At Indiana University Health in Indianapolis, a cost estimator team works tirelessly to give patients good information on what their care will cost. “The estimate is tailored to a patient’s care plan,” says David Burton, vice president of revenue management.

The team of nurses and experienced billing and collections staff sort through all the facts that are known at the time. Despite their best efforts, the patient sometimes owes more than anyone anticipated. The devil is in the details.

“Changes in the details can impact the cost to a patient,” Burton explains. Certain issues affect what is billed:

  • The location where services will be rendered;
  • The physician who will provide the services;
  • The billing methodology for that location and physician.

A dermatologist might be able to perform minor surgical procedures in his office, but more complex services are performed in the hospital’s OR. “Insurance companies may pay both the hospital and the provider differently based on the location,” Burton notes.

To avoid pitfalls, staff must be familiar with the patient’s insurance coverage and benefits. Understanding benefit accruals also is important since some patients pay a deductible in addition to co-insurance. Correct estimates are only possible if one knows how much of the deductible has been met already.

Some people have met their out-of-pocket maximums already. In that case, there are no co-insurance or other out-of-pocket costs to pay. “Each patient’s circumstances are unique. It’s based on specifics of their benefit plan and how much care they have received to date,” Burton explains.

The team accurately translates the planned services into billing codes. Lastly, they need to accurately apply a patient’s health insurance plan to all of the above. “A change to any of these factors can result in a different estimate amount,” Burton says.

The team retrieves its information from multiple sources. “We often talk to the patient and their provider, or the provider’s team,” Burton says.

Even if someone receives the same service as another patient, both with the exact same insurance, they can end up owing different amounts. “Each patient’s needs are unique. Their estimate must be customized to meet those needs,” Burton explains.

One patient might need a longer hospital stay than the average person. Other times, patients end up consuming different or additional services. Things do not always go as planned. For example, a patient with COPD who is undergoing a routine hip replacement might need extensive postoperative respiratory therapy. That patient is going to stay in the hospital later. “These nuances can lead to varying out-of-pocket responsibilities,” Burton observes.

Even with meticulous planning, estimates are off sometimes because something changes along the way. Other times, the patient buys a new insurance plan with completely different coverage.

To add to the complexity, payers might provide their own estimates to patients, which can be faulty. One reason is that the payer estimates do not factor in all the relevant information. The estimates usually are based on average costs rather than specific details of a patient’s care.

“These may be incomplete or inaccurate. It causes confusion,” Burton says. Staff make it clear to patients that the hospital’s estimates can be trusted because they factor in all the available information. In contrast, says Burton, “payer estimates are often based on claim history. That can be very different from a patient’s exact circumstances.”

The department’s price estimate process has expanded greatly in recent years. “We started small in 2015,” Burton notes. At that time, staff prepared price estimates only for outpatient radiology services, and at just one location. The department now performs estimates for all locations as well as inpatient and outpatient areas (which includes laboratory services).

“Additionally, we have implemented a formal quality assurance program and retroactive audits,” Burton reports. These show that 90% of estimates are accurate within 5% of the patient’s actual billed.

Another recent change: Patients can request estimates online anytime. About 8% do so currently. “These are processed like any other request, though they tend to require a bit more research,” Burton says.

Ninety-five percent of estimates are completed within 24 hours; 85% are handled the same day. If the process takes a little longer, it is usually because staff need to follow up with physicians to confirm the details. Complex cases also take more time.

At Albany (NY) Medical Center, enrollment specialists are the ones who provide price estimates to patients. They are clear that actual charges may differ from what is quoted. “One issue we can face sometimes is the physician office not respecting the process,” says Brenda Pascarella, CHAM, associate director of patient access.

There are times when offices schedule elective services before staff can give a price estimate to the patient. “Patients need to be made aware of the potential out-of-pocket costs,” Pascarella says.