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Guidance for understanding and communicating about the price of health care.
Transformation toward value-based healthcare is reshaping the delivery of care, patient expectations, and payment structures.
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From the President: Providers face an important, and inescapable, challenge to improve the pricing structures and practices in the U.S. healthcare industry.
From the President: The private sector seems to be leading the way in reforms aimed at promoting coordinated care—but it’s still a somewhat bumpy road for providers.
The Medical Clinic of North Texas launched a population health initiative in 2010 that has involved working with self-insured companies to manage the health of their employee populations.
From the President: HFMA’s multiorganizational task force on price transparency is set to release its report in mid-April.
Scott Schwab and James King offer suggestions on how healthcare providers can best respond to the call for greater price transparency.
Hospitals must cope with insurer companies’ use highly restrictive networks for the plans that they sell.
CMS recently made headlines by releasing charge and Inpatient Prospective Payment System payment information at the MS-DRG level for hospitals nationwide.
Payer deductions as a percentage of hospital charges submitted to payers increased in 2012 across all hospital classes and payers but the gap between government and commercial payers remains large.
High-payment hospitals enjoy a 3-to-1 advantage in average market share over low-payment facilities. This position in the market has enabled hospitals to demand higher levels of payment.
Transparency: Restructuring chargemasters so that prices better reflect the cost of care requires a discussion about transparency.
High prices in the United States pose an inescapable challenge in our healthcare system.
If your hospital is perceived as high cost, you may want to take action to address the misperceptions.
Spectrum Health, an integrated health system based in Grand Rapids, Mich., has focused on transparency both as a provider of health care, through the Spectrum Health network of hospitals and clinics, and as a payer, through Priority Health, the system's health plan.
Spectrum Health. Spectrum Health has been publishing price information for its Grand Rapids hospitals on the Spectrum Health website since 2006. Price estimates, which are updated annually, are offered for a wide range of common adult procedures—including inpatient and outpatient procedures and childbirth services—and for common diagnostic procedures. For each procedure, Spectrum provides the average estimated price, the average Medicare payment, the average Medicaid payment, and the average insurance payment.
Uninsured patients are advised of their potential eligibility for Medicaid, Medicare, or other forms of financial assistance as well as payment options offered through Spectrum Health and are encouraged to contact a customer satisfaction/patient billing representative to discuss options. For insured patients, the site provides a list of insurance companies and plans accepted by Spectrum Health as well as contact information for the plan where it is available. For procedures not listed on the website or for additional questions related to pricing, the website provides both phone contact and secure email options to reach a pricing specialist, with the promise of a response by the end of the following business day. A frequently asked question page and glossary of terms provide additional resources for patients.
Throughout the site, Spectrum Health advises patients that the estimated prices do not include physicians' fees for the patient's surgeon, anesthesiologist, or radiologist, and that those fees will be billed separately. To help the patient access pricing information for these services, the website provides contact information for the medical groups that Spectrum Health uses to provide anesthesiology, pathology, and EKG interpretation services.
Priority Health. Spectrum Health's health plan, Priority Health, has developed a price transparency tool for its members to support three goals:
Engage customers in their healthcare decisions
Promote accountability among providers
Address the fundamental issue of healthcare costs
Priority Health contracted with Healthcare Bluebook, a company with expertise in developing transparency tools for self-funded employers, to develop the transparency tool for its members. The tool focuses on approximately 200 discretionary (and thus "shoppable") services. Approximately 50 percent of Priority Health members require one or more of these services in a given year, and these services together represent approximately 20 percent of Priority Health's total medical spend.
The transparency tool focuses on variations in contracted rates at the facility level. As shown in these screen shots, color-coded lists of healthcare facilities that offer the desired service use green to indicate those that are at or below a fair price, yellow to indicate those that are slightly above fair price, and red to indicate those that are among the most expensive. The list also identifies facilities that will not disclose prices and advises members to contact them directly for pricing information.
As of December 2013, 47 percent of healthcare facilities in the Priority Health network had agreed to have their prices disclosed; Priority's goal is to increase this to 75 percent by 2015.
The tool was initially offered exclusively to members when it went live in August 2013. As of January 2014, Priority Health is also offering access to providers so they can consult more knowledgeably with patients who need a referral to facilities that will offer the desired level of value in terms of quality, patient experience, and price.
Priority Health will continue to improve the price transparency experience for members by:
Personalizing information for members with cost estimators and benefit summaries
Linking the Healthcare Bluebook tool to doctor-search tools and patient education
Adding to the discretionary/shoppable procedures included in the tool
In early 2013, Maricopa Integrated Health System of Phoenix—a safety net system—became the first healthcare system in Arizona to publish self-pay prices on its website for the state's 10 most frequent inpatient and outpatient procedures, says Mary Lee DeCoster, vice president of revenue cycle at Maricopa and a member of HFMA's Price Transparency Task Force.
