Patient as a payer: Practice solutions to deliver comfort, confidence, and convenience

As the prevalence of high deductible health plans has increased, patients are responsible for a greater portion of their medical bills.

Independent physician practices are experiencing the realities of a revenue cycle dependent on the “patient as a payer” paradigm. As the prevalence of high deductible health plans has increased, patients are responsible for a greater portion of their medical bills. The manner in which practices have approached their billing processes with insurance companies must evolve to include providing a payment picture to the patient, and much earlier. With a new “audience,” strategic objectives will change, and information-sharing must improve. Further, the consumer’s involvement in terms of financial responsibility alters the provider-patient dynamic, which cannot be ignored. Patients no longer enter a waiting room hoping to feel better, they arrive worrying how significantly the visit will impact their wallet.

Rightfully so. Patients owe an estimated $140 billion in medical debt in the U.S., and one in five of us has medical debt in collections. This is bad for both patient and provider. Research shows that only 6% of outstanding balances are collected when a patient’s debt is more than $200. One in three patients who have balances exceeding $200 fail to pay them in full.The No Surprises Act, enacted in January, hopes to address the problems stemming from surprise medical bills. Ready or not, transparency must be part of a practice’s plan.

With tighter reimbursements and the labor market challenges of the current healthcare environment, physician practices simply cannot afford collections failures with the fastest growing portion of their revenue base: patients. Traditional billing difficulties—typically through the involvement of payers—have generated distrust among even practices’ most loyal patients. Plus, the modern consumer deems antiquated collections processes after rendered services both confusing and inconvenient.

For physician practices to thrive, they must focus on increasing top line revenues, leveraging automation to reduce costs overall, and modernizing the patient experience to deliver both transparency and convenience. With well-conceived solutions as a framework, the patient payment process is straightforward and equitable, supporting a mutually beneficial relationship between provider and payer even amid the inevitability of rising medical costs.

A lack of trust and transparency

Healthcare costs are fraught with massive variances regarding who’s paying how much and for what services. Unfortunately, much of the billing and payer claims process remains a mystery to most patients. The very notion of healthcare bills is often clouded by doubt, misinformation, and incomprehensibility. As a practice, it’s important to question the degree of confidence and comfort a billing statement provides the patient. The problem actually originates much earlier: before services are rendered. Patients typically have little knowledge about what their procedure, visit, or treatment will cost them out of their pocket. Afterall, this isn’t usually a direct transaction between patient and clinician; the third-party involvement of a payer brings unique challenges.

Physician practices and their patients very much benefit from price transparency. Provision of medical services does not need to include a shock in the mail after each encounter. Leveraging modern technologies using artificial intelligence and machine learning, practices can provide visibility on the front end, a courtesy that empowers patients to understand and commit to treatment and its projected, associated costs. The alternative is a sea of disgruntled patients who may refuse pay altogether. Obviously, poorcollections experiences can lead to negative patient reviews, damaging an organization’s reputation, and their bottom line.

By eliminating surprise medical bills, physician practices are able to establish and maintain a more trustful relationship with their patients. For those who weren’t already moving in that direction, the federal No Surprises Act, which was enacted in December of 2020 and went into effect in January 2022, ensures that self-pay and uninsured patients receive key information including overviews of anticipated costs and that they do not receive surprise billing in private insurance for most emergency care instances and many non-emergency care episodes. These protections cover out-of-network and non-participating provider emergency services, and provide good-faith estimates in advance of scheduled services or upon request. Medicare provides similar shields under the Advance Beneficiary Notice (ABN), or waiver of liability. Various states are introducing similar changes to promote transparency. These are critical first steps toward driving full transparency in healthcare.

Streamlining the patient experience

One of the key benefits of improving patient visibility in healthcare costs is an improved patient experience. But better billing doesn’t hinge on transparency alone. Physician practices find it valuable to review the end-to-end cycle of acquiring the patient through engaging in treatment to achieving statement resolution. For example, when the patient makes an appointment, does he have to call an office during office hours to secure a time? When he arrives, is he welcomed with a clipboard and 15-30 minutes of paperwork? Do miscellaneous check-in tasks and clinical information-gathering take additional valued time? Technology solutions, particularly in the form of automation, have the ability to make resource-intensive functions much smoother for both the patient and provider.

As other industries such as banking, hospitality and travel have discovered, customers prefer self-service and time preservation whenever possible. By offering online scheduling, check-in, and bill pay—preferably through a direct text message or email link—providers demonstrate that they value their patients’ time. By making it as easy as possible to accomplish necessary tasks, they are more likely to be completed promptly, correctly, and with satisfaction by the patient, reducing administrative burdens on staff.

Providers can’t hope the patient has a stamp and a checkbook handy for prompt bill pay. Using a card on file expedites the paying process, improving top line revenue and reducing bad debt while streamlining payment for the patient. Our clients experience almost $.98 on the dollar when enrolling patients on their card-on-file program in contrast to about $.67 to the dollar on industry average. Over 30% of the patients pay their bill within 5 minutes of receiving their bill as a text message as opposed traditional paper-based bills. With this sustainable, secure infrastructure in place, practices are reaping many benefits of this functionality. As noted in the section above, transparency, which breeds trust, is critical to the relationship as well as to patient account management. Card-on-file transactions are a viable and productive option when the practice has established trust, consistency, and conciseness in its communications about costs of services.

When physician practices are struggling with revenue cycle success in this patient payment environment, it’s critical that decision-makers focus on transforming the entire experience at the point of service. As patients become more engaged in their care, outcomes improve. Practices reap the benefits of their improved participation, including increased profitability. Improving the patient experience with software solutions is a win-win.

Rajesh Voddiraju is president of Health iPASS, a Sphere Company.