners to audit the market and the facility’s role in that market to identify opportunities for improvement. This approach leads to successes; Kindred’s clinical rehab and management expertise complements our partners’ strengths. Every facility and challenge is unique, and requires a full objective analysis.
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The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.
Emergency Mobile Health Care (EMHC) was founded to be and remains an exclusively locally owned and operated emergency medical service organization; today EMHC serves a population of more than a million people in and around Memphis, answering 75,000 calls each year.
Since the Physician Quality Reporting Initiative (PQRI) introduction, CMS has paid more than $100 million in bonus payments to participants. However, these bonuses ended in 2015; providers who successfully meet the reporting requirements in 2016 will avoid the 2% negative payment adjustment in 2018, so now is the time to act! Included in this whitepaper are implications of increasing patient responsibility, collections best practices, and collections and internal control solutions.
Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.
Physician practices must improve organizational efficiency to compete in this era of reduced reimbursement and escalating administrative costs.
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