Patients are price shopping: They'll want more than just `guesstimates'

Expect more calls from 'bargain hunters'

A patient wasn't happy with the answer she received after asking registrars at Botsford Hospital in Farmington Hills, MI, the cost of a high-dollar procedure, and she insisted that she could get it performed for half of the price quoted.

"One of the hospital social workers contacted the other facility, with the patient present. They discovered the other facility had misquoted their pricing," says Paula Andres, CHAA, manager of patient services in the pre-arrival department. "A little research went a long way."

If a patient isn't satisfied with your response on what a procedure will cost, the hospital potentially could lose tens of thousands of dollars in revenue, adds Andres. "The main problem for patient access stems from those who call around and won't give a name," she says. "It is a growing problem, but also an opportunity."

To encourage patients to choose Botsford Hospital when they call for a price quote, Andres does the following:

• She asks for the patient's name and the physician's name, and she engages them in conversation.

"This gives them more of a feeling of commitment and possibly wins them over," Andres says.

• She tells the patient what discounts are available if the amount is paid prior to service, and she explains available payment plans.

"Asking additional questions and developing appropriate scripting helps," says Andres.

• She performs research by being a "secret shopper" to determine what charges are being given out by competitors.

"This can give you a better of idea of how to deal with the callers, or to approach hospital executives as to where you stand in comparison to competitors," says Andres.

Many more calls

Previously, registrars at Marlton, NJ-based Virtua received about one phone call a month from a patient asking how much a service would cost, but they now field five or 10 such calls each day, reports Thomas P. Buckley, assistant vice president of patient business services.

"Prospective patients usually call for the purpose of price shopping," he says. "Similar to receiving estimates from a contractor or any service provider, patients are looking for the best price."'

Patients at Mercy Medical Center in Baltimore, MD, are much more cost-conscious when selecting medical services, according to Sheila Holzman, RN, CHAM, manager of the scheduling office. This change is due, in part, to employers switching to health reimbursement arrangements and health savings accounts with high deductibles. Andres says today's patients are "avid shoppers and bargain hunters. They are looking for the most reasonable provider for their needs."

Give accurate quotes

Members of Andres' staff rely on CPT codes obtained from the provider's office to give estimated prices for surgeries.

"Our finance department uses a tool based on historical data," she says. "Ideally, it would pool data using the specific provider information."

Botsford Hospital's registrars offer discounts for patients who pay over the telephone with a credit card or echeck prior to the date of service. "This gives the patient ease of mind that it's pretty much a done deal financially, and they have met their obligation," says Andres. She says to take these steps to give accurate estimates:

• Ensure the estimate is based on accurate coding from the physician's office.

"This is crucial," says Andres. "These codes can be used in conjunction with past billing history to calculate the average cost of a procedure or exam, if technology is not available."

• Don't omit multiple codes that should be included with tests and procedures.

"There is nothing worse than giving a price quote of a couple of hundred dollars for one code and having the patient receive a bill for over $1,000 because not all the codes included were calculated for the estimate," says Andres.

• Be certain you understand the rules of each clinical area.

If the radiology department typically includes additional views for certain findings beyond the original exam, for example, Andres includes this extra charge in estimates.

• Don't use "cheat sheets" for price quotations.

If you are calculating a price quote manually to obtain an average cost based on historical costs, remember that costs might rise over time. "Prices may change without all hospital departments being made aware," says Andres.

Monies collected upfront result in fewer dollars being spent at the back end due to multiple statements going out, bad debt collection, and labor costs, says Andres, adding that point-of-service collections increased from $275,000 in 2010 to $500,500 in 2011 due in part to more accurate estimates.

"Industry statistics have proven that the sooner the money comes in, the more ensured you are of collecting it," she says. (See related stories on information needed to give accurate estimates, , how to direct questions about prices to a single area, and steps to take if an inaccurate estimate is given, below.)

