The government is pushing for more transparency in pricing and is willing to put some muscle behind it.
In 2018, shortly after being confirmed as Secretary of Health and Human Services, Alex Azar told a gathering of the Federation of American Hospitals, “If we want to move to a system where we put patients more in charge of their own healthcare dollars, providers and insurers have to become more transparent about their pricing.”
He backed that statement up with a threat. “And if that doesn’t happen, we have plenty of levers to pull that would help drive this change.”
So now, as CMS encourages the practice and some states require it, physicians are trying to figure out how to make price transparency work for them. Here are some of the reasons you should be forthcoming about pricing and how to use that candor to your advantage.
There are some distinct — and obvious — advantages to letting patients know in advance what they are going to have to pay for medical care. In this age of healthcare consumerism, being up front about costs can be good for patient relations. “Price transparency increases the level of customer service and builds trust with patients,” says Andrew Hajde, senior industry adviser with MGMA.
Knowing what charges to expect can also help patients get better care. “People are delaying care because of high deductibles and copays,” explains Cristy Good, MGMA senior industry adviser. “Knowing what to expect can help them make better decisions about what care to get and when.”
And, of course, if patients know what something is going to cost, they are more likely to pay the bill when it comes due. Unexpected charges can strain patients’ budgets, and also make them feel less buy-in about the medical care they received.
As logical as all this seems, it’s not as simple as posting prices. For one thing, posted prices apply only to self-paying patients, Good points out. How much patients with insurance pays will depend on their plans. And then there is the fact that you don’t know how much an office visit, for example, will cost until you’ve already seen the patient.
Hajde says that some practices list on their websites the most common CPT codes and what people are paying for those. But that is not always helpful.
“It’s hard when a patient comes in with what she thinks is a cold but finds out she has pneumonia,” Hajde says. Not only is she sicker than she realized, she’s just run up a bigger bill than she expected. Try explaining the difference between E/M codes 99212 and 99214, let alone what E/M codes are, to a patient who feels lousy and is newly worried about her health.
On top of that, explaining medical billing, despite your good intentions, could have the effect of making you look shifty. Patients might reasonably wonder why you can’t just give them a price and stick to it.
In addition, patients may change insurance policies when they change jobs or during open enrollment. This makes their out of pocket charges variable, too, adding to the general fogginess around pricing.
The solution, Good says, is patient education and clear communication. “Explain that your price is just an estimate and explain why you can’t be more precise.” Finding time for a conversation about billing is another challenge, but the advantages are definitely worth it, and it doesn't have to eat into your office visit.
Hajde suggests including explanations of medical billing in new patient packets. “You don’t want to overwhelm patients, but it is a good idea to explain how charges are figured.” This kind of communication is crucial not only to make CMS happy, but to improve your bottom line. “Practices that do well with collections have extremely good, (extremely) friendly communications with patients,” Hajde says.
“Patients trust their doctors enormously,” Hajde says, “but they are not happy about the billing process.” Taking steps to improve communication and build trust around pricing could benefit both your patients and your practice.