To determine the self-pay prices, Maricopa established its own task force that included Decoster as well as the system's chief medical officer, COO, vice president of finance, vice president of ambulatory services, key department chairs, and physicians from the system's employed medical group. During a period of four months, the task force developed a sliding scale with payment categories based on the federal poverty level.
As of Jan. 1, 2014, Arizona requires hospitals, ambulatory surgery centers, laboratories, diagnostic imaging centers, and urgent care centers to post the "direct pay price" of the 50 most frequent inpatient procedures (based on diagnosis-related group, or DRG) and the 50 most frequent outpatient procedures (based on Current Procedural Terminology, or CPT, code) on their websites. This example of a Copa Care price estimate shows the price a self-pay patient would pay for a breast biopsy.
Maricopa is also making prices for some services more transparent by offering a single, bundled payment for an episode of care. The system offers a low-cost, bundled maternity package that includes the obstetrician’s fees as well as the first pediatric visit. Patients also receive a discount of approximately $1,000 if they prepay. As a result, the hospital is delivering 50 to 60 more babies each month. In 2014, Maricopa plans to build more bundled packages for elective procedures, including some reconstructive surgeries.
The Maine HealthCost website is maintained by the Maine Health Data Organization, an independent executive agency established by the Maine legislature in 1996 "to collect clinical and financial health care information and to exercise responsible stewardship in making this information accessible to the public." The site is one of only two state-mandated transparency websites nationwide that received a grade of "B" from Price Transparency Task Force members Catalyst for Payment Reform and Health Care Incentives Improvement Institute in their 2014 Report Card on State Transparency Laws. (The other state receiving a "B" grade, the highest grade awarded in the 2014 report, was Massachusetts).
The site is recommended in part because it provides data on actual paid amounts for a variety of procedures and services. The "Cost Compare" function on the site allows comparison of average prices for procedures at different facilities in the state. The site’s resources page also provides links to cost calculators that health plans offer for their subscribers in Maine.
The American Hospital Association fully supports the recommendations of the HFMA Price Transparency Task Force. The AHA has long supported the need to provide patients with healthcare price and quality information and has worked with stakeholders, including HFMA, to provide useful information that will help patients make healthcare decisions.
We believe that it will take everyone—providers, insurers, employers and government—working together to provide patients with the information they need. Hospitals are committed to improving how consumers get information on the amount they will be expected to pay for care. This includes helping patients understand their hospital bills by finding better ways to explain them in user-friendly terms. Providing understandable and useful information about the price of hospital care is one of the ways America’s hospitals are working to improve the health of their communities.
President and CEO
American Hospital Association
Ensuring consumers have the support and information they need to maximize the value of their healthcare dollars has been a longstanding priority for health plans. These recommendations build on health plans’ innovative tools that empower consumers in their decision-making. Increased transparency also shines a spotlight on the need for all stakeholders to address the underlying drivers of healthcare costs.
President and CEO
America's Health Insurance Plans
Transparency in price information is a reflection of our commitment to respect the dignity of the persons we serve. Patients and their families deserve complete information about their care and price information is an important component of what they need to make decisions about that care.
Sister Carol Keehan, DC
President and CEO
Catholic Health Association of the United States
The American College of Physician Executives, representing more than 11,000 high-level physician leaders in all types of healthcare organizations across the U.S. and 46 countries, is pleased to offer its support for the policy recommendations included in this important new study on price transparency.
The implementation of reform, including the Affordable Care Act, shined a bright light on this increasingly difficult issue, and the time for change is now. As patients assume greater responsibility for their healthcare needs, the demand for accurate, reliable information will continue to grow. The healthcare industry has an obligation to all citizens—the insured and the uninsured—to make the procurement of care as simple and accessible as possible. To continue along the current path would risk creating prolonged and greater mistrust of the medical community as a whole.
As an organization dedicated to the lifelong development and support of physician leaders, ACPE is all too aware of the challenges involved in creating greater price transparency. We believe the recommendations included in this report are an important first step toward meaningful reform. ACPE stands ready to assist in any way necessary as you move forward.