Sources

For more information on giving patients price quotes for procedures, contact:

  • Paula Andres, CHAA, Manager, Patient Services, Pre-Arrival Department, Botsford Hospital, Farmington Hills, MI. Phone: (248) 615-6701. Email: pandres@botsford.org.
  • Thomas P. Buckley, Assistant Vice President, Patient Business Services, Virtua, Marlton, NJ. Phone: (856) 355-2020. Fax: (856) 355-2171. Email: tbuckley@virtua.org.
  • Sheila Holzman, RN, CHAM, Manager, Scheduling Office, Mercy Medical Center, Baltimore, MD. Phone: (410) 783-5810. Email: sholzman@mdmercy.com.
  • Vidette W. Owens, MHA, Manager, Financial Counseling, University of Mississippi Medical Center, Clinton. Phone: (601) 926-3876. Fax: (601) 926-3533. Email: vwowens@umc.edu.
  • Patrick Stone, Patient Access Services Applications Administrator, Texas Health Resources, Arlington. Phone: (817) 404-1735. Email: PatrickStone@TexasHealth.org.

Stop sticker shock: Get info in advance

Give patients fewer financial surprises

Patients who ask about the price of a surgery or diagnostic test probably won't realize that you need many more pieces of information to give them a correct answer.

"Most organizations experience a higher level of patient satisfaction when patients are informed of their obligations prior to receiving service," says Patrick Stone, patient access services applications administrator at Texas Health Resources in Arlington. "This avoids 'sticker shock' 30, 60, or 90 days after treatment, when the insurance company finally processes the claim."

To provide an accurate estimate, however, Stone says you must know this information:

• The specific procedure(s) that the patient is scheduled to receive.

• The allowable insurance for the service(s) the patient is requesting a price quote on.

"Most healthcare providers contract with insurance companies, and therefore charges are typically irrelevant," says Stone. "Services may be paid on a fee schedule, DRG, per diem, or some other reimbursement methodology."

• The patient's specific benefits.

Many employers are shifting costs to the patient with larger deductibles, co-insurance, and co-pays, says Stone, and benefits change throughout the year as the patient incurs services.

"Getting accurate benefits can be a challenge, due to the timing of claims processing," he adds.

Technology is key

To give more accurate estimates to patients, technology is key, says Paula Andres, CHAA, manager of patient services in the pre-arrival department at Botsford Hospital in Farmington Hills, MI.

Registrars use price estimation software that combines and processes payer plan codes, billing history, procedure codes, and the physician performing a procedure to calculate a patient's out-of-pocket expense.

"This estimate not only addresses copays, but unmet deductibles and coinsurance as well," says Andres. "Our patients seem to appreciate the fact that there are no surprises when their bill comes."

Registrars enter demographic information, procedure and diagnosis codes, the patient's payer, plan and group numbers, and the physician performing the procedure. The system calculates out-of-pocket expenses based on the plan code, historical charges, and the payer contract. "It then gives us a readout of what has already been met by the patient, and what the patient will owe for this particular visit," Andres says.

Because scheduled patients are registered three weeks in advance, adds Andres, it gives them time to pool their resources if monies are due in order to take advantage of the prompt-pay discount option.

"Staff like it, since it can lead to incentives for them when pre-set goals are met," says Andres. "It becomes a bit of a friendly competition, which motivates them in their work."


Send price quote calls to a single place

Registrars in multiple areas of Botsford Hospital in Farmington Hills, MI, were fielding increasing numbers of calls from patients asking for information on the cost of various services.

"This led us to assign one area for all inquiries, to ensure consistency," says Paula Andres, CHAA, manager of patient services in the pre-arrival department, which was chosen as the hospital's "price estimation center."

Vidette W. Owens, MHA, manager of financial counseling at the University of Mississippi Medical Center in Clinton, says, "Providing price estimations should be limited to an individual, or a team of individuals, whose primary responsibility is patient financial assistance."

The price estimation process is assigned to the hospital's financial counseling unit, and the reimbursement analyst team assists with contractual agreements and historical claim data, says Owens.

