The claims and billing process' impact on patients

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Many providers think of the patients as just that — patients. They have symptoms that need diagnosis; diagnoses that need treatment plans and/or management; and conditions that may require more tests, surgery, and follow-on care. However, patients first and foremost are consumers, and their voices are growing ever louder.

The pandemic years brought fundamental changes to medical practices, with telehealth visits and touchless options such as advanced registration, online scheduling, and online billing and payments. With the announcement that the COVID-19 national emergency and the public health emergency will end on May 11, providers and practice leaders may believe that things will return to normal, failing to recognize that consumer expectations have forever changed.

Providers already face a number of operational challenges, including rising costs, labor shortages, and increasing days in accounts receivable (A/R days) as payers take longer to adjudicate claims. Providers need to adopt practices that improve claims processes and reduce the time between claim submittal and adjudication, speeding billing and consumer payments.

Consumers are ready for a change in claims and billing processes. The question is whether or not providers are up to the challenge.

Consumer expectations differ from providers

A recent healthcare payments survey shows the disparity between provider claims and billing practices and consumer expectations. Nearly four in 10 providers say their billing and collection practices don’t impact the patient experience. However, nearly half of consumers say they would change providers for a better payment experience. Those attitudes are generational, with just 27% of Baby Boomers willing to change practices. In contrast, 74% of Millennials say they would consider such a move. Nearly 90% of consumers expressed a preference for a single location for healthcare payments.

When practice leaders were asked about their top challenges, they named staffing first, but they also mentioned expenses (20%) and revenue (17%), according to a poll by the Medical Group Management Association (MGMA). Respondents also said claim denials, adapting to changes in evaluation and management (E/M) coding, and long appeal processes were negatively impacting revenue and preventing timely care delivery.

There’s no question that payer response times have increased and the dollar amount for denials has risen.For 2021, 12% of professional claims were initially rejected at an average amount of $288, research shows. Not only did the dollar amount increase by 2%, the time from claims submission to initial response rose from 10 to 13 days. Top reasons for denials include claims submission and billing errors, duplicate claims, bundling issues, pre-certification/authorization, and non-covered charges.

The average cost to rework a claim is $25 to $31, and a large percentage of claims are never resubmitted. Providers are leaving significant money on the table by not reworking claims. A better strategy, of course, is submitting clean claims the first time, which points to the need for robust claims software that’s easy to use and proven to increase acceptance rates.

Efficient claims processes can speed payments

The stakes for submitting clean claims have never been higher, not only to maximize practice revenue, but also to avoid an increasing number of audits. More than 80% of claim denials are associated with Medicare, so practices must focus their efforts on improving the claims process for federal payers.

What’s more, audits of federal claims are on the rise. The federal Health Care Fraud and Abuse Control (HCFAC) Program and the Medicaid Integrity Program received nearly $2.5 billion in FY 2023 for audit activities, an $80 million increase from FY 2022. Studies show audits like these return $8 for every $1 spent, so federal authorities are unlikely to discontinue such activities.

Once a claim is approved, providers must then collect the balance from patients, which brings its own challenges. Seventy percent of providers say it takes more than 30 days after a patient visit to collect on that visit. For 74%, that means sending a second statement. Consequently, nearly one-half of practice leaders report their A/R days increased during 2021. Billing processes can be costly and time-consuming — especially if a practice must send multiple bills to collect a single balance.

The cost of healthcare continues to shift to patients, which underlines the importance of accurate and timely claims processes. Nearly 30% of Americans are covered by high-deductible health plans (HDHP). For 2023, family deductibles are $3,000, with a maximum out-of-pocket for in-network services of $15,000, leaving families financially responsible for considerable amounts before insurance pays for anything.

Overwhelmingly, consumers are confused by health insurance terms and bills, with only one-third correctly identifying the difference among premiums, co-pays, and deductibles. More than 70% of consumers express confusion about explanation of benefits (EOBs) and medical bills. Diligent claims processes shorten the time between visits and billing, increasing collections and reducing A/R days.

Give patients the experience they desire

While the patient visit is the focus of the practice, the claims process is the focus of collections. Electronic claims processes are much faster than manual transactions, giving billing staff more time to explore additional avenues for increasing collections. Submitting and viewing electronic remittance and reviewing benefits and eligibility in real time benefits both providers and patients in terms of efficiency and transparency. When claims rejections occur, billers need a fast, simple way to review the error, research it, and resubmit the claim.

Patients are no longer just patients. They are consumers who demand a say in how they access, receive, and pay for medical care. Adopting electronic processes wherever possible helps meet these patient/consumers where they are while improving internal workflows that create more efficient processes and speed collections.

Rob Stuart is founder and president of Claim.MD, a leading electronic data interchange (EDI) clearinghouse helping to streamline the billing and collection process for providers, payers and software vendors.