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When clinical diagnoses and procedures are detailed more completely and presented in consumer-friendly fashion, resulting patient statements will become far more understandable and useful than they often are today.

ICD-10 coding practices are paving the way for a new era of patient-friendly billing, and they have the potential to positively impact provider revenue cycles through improved patient insights. As patients assume greater responsibility for the cost of their own care, they are becoming payers in a very real sense and are increasingly seeking specifics for their procedure or visit, asking to understand what exactly they’re paying for.

While ICD-10 codes can’t directly answer all of patients’ financial questions, they offer greater specificity, accuracy, and intelligence needed for patient-friendly billing practices. When combined with electronic health record (EHR) information in a consumable format, patient estimates, post-care patient billing, and ICD-10 coding deliver the full clinical and financial picture to patients.

More Accurate Patient Estimates

Specificity in the ICD-10 code set allows for far more precise pricing estimations, enabling providers to more accurately predict patient pre-visit cost estimates and, ultimately, reducing the financial stress of the unknown for the patient and the provider. The 2014 Connance Consumer Impact Study found that patients were more than twice as likely to pay their bills in full if they had a fully satisfactory experience with hospital billing. This year, a PNC Healthcare  survey found that one out of five people rate unexpected/surprise bills as their top billing-related issue—and 34 percent of those who requested or received cost information up front noted their final bills were higher than the estimates.

For most simple procedures, estimation is a straightforward task, but for inpatient and more complex outpatient care, a reliable estimate requires knowing in detail which procedures will be involved and what is contractually reimbursable. The primary reason for ICD-10 PCS (procedure coding system) is that it provides better clarity about hospital inpatient procedures than ICD-9 did. For example, code assignments are much more granular regarding all aspects of cardiovascular procedures in ICD-10, and that detail will drive payer payment. That same level of detail can also be used to calculate anticipated billing for variable procedures to accurately determine and communicate patient responsibility.

With innovative providers establishing standard sets of procedures for common care pathways, estimation tools will more accurately predict final patient bills. Drilling into specific codes for the necessary level of accuracy enables up-front estimates that improve prepayment or payment at the point of service—and will also match up more directly with post-care patient bills. The resulting clarity can substantially improve patient satisfaction and boost Centers for Medicare and Medicaid Services star ratings.

Clearer Post-Visit Patient Communications

ICD-10 will ultimately lead to a transformation in the way healthcare costs are communicated to consumers. The code’s specificity elevates the transparency in patient statements, which will positively impact understanding of medical costs. When clinical diagnoses and procedures are detailed more completely and presented in consumer-friendly fashion, resulting patient statements will become far more understandable and useful than they often are today. This in turn may decrease billing inquiries and increase the likelihood of faster and more complete payments, as patients gain a greater, more immediate understanding of exactly what is included in their bill.

ICD-10’s robust level of information on various procedures will require a greater level of translation into terminology that is patient friendly than is currently required. And, billing statements—the point at which the patient must take action to pay the bill—will likely receive more line-item scrutiny. Greater detail shown in patients’ bills will only be helpful to the extent that it is understood.

As providers become accustomed to using the ICD-10 code set to build greater detail into patient statements and translating that detail into patient-friendly terminology, they will make it easier for patients to understand the bills they receive and will enable more specific discussions when statements still aren’t entirely clear. This continuing clarity can further streamline patient payments while reinforcing the patient satisfaction set in motion with clearer estimates.

Reduced Need for Medical Bill Review

The fact that patient billing has been confusing to consumers who scrutinize what they’re being asked to pay has given rise to a new set of patient-advocate services. These services typically involve having experts review medical bills for potential errors and overcharges. They can verify that bills are accurate and should be paid, or negotiate adjustments on patients’ behalf.

The need for these services may diminish as providers move to make patient estimates more complete and accurate pre-visit and to make patient statements more detailed and patient-friendly post-visit. Moreover, making financial communication with patients easier will allow more opportunities to collect up-front payment and discuss options for payment plans that better suit patients’ financial needs. When engaged to review bills with greater detail than in the past, these services should be able to more easily verify billing accuracy as well as increase the likelihood that a patient will pay their bill.

Information is Essential in Patient-Friendly Billing

As the industry settles into using the new code set, conversations around employing the insights gained from ICD-10 to improve price transparency for patients should be the next natural step. While patients continue to assume a greater role in paying for the cost of their own care, the need for understandable and fair financial communications is preeminent. For providers, the benefits of ICD-10 exceed what is currently expected from the transition. Using the code set for patient billing will help create an electronic trail of evidence to receive proper payments, not only the usual suspects—commercial and government payers— but directly from the patient.

The layers of details and opportunities to engage patients on their financial responsibilities will ultimately lead to a healthier revenue cycle. Reducing bad debt, days in accounts receivable, and insubordinate payments, patient friendly billing is only just starting. The more providers leverage the greater level of information in ICD-10 to enhance patient billing, the more ICD-10 will have a profound effect on the patient portion of the revenue cycle, well beyond anything originally envisioned.

Shreyas Shah is senior VP, strategic marketing, Change Healthcare, Nashville.

Publication Date: Wednesday, November 04, 2015