The Price Transparency rule is intended to help consumers know the costs of hospital healthcare services before receiving them. While providing a list of services and prices is useful, it’s only part of the solution to help patients understand what they owe.
What is the Price Transparency Rule?
In January 2021, the Centers for Medicare and Medicaid Service’s price transparency rule began requiring hospitals operating in the United States to maintain pricing information about their services two ways: a complete list of all items and services offered in a machine-readable file and a consumer-friendly list of shoppable services.
The goal of the new rule is to make it easier for consumers to shop for and compare costs for healthcare across hospitals to enable them to make value-conscious decisions.
Patient Payment Responsiblity (and Stress) Grows
The price transparency rule is one of many changes aimed at making the healthcare payments experience more consumer-friendly. A more consumer-centric model places patients in the driver’s seat and gives them more options than ever. This shift aligns with data that shows consumers would like to be able to choose healthcare experiences in much the same way they do other services, which means having simple access to online reviews and pricing information.
Along with this shift, patient payment responsibility continues to rise. In 2020, average healthcare costs were $28,653 for a family of four and $6,553 for an individual, up more than four percent from 2019. Affordability remains a major concern for many when considering a healthcare payments experience.
In addition to the burden of large balances, many consumers are frustrated by not knowing what services are covered, because they don’t understand their health plan’s benefits. Nearly seventy percent also report confusion regarding the explanations of benefits (EOBs) that are sent after a service is provided. These multiple points of potential misunderstanding can be stressful to patients who wind up needing to have back-and-forth communication with their providers for billing clarity.
Moreover, between bill and benefits confusion, affordability concerns and the ongoing COVID-19 pandemic, some potential patients opted to forgo treatment altogether. Despite some patients returning to in-person medical experiences, these delays in treatment may lead to more serious problems with untreated medical conditions worsening over time.
Moving Beyond Transparency to Assess Responsibility
Showing how much services cost is a step toward true transparency but is only part of the solution to help patients understand what they owe. Variables like agreed-upon discounts, specialty medical costs and health plan coverage can impact how much someone pays out of pocket for treatment.
Providers can ease the burden of collection on their teams and ultimately create a more favorable consumer experience by effectively managing patient financial expectations. Providers must become better at estimating patient payment responsibility and clearly communicating that information.
Here are steps you can take to move beyond price transparency to improve the patient financial experience:
Examine the Data
Get to know your patients’ payment behavior and needs. Review data like the health plans your patients have, patient payment preferences and your commonly performed services to learn about your patients’ habits. This will help better identify how much your organization’s frequently performed services cost your patients based on patterns presented in your findings. Use that information to determine the most accurate estimates of how much those frequently performed services are costing patients, comparing their health plan benefits and their out-of-pocket costs. Consider using that data to create eligibility requirements for your patients to offer them payment options to fit their financial needs.
Improve How Your Staff Communicates With Patients
Train your staff to set expectations with patients about their financial responsibility and payment options. Prepare your team with scripts and answers to frequently asked questions to build a consistent and positive experience for every patient. Take opportunities throughout the patient journey to let your patients know what payment channels are available to them. Communicate this information at every touchpoint along the way; pre-service, during the patient visit, and once the bill is sent after a service is provided.
Use the Communication and Payment Channels Your Patients Prefer
Engage with patients based on their individual preferences after setting payment responsibility expectations. Implement a robust communications plan that includes notifications via email, text or phone, using whichever methods each patient prefers. Us in-office signage and your organization’s website to reinforce payment expectations.
Further, build trust with patients by making payments easy. Because patients want to make healthcare payments the same way they pay their other bills, you’ll want to offer digital options like payment plans, payments through online portals and automated payments that are convenient and secure.
Previously, patients reported the inability to pay medical balances of $1,000. Recently, that balance was lowered to $400 with about half of consumers saying they would need help paying down medical balances of that size. Payment plans can help your patients better manage large bills, by enabling them to pay over time, rather than as a lump sum, using an agreed-upon schedule. Automated payments allow patients to pay future medical bills, including those in a payment plan, using a payment method saved on file. Whether offering payment plans or automated payments, ensure that your patients are never charged more than they expect by setting a maximum payment amount.
Creating Positive Payment Experiences for Patients and Staff
Price transparency involves more than a list of services for patients. When you can better anticipate and communicate to patients about what they owe, you can better adopt payment channels that are more consumer-focused for favorable and personalized patient payment experiences. When patients are able to more easily pay, your team can spend less time and money on collection activities, simplifying billing and collection processes and improving your bottom line.