Peter Angood, MD, MD, FRCS(C), FACS, MCCM, President and CEO, ACPE
Mark Werner, MD, CPE, FACPE, Chairman, ACPE Board of Directors
Engaging patients in their healthcare decisions is a top priority for physicians. MGMA is pleased to be part of the Price Transparency Task Force and join with key stakeholders to determine ways that patients can better access price information to help guide healthcare decisions. Readily available price and quality information is crucial to helping patients make informed choices about their care
Susan L. Turney, MD, MS, FACP, FACMPE
President and CEO
Medical Group Management Association
As the U.S. healthcare industry continues to evolve into a more open and transparent care system, it has been rewarding to represent a major teaching safety net health system in the recent work related to pricing transparency. The HFMA Price Transparency Task Force has included representation from health systems, hospitals, insurance plans, and the consumer in its work to develop guidelines for all constituents affected by healthcare pricing. The discussions were thoughtful and energetic; the final product establishes the initial baselines to create transparency. I endorse the findings and recommendations in this report.
Mary Lee DeCoster
Vice President, Revenue Cycle
Maricopa Integrated Health System
Most Americans agree healthcare pricing is opaque. HFMA has provided a great service by convening diverse organizational stakeholders who comprised the task force that developed this report. It establishes a common language and puts forth sensible principles, both necessary to achieve price transparency. This HFMA report is likely to become a must-have resource for anyone mounting an effort to establish clear healthcare pricing.
Community Health Advisors, LLC
The ability for consumers, whether insured or not, to have easy access to meaningful information about the price of healthcare services and the total expected price of medical episodes or events, has become a national priority for good reasons. The share of medical expenses paid by individual consumers is at an all-time high and projected to increase. Consumers should be able to know the price of any service or product purchased before becoming liable to pay the bill. The HFMA has taken a bold and important step to lay out the fundamental principles that all industry stakeholders should abide by to get consumers the pricing information they need and deserve. HCI3 was privileged to be a part of the team that developed this report and supports its conclusions and calls to action.
François de Brantes
Health Care Incentives Improvement Institute
Price transparency is important to all of us as healthcare consumers and in our roles as providers or payers of care. It has been a pleasure to work with HFMA’s Price Transparency Task Force in developing practical solutions for improving price transparency. By following these recommendations, we can help demystify consumers’ financial responsibility for their care and equip them to make better-informed healthcare decisions.
Robert Galvin, MD
Chief Executive Officer, Equity Healthcare
Operating Partner, The Blackstone Group
Maintained by a wholly owned subsidiary of the Wisconsin Hospital Association, the Wisconsin PricePoint system enables patients to do web-based (wipricepoint.org) searches by facility for inpatient, outpatient surgery, emergency and urgent care, and other hospital outpatient services. Information varies by category, but typically provides average and median charges for the provider, a comparison of that provider's charges with the charges of other providers at the county and state level, and information on the provider's volume for the selected service. Patients can also run comparisons between providers. At the time of this report, a total of 11 states, including Wisconsin, use the PricePoint system.
United's myHealthcare Cost Estimator (myHCE), launched in 2012, consists of an online and mobile calculator that allows customers to compare the prices of in-network hospitals and physicians across approximately 300 Care Paths or treatment episodes. The estimates are generated at the Care Path or treatment episode level to help members understand the services they should expect to receive, and include the estimated costs of the services that typically make up a treatment episode, such as surgeries, lab tests, radiology tests, and office visits. Using the member's specific plan design and benefits, including any deductible and account balances that may apply, the myHealthcare Cost Estimator generates personalized estimates of a member's out-of-pocket expenses based on the current fee schedule or contracted rates the plan has negotiated with in-network providers. For services where a fee schedule or contracted rate is not available, estimates are based on historical claim averages.
This contains a listing of the healthcare organizations that participated in the development of HFMA's Price Transparency initiative.
Many Americans who are concerned about the cost of health care and want to be better healthcare consumers are also frustrated by the lack of ready access to information on healthcare prices.
Convened by HFMA, a task force made up of health plans, providers, consumers, employer groups, physician groups, and others has released guiding principles and recommendations for improving price transparency in health care.
Geisinger's MyEstimate® product provides patients with a self-serve portal for out-of-pocket estimates on nearly 300 services, generally the most frequently used ambulatory diagnostic services. Geisinger out-of-pocket estimates incorporate both employed physician and hospital expenses. Patients enter their insurance information, and estimates are tailored to their verified benefit coverage and location of the service requested (hospital-based vs. physician office or freestanding ambulatory setting). This product answers the consumer's question, "What will the encounter cost me?" The portal receives more than 850 "hits" every month.
Because the prospective patient's insurance coverage is verified in advance, the estimate takes into consideration negotiated insurer rates rather than gross charges. The application provides additional information such as pre-authorization or primary care physician referral requirements.
The self-serve portal provides insurance verification and out-of-pocket options for Geisinger's largest contracted payers (by volume) and Medicare fee-for-service. This example of an estimate for an echocardiogram shows the financial information that a patient would receive through the self-serve portal.
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For unlisted payers or services, such as an out-of-pocket estimate for heart valve replacement surgery, the online portal provides contact options for financial counselor assistance.
