Getting the Consumer Out of the Middle - health care and the billing process - Brief Article

Healthcare Financial Management, August, 2001 by Richard L. Clarke

Listen to almost any patient or family member discuss an episode of care, and invariably the conversation will include complaints about billing. At best, the process is confusing; at worst, it makes consumers suspect that they are being overcharged. Everyone agrees it is a mess.

To help untangle this mess, HFMA and the American Hospital Association have teamed up to form the Patient Friendly Billing Project. This project is designed to serve as a catalyst and a guide for improvements in the billing process. The project's goal is to help healthcare provider organizations convey bills (or more precisely, a series of financial and other communications) to patients and their families that are clear, correct, and concise.

As part of this initiative, HFMA and AHA have conducted numerous focus groups composed of patients and family members to gain the consumer's perspective on the billing process, create a framework for the project, and generate ideas for improvement. Many of the concerns expressed in these focus groups reflect a general sense that the "system" is fundamentally out of whack. Receiving multiple bills from multiple providers and interacting with one or more payers--all using different forms, terminology, and approaches--create a system that is almost impossible to track and understand. Focus group participants were clear that they felt "gaming" was going on between the provider and the payer, and they were caught in the middle.

While short-term fixes can be made to improve patient financial communications, the more important issue is how do we change the system so the consumer doesn't get caught in the middle?

There are no short-term fixes to this problem since it involves fundamental tenets of the American healthcare system--pluralism and choice. Health care in this country is pluralistic in that there are both public and private coverage and responsibility Additionally, employers and consumers want choice in their health plans, providers, and benefits. Changing the system will require the interaction, cooperation, and agreement of providers, payers, government, and employers--a daunting task. The Patient Friendly Billing Project recommends a multidisciplinary approach to seek a solution.

From the consumer's perspective, getting out of the middle involves a process that would capture and summarize bills from all providers, and automatically match the bills with all insurance payments. This process would result in a consolidated communication that clearly identifies all the healthcare services that were provided for each episode or episodes of care, the applicable coverage by one or more payers, expected insurance payments, and copayments the consumer owes. The consumer would have a single point of contact (phone or Web site) to obtain answers to inquiries, lodge complaints, or raise issues about benefits, coverage, payments, and so on.

In addition, an appeals process would be established to handle disputes consumers may have about eligibility, coverage, charges, and payments. Eligibility, coverage, and payment issues between providers and payers also would be resolved through this system in a way that is transparent to the consumer.

Copayments by consumers would be made to a single source and would be automatically distributed to those providers and suppliers involved in the episode of care. Of course, all of these transactions would be handled in a way that ensures the appropriate privacy and confidentiality of individually identifiable health information.

A pipe dream? Perhaps. But, given the administrative simplification provisions of HIPAA, the explosive growth in the effective use of the Internet, actions by various health plans and "dotcom" companies to automate and Web-enable certain critical eligibility and benefits information, the solution may not be that far-fetched. And the savings that would accrue to all trading partners by simplifying the process would more than pay for the development of this centralized approach.

Getting the consumer out of the middle of the billing and payment process is a key, long-term goal of the Patient Friendly Billing Project. If that goal is achieved, we can gain from both improved consumer relations and cost-efficiency--outcomes that benefit all parties involved.