What can a point-of-service pricing system do for you?

Because of rising copays and deductibles and underinsurance, patients are getting hit with bigger balances that they don't expect. More and more, patients want to know up front what they will owe.

Still, point-of-service pricing systems are not yet widely used by the patient access world. "Pricing software is fairly new to the West Coast and is often attached to the contract management system," says Kathryn Stevens, PhD, MBA, CHAM, northwest regional delegate for the National Association of Healthcare Access Management. "At my former employer, in 2007, we had several firms present their front-end tools, and pricing software was in early stages of development. From what I hear, many providers set up their own."

A point-of-service pricing system can accelerate calculating price estimates, reducing hours needed to process large amounts of data manually, either through the contract module or the payer files, to determine a provider-specific rate, says Stevens

"Some hospitals implement automated payment posting but choose to continue estimates using a manually developed, hard copy rate sheet based on CDM charges by procedure code," she notes. Stevens says that some information systems are able to calculate discounts as part of their billing system functionality.

At Shands at the University of Florida in Gainesville, a point-of-service pricing system hasn't yet been implemented, but the hospital's IS department is in the process of developing a home-grown product, says Tim Carney, manager of outpatient financial arrangements.

Not much additional training will be needed for patient access staff, who already know the CPT codes because they obtain pre-certification for the physicians. The CPT codes are tied to the charge master, and the price is then adjusted depending on the payer.

The system being built will need the CPT code, which gives you the charge master price, the plan code, and the patient's deductible or coinsurance. "Let's say the charge master price is $100, with a 40% discount per plan code - $60 is our new price to work with," says Carney. If the patient has a $400 deductible, and has met $380 of it, the patient still owes $20 from the deductible. If the plan is 90/10, the patient owes an additional $4 and the plan should pay $36, says Carney.

Carney says that it's hard to know whether a point-of-service pricing system will increase his department's up-front collections. "I 100% say if you ask for cash up-front, you will collect more," he says. "But it may also cause other issues, such as patients feeling if they don't have it you will not treat them, so your no-show rate will go up. That has a cost to it."

Real-time eligibility

The patient access department at Mary Rutan Hospital in Bellefontaine, OH, has just implemented something "better than a point-of-service pricing system," says John Kivimaki, director of patient accounts. "We have a patient dashboard in which insurance plans are accessed for real-time eligibility at the time the patient is registered," he says. "Patients are basically interested in what they owe, not the total of charges of their bill."

The response back from the insurance company verifies the coverage along with verifying the patient's policy number for billing purposes. The eligibility response also includes "financial opportunities" for the provider to collect co-pays, co-insurance, and deductibles that are due at the time of registration.

For self-pay patients, staff estimate the cost of services based on a price list for all regular services of all departments. "Our registrars are trained to make sure they say, 'This is an estimate of charges,'" says Kivimaki.

Kivimaki says that the department has had a few estimates that were incorrect, and that these are handled on an individual basis to resolve the account. "We always go back to the registrar when there is an estimate dispute, since they know the situation first hand," says Kivimaki. "I take the registrar's perspective and look at the balance, and make a decision that is always very fair and equitable to the patient and to the hospital."

In the emergency department, patient access has calculated the minimum charge to be $209. "We ask this of each patient," says Kivimaki. "We also ask for a portion of it if the patient cannot pay the total estimate."

Since the amount quoted is only an estimate, Kivimaki says that another approach is to have the patient sign a credit card consent stating that the patient's credit card will only be charged for the actual charges of the service. "After the bill is finalized, the credit card is charged and the receipt is sent to the patient with a copy of the bill," he says.

Only minimal training was needed for the new dashboard system, just to get the registrars to get used to the screen and what icons to click on to access the benefits and financial opportunities sections. By clicking on a magnifying glass icon, registrars access the benefits summary along with the financial data including co-pays, co-insurance, and deductibles. There is also a section that has patient demographics that shows patients' address and other patient data that the insurance plan has on file.

Although Kivimaki doesn't yet have any "before and after" metrics to show how upfront collections have increased, he says that the system gives new opportunities for collection.

"Since we have the patient liabilities at the time the person is being registered, we have the opportunity of asking for these before the patient leaves," adds Kivimaki.

[For more information, contact:

  • Tim Carney, manager, outpatient financial arrangements, Shands at the University of Florida, 1600 SW Archer Road, Gainesville FL 32610. Phone: (352) 265-3673. E-mail: carnete@shands.ufl.edu.
  • John Kivimaki, director of patient accounts, Mary Rutan Hospital, 205 Palmer Ave., Bellefontaine, OH 43311. Phone: (937) 592-4015. E-mail: mrhbojek@maryrutan.org.]