Patients may connect with a financial counselor by creating an on-line request, by calling, or by visiting a local service location. Uninsured individuals are connected with a financial counselor to pursue funding options such as state program enrollment, interest-free payment plans, or uncompensated care discounts. Financial counselors conduct about 1,000 pricing interviews per month.
Geisinger financial counselors are CMS Certified Application Counselors (CACs) tasked with assisting consumers with creating healthcare marketplace accounts and evaluating options to purchase health insurance coverage. As of Jan. 1, 2014 CACs provide presumptive eligibility in Pennsylvania’s Medical Assistance program.
Geisinger's Financial Counselors, Certified Application Counselors, and MyEstimate® comprise its Patient Advocacy program.
Future enhancements planned for 2014 to the geisinger.org portal will provide open access to average Medicare reimbursement rates for selected services, i.e., inpatient and ambulatory surgical, ambulatory diagnostic services, etc.
Patients and/or prospective consumers will be able to calculate their own out-of-pocket estimates based upon their unique service and insurance coverage. When there is no patient responsibility established for the service in question, possibly for Medicare and Medicaid, that will be noted. There will be links to MyEstimate® on every navigation screen for patients who wish to have more exact estimates.
Geisinger provides a link to the quality report(s) for quality measures reported by The Joint Commission, the Pennsylvania Health Care Cost Containment Council, Pennsylvania Healthcare Alliance, and Geisinger Health Plan HEDIS Quality reports. For example, the patient who received the out-of-pocket estimate for heart valve replacement surgery could access quality information from the Pennsylvania Health Care Cost Containment Council through the Geisinger quality portal. This page also provides a link to Hospital Compare reporting which takes the consumer to the Medicare.gov site. Patients who perform this quality report search would now have both financial and comparative quality information.
In 2010, Aetna introduced its Member Payment Estimator, an online tool that enables members to estimate their actual costs based on their plan design, their specific medical conditions, and the providers they choose.
A number of health plans, provider organizations, state hospital associations, and other groups have already developed transparency tools.
A pricing system should be simple to administer and communicate, should help patients take charge of healthcare purchasing decisions, and should gain consumers’ trust as they seek to compare prices.
TriMedx helps health systems control costs and uncover savings opportunities by optimizing the clinical engineering function.
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.
A leader from McKesson discusses how healthcare reform is forcing hospitals and health systems to take a different approach to capacity management and patient flow.
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.
Emad Rizk, MD, president and CEO of Accretive Health, discusses the uncertainty facing hospitals and the transitions affecting revenue cycle management.
This white paper, written by Apex Vice President of Solutions and Services, Carrie Romandine, discusses the importance of patient segmentation and messaging specifically related to the patient revenue cycle. Applying strategic messaging that is tailored to each patient type will not only better educate consumers on payment options specific to their billing needs, but it will maximize the amount collected before sending to collections. Further, targeted messaging should be applied across all points of patient interaction (i.e. point of service, customer service, patient statements) and analyzed regularly for maximized results.
Jim Bohnsack, vice president, solution & corporate development for Conifer Health Solutions, explains how the company helps healthcare providers leverage data to deliver better outcomes while optimizing reimbursement for all payment arrangements.
This white paper, written by Apex President Patrick Maurer, discusses methods to increase patient adoption of online payments. Providers are now seeking ways to incrementally collect more payments due from patients as well as speeding up the rate of collections. This white paper shows why patient-centric approaches to online payment portals are important complements to traditional provider-centric approaches.
Steve Scibetta, senior director of channel sales for Ontario Systems' healthcare product line, shares insights into effectively managing receivables.
Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
Elena White, vice president of risk, quality, and network solutions for Optum, discusses how healthcare providers can leverage data and technology as they enable risk in their organization.
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.
Somnia President and CEO Marc Koch, MD, MBA, explains how hospitals can drive transformative change in the perioperative experience for outstanding clinical and financial outcomes.
With the ICD10 deadline quickly approaching and daily responsibilities not slowing down, final preparations for October 1 require strategic prioritization and laser focus.
PMMC President Roger L. Shaul discusses the effects of healthcare reform on revenue cycle management and how PMMC's products help clients adapt to a changing financial environment.
Read how Gwinnett Medical Center provides clear connections to financial information, offers multiple payment options for patients, and gives onsite staff the ability to collect payments at multiple points throughout the care process.
Greg Burgess, Founder and Chief Product Officer at Burgess Group shares insights and opportunities for payment integrity in the rapidly changing healthcare IT landscape.
Read how Orlando Health was able to perform deeper dives into claims data to help the health system see claim rejections more quickly–even on the front end–and reduce A/R days.
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.
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
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.
Copyright 2016, Healthcare Financial Management Association.
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