Integrated delivery systems may have built-in advantages for delivering consolidated and simplified medical bills.


June 2—The share of medical costs that patients are becoming responsible for paying continues to increase with the spread of high-deductible health plans. But frustration also is growing amid confusing medical bills that reflect the complexity and fragmentation of the healthcare system.

This problem was recognized by the U.S. Department of Health and Human Services (HHS) last month when it challenged healthcare stakeholders to design a bill patients can understand.

In stating its case why such an effort was necessary, the HHS noted that patients “often receive bills from multiple hospitals, doctors, labs or specialists for the same episode of care that vary in content, presentation and use of health industry jargon.” As a result, according to the HHS, it’s “difficult for patients to understand what they owe, what their insurance plan covers, and whether the bills are correct or complete.”

High deductible plans, narrow networks—which can produce surprise out-of-network charges—and consumers who focus on the cost of monthly premiums above all else in picking exchange plans are contributing to this issue, according to Jim Landman, PhD.

“It’s creating a lot of confusion,” said Landman, who explained how in-network surgeons may inadvertently contribute to the problem by utilizing out-of-network assistants or pathologists whose services are not covered by their patients’ insurance.

He added that even patients who are adept at navigating the healthcare system leave their smart shopper habits behind when it comes to emergency care or non-elective surgery.

Gross Versus Net

For many patients it remains a puzzle how the number on top of the bill (what a hospital charges) produces the number on the bottom (what portion the patient will ultimately be responsible for). Variations that complicate this equation include the reimbursement rates organizations negotiate with individual health plans and the status of a patient’s deductible, copayment or coinsurance responsibility, according to Sandra Wolfskill, HFMA director of healthcare finance policy, revenue cycle.

“The most confusing part of medical bills to patients is understanding the adjudication process that starts with gross charges and eventually nets down to what the patient owes,” Wolfskill said in an e-mail. “Gross charges cause much of the confusion--just as the window sticker on a new car does not directly relate to what one finally pays for a new car.”

She explained how the gross charge for an outpatient MRI may be listed as $1,500. But then a plan may have negotiated an 18.5 percent (-$277.50) discount resulting in a net charge of $1,222.50. Of this, the patient may have to pay the remaining balance of their deductible plus a 20 percent co-insurance obligation. The final tally has the patient paying $644.50 and the insurance company picking up the remaining balance of $578.

The radiologist’s bill is separate and may or may not be in the same network as the hospital, which results in further charge variation.

States are looking to limit medical bill surprises, Landman said, with many patterning their legislation after a law that went into effect March 31, 2015 in New York.

Additionally HFMA released best practices in 2013 that seek to improve and standardize how healthcare organizations communicate with patients about their financial responsibilities.

The HFMA later created a Patient Financial Communications Compliance program to recognize mastery of the best-practice components. Wolfskill said 131 hospitals and clinics formally adopted the best practices during the first year of the compliance program, but it’s believed many more are using the practices but have not completed the recognition application.

Integration Advantages

Integrated delivery systems like Danville, Pa.-based Geisinger Health System and Intermountain Healthcare in Salt Lake City, Utah, have some built in advantages.

“We can give a more holistic view of your charges compared to a fragmented view if your hospital is owned by someone, the provider is owned by someone else, and the ancillary services by someone else,” Angela Long, associate vice president of revenue management at Geisinger, said in an interview. “No matter where you go in the Geisinger system, you will get one statement.”

Geisinger is participating in the HHS initiative on more understandable billing and undertook a full redesign of its patient statement in 2008. But, Long added, the process goes beyond handing an easy-to-read statement and then saying “Here’s how much you owe, now pay me.”

The more a price can be determined upfront, the better. But there’s no one-size-fits-all price, Long said, explaining that a patient’s individual health needs and insurance coverage will determine their final cost.

Online tools help. These include posting a customer-service phone number, developing functions to determine whether a patient’s insurance is accepted, and posting a frequently asked questions page and a glossary of terms, Long said. This sets the stage for arranging discussions with a financial counselor and setting up a payment plan if necessary.

Getting Feedback

Geisinger’s process is continually reviewed and customer-service staff feedback is collected, such as determining the top three reasons for patient calls.

For about seven years, Intermountain has used feedback from annual meetings with four regional financial advisory groups to revise its billing processes. This feedback has led to printing a number to call for financial assistance on the back of medical bill envelopes and the development of a one-page financial-assistance form with one side printed in English and one side printed in Spanish, Todd Craghead, vice president of revenue cycle for Intermountain, said in an interview.

Like Geisinger, Intermountain consolidates accounts from medical groups and providers into one bill. Further consolidation is being worked on for members of the system’s Select Health insurance plan. This includes consolidating into one bill all charges for all family members covered by a plan member’s insurance, Craghead said.

Currently, plan members get their medical bills and a statement explaining what is covered by Select Health benefits in the same envelope. Craghead said Intermountain is working on consolidating these into a one-page statement with the top explaining what the payer is covering from the provider charges listed on the bottom.

Craghead said Intermountain is “making valiant efforts to connect with all the payers” its patients are covered by at its 22 hospitals, but out-of-network charges still sometimes appear on bills for patients who receive care from some providers at rural hospitals. He added that both payers and providers are working to make medical bills less confusing.

“I believe payers are being more active in stepping up to obtain an estimate for services from whatever providers they have a prior agreement with,” Craghead said. “And organizations are investing in online tools to make estimates.”

Growing Awareness and Sympathy

Rebecca Palm, co-founder and chief strategy officer for Copatient, agreed that health plans are trying to simplify billing for their members while providers have “increased understanding and sympathy for what consumers are facing.”

Her company aims to help consumer better manage their healthcare expenses using crowd-sourced data and a team of former clinicians and billing and coding professionals to serve as advocates for patients to resolve billing errors or inappropriate charges.

Increasing payer and provider billing simplification effort, Palm added, are “growing in lockstep with consumer responsibility” for medical expenses.


Andis Robeznieks is a freelance writer based in Chicago. Follow Andis on Twitter at @AndisRobeznieks.

Publication Date: Friday, June 03, 2016