How hospitals, ambulatory clinics, and providers manage billing and claims have a direct impact on their healthcare organization’s bottom line. These hospital billing processes are often overlooked by executives facing revenue leakage.
We take a deeper dive into the relationship between hospital billing and claims management processes. We will explore how your organization’s financial health could be affected by poor internal practices and other relevant news about hospital billing.
States Introduce Legislation Around Balance Billing
Due to the ever-increasing costs of healthcare and the fact that the amount of coverage provided by insurance companies is diminishing, legislators are forced to introduce more regulations around balance billing. According to a recent article published by Inside Arm, balance billing is “the process by which patients receive higher-than-expected bills from healthcare providers, often due to having unknowingly received out-of-network care—has become a bellwether in state capitols across the U.S.”
Some states have enacted laws on core principles of balance billing practices, including Illinois, Connecticut, New York, Florida, and California. Recent legislation has successfully addressed a combination of some of the following issues as reported by Inside Arm:
- Limits on out-of-network care charges (CA AB1305, CT SB433, FL HB221, UT SB216)
- Increase disclosure of healthcare costs and improve network transparency (CT SB433, FL HB221, FL HB1175, GA SB302, MN HF3142, TXSB425)
- Analysis of possible balance billing parameters (GA SR974)
- Creation of processes used to resolve potential billing disputes among doctors, patients, and hospitals (FL HB221, TX SB481)
How Hospitals Can Improve the Billing Process
Oftentimes healthcare executives will blame external factors, such as market conditions, for poor hospital revenue cycle performance. However, when a hospital has lagging accounts receivable days and diminished profit margins, this is a sign that the hospital may need an internal hospital revenue cycle turnaround project, according to Derek Pierce of the consulting firm Healthcare Management Partners (HMP) in a recent interview article in RevCycle Intelligence. Pierce explains that. “If you’re unable to collect the cash quick enough, that could indicate that management isn’t focused on what’s important.”
He advises hospitals to analyze internal revenue cycle management processes. The first step he recommends is to focus on lowering accounts receivable days, which should be about 30 on average. The implementation of point-of-service patient collections strategies and improvement of registration process can increase accounts receivable. Once this financial element has been addressed, Pierce suggests the next step is to ensure that all departments in the hospital are maximizing spending budgets and leveraging available resources.
Pricing Transparency Improves Hospital Financial Health
As we have reported on in the past, providing more clarity with hospital pricing so that patients have a better understanding of what they actually will be responsible to pay, otherwise known as pricing transparency, is a critical component to improving hospital revenue. Michael Rawdan, a director in the revenue cycle department at St. Luke’s Health System in Boise, Idaho concurs with this need in a recent article in Modern Healthcare. According to the article:
“The antiquated paper system many hospitals have used for decades was inefficient. It confused patients, who had a hard time knowing what they owed, what they’d paid and what they were being billed for. As a result, patients could be mired in confusion over billing codes and crisscrossing information from insurers and a multitude of providers…”
Improving the Patient Financial Experience
In the new world of value-based healthcare, proving the optimal patient experience is a key factor that influences whether a healthcare provider collects patient payments. However, oftentimes, the financial side of this experience can be overlooked.
James Green, a national partner with Advisory Board’s revenue cycle management division was recently interviewed by Becker’s Hospital Review. We will close this article with the following three thoughts on how to improve the financial experience for patients from Green.
- Know who your patients are and what they want.
- Be adaptable to creating a workflow that works for your patient, and not just for you.
- Implement an effective communication plan with patients that is comprehensive and informative.