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As the largest provider of primary and specialty care in central Oregon, the administrators and 85 healthcare providers of Bend Memorial Clinic are well aware that our patients' out-of-pocket healthcare spending is rising sharply. For some patients, this is a result of enrolling in consumer-directed health plans; for others, the deductibles and copayments in their traditional insurance coverage have increased substantially. With more of their own money on the line, it's more important than ever for patients to have a clear understanding of what medical procedures will cost prior to the time of service. Only then can patients make informed decisions about their healthcare and plan for their financial obligations.
Like most practices, however, we had no way of efficiently and accurately estimating patient financial responsibility prior to the time of service. Our major obstacle was the difficulty of determining what the health plan would allow for each procedure. Although we knew that the coinsurance rate for most patients was between 10% and 30% of the claim, we had no way of calculating the value of the claim on behalf of the appropriate health plan, which meant we could not determine the patient's share of the charges.
In the case of high-dollar procedures, we had little choice but to hold off on sending bills to patients until the insurance carrier paid the claim. Only then could we determine the patient's share of the charges. In addition to delaying cash receipts from patients, this approach sometimes led to an extended cycle of billing and collections, complicated by patient misunderstanding over exactly how much was owed and why. There were times when posttreatment bills confused and frustrated patients. Clearly, this was not serving our patients' best interests.
After examining this challenge from a business perspective, we identified several reasons for providing patients with accurate estimates prior to treatment. First and foremost, patient collections make up an increasing share of practice revenue. Actually bringing that money in, however, is time-consuming, expensive work that often leaves a lot of revenue on the table in the form of patient bad debt. By providing accurate estimates, we anticipated that we would improve the effectiveness of our patient financial counseling. Better financial counseling, we expected, would improve upfront collections and adherence to payment plans.
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