Marlton, NJ-based Virtua recently centralized the process for price estimates at its four hospitals, by directing all phone calls to the patient accounting department, reports Thomas P. Buckley, assistant vice president of patient business services. Staff members in all areas with patient contact are instructed to refer patients to this number.

"The goal is to funnel the questions to where they can best be answered," says Buckley. Patient business staff members are trained to obtain as much information as possible to answer the question, "What will this procedure cost?"

"Most patients don't know what a CPT-4 code is or an ICD-9 diagnosis," says Buckley. However, if the patient describes why they are coming to the hospital, such as for a hernia procedure, staff can then use data from the hospital's health information management coding system to calculate the cost.

Next, staff members obtain the patient's insurance coverage details and the deductible, coinsurance, or copay. "If the patient is self-pay, we identify the average charges for the visit, and the discount off of charges that the organization can offer," says Buckley. "If the patient has insurance, we identify how the insurance company will pay this claim."

Staff members use payer websites and insurance company contract information to answer these questions, he adds.

"Using all available information will provide an accurate dollar figure for the patient responsibility," says Buckley. "This helps to keep the patient informed and satisfied going forward."


What if estimate is wrong? Say this

Any patient who ends up owing $1,200 for a procedure after being given an estimate of $300 is likely to be very unhappy, even if the registrar carefully explained the original quote was just an estimate.

Estimates will be incorrect if additional or different procedures are done that weren't included in the original estimate, says Paula Andres, CHAA, manager of patient services in the pre-arrival department at Botsford Hospital in Farmington Hills, MI.

Once a quote is given, some patients believe that no matter what else happens in the course of treatment, they should only have to pay the amount that originally was quoted, she adds.

"Occasional errors in estimates do occur," says Andres. "Patients may understand it was an error. But like shopping in a store, some feel that the advertised price should be honored."

Emphasize the word "estimate"

If staff use appropriate scripting up front, you can fall back on this when the patient calls to complain, says Andres.

"The emphasis is on the word estimate," she says. "Walk through the charges with the patient, to see why the estimate was higher."

Because the physician, radiologist, or surgeon might perform additional procedures or tests, registrars need to emphasize that the estimate is based strictly on the information given by the physician at the time of the order, she says.

If a patient is upset because an estimate was lower than the actual cost of a surgery or procedure, staff could explain this by saying, "The surgery became more involved and took longer," or, "Instead of a CT without contrast, there was a decision to add CT with contrast," says Sheila Holzman, RN, CHAM, manager of the scheduling office at Mercy Medical Center in Baltimore. Although registrars don't always use these exact words, says Holzman, they convey this information to patients: "Final charges for one's planned procedure may vary, because your final charges are determined by the personalized medical care that you receive. Many times your doctor will make decisions to modify they type of services, procedures, and/or medical supplies you receive based on what your doctor determines is medically necessary for your health and well-being. Even seemingly minor changes in the procedure can cause charges to vary substantially from the estimate. Often, there is no way to predict these changes until your treatment is underway."

"One can't always predict the exact surgery or procedure," says Holzman. "Healthcare doesn't work that way."

To avoid misunderstandings involving incorrect estimates, take these steps:

1. Take extra time to inform patients about other bills they might receive from the anesthesiologist, radiologist, pathologist, or surgeon.

"Patients may assume quoted charges are the only charges they will owe," says Andres. "They aren't aware of the difference between facility and professional charges, and how many of those can be included in just one procedure."

2. Ensure that staff members use appropriate scripting at the time the estimate is given.

Otherwise, patients might not understand that there could be a difference from the original quote. "If there are additional monies due, the patient will accept and understand the new numbers," says Andres.

3. Honor original estimates if an error was made.

"Unless there is a major discrepancy in the estimation and what the actual charges turn out to be, we honor the original estimate if the patient is insistent," says Andres. "If it is a large sum, we offer a discounted rate on the difference."