A new consumer guide on surprise billing assists in patient financial communications.

At OhioHealth, having candid up-front conversations about how patients plan to handle their medical bills is not something to be dreaded or regretted. It’s seen as an opportunity to help patients avoid surprise bills that might cause confusion and anxiety when they are recovering after a medical procedure.

“To me, it's not about point-of-service cash collections—it’s about educating the consumer about their benefits and what they are going to owe out-of-pocket,” says Margaret Schuler, OhioHealth’s system vice president of revenue cycle. “Organizations that still treat point-of- service like a negative are really missing a true patient experience opportunity.”

When the amount paid by a health plan to an out-of-network provider is less than the provider’s bill, the provider may bill the patient for the difference, creating a “balance bill.” Because patients are often unaware, they were treated by an out-of-network provider, balance bills are sometimes called “surprise bills.”

A new consumer guide—Avoiding Surprises in Your Medical Bills—is available to help educate patients and caregivers about why and when they might be treated by out-of-network providers and how that may impact their out-of-pocket responsibility. The guide was developed by HFMA, America’s Health Insurance Plans, and the American Hospital Association.

See related sidebar: 9 Tips from HFMA's Consumer Guide

By making sure patients understand their health insurance benefits before they receive services, health systems can help patients avoid surprise bills. Communication is key.

The Surprise Bill Landscape

More than half of Americans have received a medical bill that they expected would have been covered by insurance—and they hold healthcare providers and insurance companies nearly equally responsible, according to a survey conducted in August.

NORC, a non-partisan research institution at the University of Chicago, conducted 1,002 interviews with a nationally representative sample of Americans during the week of Aug. 16, 2018. The research team found:

  • 57 percent of American adults have been surprised by a medical bill.
  • 86 percent of respondents said insurance companies are very or somewhat responsible for their surprise bill, while 82 percent said hospitals are very or somewhat responsible.

What are the surprise charges? Among those survey respondents who have been surprised by bills, 53 percent said surprise charges were for physician services and 51 percent cited laboratory services. The research also cited surprise bills for the following services:

  • 43 percent said they were surprised by bills for hospitals or other healthcare facility charges.
  • 35 percent were surprised by bills for imaging services.
  • 29 percent were surprised by bills for prescription drugs.

Surprise bills have attracted the attention of state and federal legislators; several states have passed laws designed to limit surprise medical bills. More recently, two bills have been introduced in the U.S. Senate.

At the state and federal levels, the legislation—both enacted and proposed—targets medical bills that surprised recipients because they didn’t realize they were treated by out-of-network providers, such as emergency physicians, radiologists, or anesthesiologists who work in hospitals that are in-network for a patient’s insurance.

The No More Surprise Medical Bills Act would require binding arbitration to determine the appropriate payment for providers in surprise out-of-network situations. The Protecting Patients from Surprise Medical Bills Act would limit patient cost-sharing to the amount the patient would owe an in-network provider and prohibit providers from issuing balance bills.

Respondents to the NORC survey said that 20 percent of their surprise bills resulted from physicians not being part of networks. That means that balance bills are just one reason that patients can be surprised by medical bills. Other reasons include certain lab tests or drugs not being covered by patients’ health plans and big out-of-pocket responsibilities stemming from high-deductible health plans.

How to Use the Consumer Guide

HFMA’s “Avoiding Surprises” consumer guide focuses specifically on surprise bills from out-of-network services—and how to avoid them. Many patients do not understand the difference between in-network and out-of-network; even those who do know the difference do not realize that physicians who work at in-network hospitals might be out-of-network for their particular health plans, says revenue cycle expert Sandra Wolfskill.

The guide can be posted on health system websites—no permission required—and printed to help educate patients about how to reduce surprise bill risks from out-of-network providers. “This is a first step in putting information out there that is clearly written and is focused on the consumer's viewpoint and not the provider’s viewpoint,” Wolfskill says. “The value of this information is that a family member, a financial counselor in a facility, or a friend can sit down and help someone understand the steps they need to go through in order to avoid an unexpected balance bill.”

The guide explains the terminology—negotiated rate, out-of-pocket maximum, and so forth—that patients need to understand to reduce the risk of surprise bills. It offers tips for avoiding balance bills for scheduled care and for emergency care. In addition, it walks the reader through three scenarios—colonoscopy, hip or knee replacement, and pregnancy/childbirth—in which patients can proactively research whether balance bills are likely.

For example, the guide suggests that patients planning joint-replacement surgery can check the network status of the orthopedic specialist and the facility that will be used as well as the anesthesiologist, radiologist, inpatient physical therapy provider, rehabilitation center, home health provider, and outpatient physical therapy provider.

The guide coaches readers to check with their health plans and the individual providers and facilities that they plan to use. But most patients’ first questions will come to the hospital’s schedule/pre-registration staff.

“From the provider's perspective, the most important thing is to know the in- or out-of-network status of the physicians who are working in your facilities,” Wolfskill says. “That allows you to provide the education that the patient deserves to have in order to make an intelligent decision: ‘Do I come to your facility? Or do I need to look at a different facility where all of my work would be in-network, and therefore, less out-of-pocket cost to me?’”

Power of Being Proactive

OhioHealth uses up-front patient communications to educate patients about how their insurance works and what they are likely to owe before services are rendered. “We believe in the financial health of the patient as much as the clinical health of the patient,” Schuler says. “We see ourselves as patient advocates.”

For patients who are price-shopping, OhioHealth has a price hotline that allows patients to get out-of-pocket estimates before they schedule services. During those phone calls, patients are notified that anesthesiologists and radiologists are not employed by the health system and the out-of-pocket costs associated with their services are not included in the OhioHealth estimate. Thus, patients will need to research their prices—and their in-network or out-of-network status—separately.

For patients who have scheduled services at OhioHealth, a member of the pre-access team calls in advance to go over patients’ insurance coverage, report the estimated out-of-pocket responsibility, and discuss payment options, including payment plans and financial assistance. That is particularly important because of high-deductible health plans that can catch patients off-guard.

“No one wants to get stuck with a $5,000 deductible and not know how to pay it,” she says. “Having that dialogue up front again takes all the surprises away.”

Lola Butcher is a freelance writer and editor based in Missouri.

Interviewed for this article:

Margaret Schuler is system vice president of revenue cycle, OhioHealth, Columbus, Ohio, and is a member of HFMA’s Central Ohio Chapter.

Sandra Wolfskill, FHFMA, recently retired as director, healthcare finance policy, Revenue Cycle MAP, HFMA, Westchester, Ill.

Publication Date: Wednesday, January 09, 2019