Improving patient communications and price transparency

For Henry County Health Center (HCHC), a 25-bed critical access hospital in Mount Pleasant, IA, elevating patient financial communications and transparency has become a mission. An early adopter of the Healthcare Financial Management Association’s (HFMA) Patient-Friendly Billing initiative, HCHC was one of 13 hospitals nationwide to receive the HFMA High Performance in Revenue Cycle Award in 2009. In 2013, it earned an HFMA MAP (Measure. Apply. Perform.) Award for excellence in revenue cycle performance and since that time has earned HFMA recognition as an Adopter of the Patient Financial Communications Best Practices.

Situation

With the evolving healthcare market driving higher out-of-pocket responsibilities for consumers and more consumers price shopping for nonemergency procedures, HCHC recognized the need to improve the billing process by focusing on patient financial communications and price transparency.

According to HCHC’s CFO David Muhs, requests for up-front estimates often were associated with nonemergency services, such as sleep lab, cataract surgery, and colonoscopies, for which patients would often comparison-shop to learn up front what they would owe. When requested, the billing team would reference past bills for similar services to provide estimates for these types of procedures—a practice that was both time-consuming and inaccurate and provided no visibility into a patient’s insurance coverage or deductible status.

“We didn’t have a good way to do a patient estimate—it was time consuming,” says Muhs. “So we needed to change our process and investigate how we could do that a bit better.”

Without the capability to provide accurate estimations of patient deductibles and out-of-pocket obligations, HCHC faced the too-familiar dilemma of patients not knowing what they would owe when they arrived and often being surprised by and unable to pay their portion upon discharge. This led to an increase in bad debt for HCHC.

Through the HFMA Financial Communications adopter program, HCHC learned that while it had already implemented many of the best practices governing financial interactions with patients, there were some gaps—including the lack of ability to provide those pre-service estimates. After investigating what other hospitals were doing to improve in patient access and conducting a number of user site visits, the HCHC team engaged Change Healthcare to provide a patient access solution that included point-of-service estimation.

Solution

Using HCHC financial data, Change Healthcare consultants prepared an in-depth ROI study, outlining the potential increased revenue and decreased operating expense to be realized by implementing RelayClearance Plus patient access suite and its modules for Estimation, Eligibility, Registration QA, and Address Validation.

“I’ve never seen an ROI program as robust as Change Healthcare’s—detailing various scenarios and the projected financial impact,” recalls Muhs. “That was really helpful in the selection process.”

The patient access suite includes RelayClearance Estimator, a SaaS-based solution that combines data from payer contracts and current patient benefits to calculate the patient’s out-of-pocket responsibility, helping providers to present a credible estimate at or before the point of service. Setting patient financial expectation up front, RelayClearance Estimator helps increase point-of-service collection, reducing bad debt associated with write-offs of patient balances since it enhances patient satisfaction with a smoother, easily understood financial experience.

RelayClearance Estimator generates estimates that include eligibility information (max out-of-pocket, out-of-pocket remaining, out-of-pocket remaining after service, deductible, deductible remaining, and deductible remaining after service) as well as payer responsibility, patient responsibility (co-pay, co-insurance, charges remaining), and estimated patient responsibility.

Benefits

Shortly after going live with RelayClearance Plus, HCHC patient access teams began fulfilling requests for pre-service estimates—96 estimates in the first quarter of 2016 and another 58 in the month of April alone, according to Muhs.

The added transparency and the capability to engage patients in the financial dialog earlier in the revenue cycle had a near-immediate impact on point-of-service collections. Hospital data shows that point-of-service collections doubled in the first six months, and HCHC’s percent of net revenue collected at the point of service tripled in eight months.

As an added benefit, the Eligibility core component of RelayClearance Plus further helped reduce denials and rework for HCHC’s business office. While the hospital always had a high clean claim rate, much of that was due to diligent work on the back end. Now, with improved patient financial visibility provided by RelayClearance Plus, all downstream revenue cycle processes benefit.

“We just moved the whole revenue cycle from the back end to the front end,” says Muhs. “Our registration personnel now act more as financial counselors, and our billers are focused on billing and not spending as much time cleaning up.”

Part of this transformation involved checking for Medicaid eligibility up front, instead of at the back-end of the revenue cycle. HCHC data shows that, in the first six months following implementation, the hospital averaged about 300 private pay accounts per month. With automated eligibility checking, they were able to convert 650 of those accounts to Medicaid and secure more than $763,000 in gross revenue. The hospital also implemented a loan program to help those patients who qualify for additional support.

“We’re helping people through their healthcare—and finances are part of healthcare, too. This helps them better navigate the system, get the best option for their needs, and relieve some of the stress,” notes Muhs.

As for HCHC’s initiative to achieve HFMA Patient Financial Communication Best Practices Adopter status, Muhs credits RelayClearance Plus for helping them bridge the communications and transparency gap and earn recognition.

“If it wasn’t for Change Healthcare, we would never achieve the Adopter certification from HFMA. We were able to do things that we just weren’t able to before, and that sealed it for us,” says Muhs.