Imagine walking into a barber shop or salon for a haircut and maybe a little coloring or highlights and not being able to get a definitive answer on how much it will cost. You’d probably turn around and walk right out.
Yet this lack of transparency about how much one owes at the end of an episode of care is the exact experience most people have with health care services, which are far more important to their lives than their hairstyles (at least for most people most of the time!).
In general, it can take weeks or even months for health care payers to generate a complete explanation of benefits (EOB) that shows what insurance will cover and what the member’s portion will be. This time lag is often a result of the complexities involved in health care. For example, multiple claims may be submitted by different parties involved in an encounter, such as surgery. These claims may be reimbursed at different rates or sometimes not paid at all. Reaching a final benefit determination is made even more difficult by time-consuming, manual processes involved in reviewing and approving claims.
When deductibles were low and insurance covered nearly all the costs, that wasn’t much of a risk for providers. They could afford to write off a few delinquent patient portions here and there.
Because of the explosive growth of high-deductible health plans over the last few years, that is no longer the case. Patient charges can run into the thousands, even tens of thousands of dollars. Many people are not prepared for such high costs. Because a service occurred in the past, a health care bill may not seem as important to the patient as current necessities, such as rent or mortgage payments, groceries, or electric or phone bills. Providers may end up waiting a long time to get paid—if they get paid at all. And patients (as well as providers) are unhappy with payers for the entire process, creating animosity between all three parties.
This is no way to run a business, especially in the digital age. But the solution is obvious. By replacing those manual processes with technology that can process and approve clean electronic claims immediately, payers will instantly be able to return an EOB that shows exactly what insurance will cover and what the patient owes.
The provider can then present that EOB to the patient while he or she is still in the office, often before services are rendered, so the provider can collect on the spot rather than waiting weeks for a payment that will never come. In the case of high-cost services, the patient has the data to make an informed decision, and the provider has the opportunity to have a conversation about financing options that will spread out the burden while greatly increasing the chances of being paid in full.
This is not some futuristic scenario. My company has the technology to acquire data from disparate data sources, automatically compare multiple claims from different providers to contracted information, and generate an electronic EOB and is in use. For example, more than 90% of medical claims are already being filed electronically. By replacing manual review with an application that can automatically review all claims based on the payer’s specific edits and generate an EOB for those with no problems, payers gain two benefits. They can move the approval process from weeks or months to seconds, and they can reduce their costs by roughly 75% while becoming a better partner to providers.
Health care used to revolve around a special relationship between individual physicians and individal patients that was usually paid for by a third party. Now, like it or not, it is increasingly becoming like other retail encounters—a transaction between buyers and sellers. Patients, providers, payers—everybody needs to adjust.
With the right technology and the will to change, the process of paying for health care can become as simple—and as painless—as getting a haircut. And no one will feel like they’re getting clipped.