Root causes of billing complaints
Healthcare reform has transformed how hospitals conduct business. Due to shifts in cost sharing, a larger portion of many hospitals’ reimbursement now comes from patients rather than commercial payers. This means hospitals are interfacing more than ever with consumers to collect. Many hospitals’ revenue cycles are struggling to meet today’s financial demands and consumer expectations due to a confluence of factors, from historic underinvestment to administrative burden.
Many Americans who gained healthcare coverage under the Affordable Care Act are unfamiliar with what their health insurance entails. The first time some policyholders hear about deductibles, co-pays, co-insurance or benefits is when an unanticipated hospital bill shows up in their mail. In fact, consumers’ No. 1 billing complaint is that hospital employees did not explain how much their medical care would cost, says Ms. Prince.
The shock of an unexpected expense can destabilize the patient-hospital relationship and reduce satisfaction rates. A 2013 survey by TransUnion found nearly 70 percent of patient respondents who gave the highest ratings to their quality of care during the past two years also gave high ratings to their billing and payment experiences, compared to only 24 percent of those who gave low ratings to their quality of care. This has made customer satisfaction a strategic priority for hospitals as clinical outcomes and HCAHPS scores are increasingly linked to reimbursement rates.
Negative financial interactions also have a direct effect on hospitals’ cash flow. A 2016 study by Connance found 74 percent of satisfied patients paid their medical bills in full, compared to 33 percent of their lesser satisfied counterparts. Intermittent or unreliable cash flow can harm a hospital’s ability to respond to changing market conditions, putting an organization at a disadvantage in the transition to value-based care.
Many patients lodge complaints about the length of time between services rendered and when they get a bill in the mail, says Ms. Prince. The number of days an account is in days not final billed is a great indicator of revenue cycle efficiency. High claims denial rates and slow adjudication processes can delay patient billing for up to four months or longer. “Hospitals forecast receiving patient payments within a certain timeframe,” says Ms. Prince. When patients don’t get bills on time, hospitals likely won’t get paid on time, she says.
In recent years, hospital revenue cycles have struggled to remain efficient under a mountain of new regulations and reporting measures implemented by the ACA. Because of the increased demand for documentation under ICD-10, physicians are required to perform clinical and time-intensive administrative duties with no increase in compensation, says Ms. Prince. Tedious, administrative tasks can slow down the claims submission and billing process, causing patients to receive bills later than anticipated.
HENRY KOTULA 