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CMS New Price Transparency Tool: How Your ASC Can Benefit

  • December 20, 2018
  • Published in Billing

Last month, the Centers for Medicare & Medicaid Services (CMS) released a new online tool to display cost differences for Medicare payments and copayments between hospital outpatient departments (HOPD’s) and ambulatory surgery centers (ASC’s). The new tool called Procedure Price Lookup helps patients with Medicare consider potential cost differences (average Medicare payments) when choosing where to have a medical procedure that best suits their needs. The costs do not include professional service fees however.

This tool is part of CMS' e-Medicine initiative, which includes drug pricing and spending dashboards. Between HOPD’s and ASC’s, costs can be quite different. For example, knee arthroscopy (with a meniscus repair) is $1,024 in an ASC versus $2,116 in an HOPD. That’s a $1092 difference between the two settings. Medicare beneficiaries without supplemental insurance also have a co-pay of $256 in an ASC versus $529 in an HOPD.

Prepare for Impact

Depending on how many consumers use Procedure Price Lookup and if the price differential is significant, case volumes would clearly change to favor one setting over the other.

As patients have more information about the costs of procedures, healthcare facilities should prepare for changes in activity levels and patterns at facilities.

Physicians would also be affected in at least two ways. First, some patients are likely to ask about the price comparison in discussing elective surgery with their physicians. Second, physicians who co-own ACS’s might benefit if more patients choose ASC’s for their surgical procedures.

Effects of Price Transparency

According to a study by The American Surgeon, ASC’s adopting price transparency can see increases in surgical volume, revenue and patient satisfaction. 

In the study, the authors identified ASC’s that list prices online in the Free Market Medical Association database. The study revealed that:

Patient volume increased by a median of 50 percent in one year (among five ASC’s that reported their patient volume and revenue after adopting price transparency).

Revenue increased by a median of 30 percent (among four centers that reported a revenue increase. 

Third-party administrator contracts increased as reported by three ASC’s.

Administrative burden reduced as reported by three centers.

Patient satisfaction and patient engagement increased after adopting price transparency as reported by five ASC’s.

More transparency to come?

On July 25, U.S. House Representative Daniel Lipinski, D-Ill., introduced a bill called the "Hospital Price Transparency and Disclosure Act of 2018". The bill would require all hospitals and ASC’s to disclose charges of the top 100 inpatient and outpatient procedures for both insured and uninsured patients. To become law, the bill must be passed by Congress and signed by President Trump.

CMS also finalized the hospital price transparency requirement in the 2019 Inpatient and Long-Term Care Hospital Prospective Payment System rule in August 2018. Hospitals are required to publish a list of their standard charges on the Internet or available upon request in a machine-readable format that can be easily imported into a computer system. This new change will take effect January 1, 2019.

With more price transparency and more procedures moving towards the outpatient setting, ASC’s are ripe for growth. As the industry moves toward a patient-centered healthcare system, price transparency will be considered a top priority.

3 Growing Trends in Outpatient Care and How They Affect ASC’s

3 Growing Trends in Outpatient Care and How They Affect ASC’s

With rising healthcare costs, patients continue to look for care in new settings according to their preferences and their wallets. According to a report by PwC Health Research Institute (HRI) in April of 2018, the increased willingness of consumers to receive care outside of the hospital or practice is creating disruption in the healthcare industry.

There are two major driving forces for this trend: consumer experience and cost. For example, health retailers like CVS Health and Walmart are focusing on consumer experience to bring patients into the fold and keep them coming back; using reward programs and giving incentives to patients to obtain care at a clinic or offering subscription-type services to keep consumers coming back on a regular basis. 

Consumers and employers all want care to be low cost and high quality. In the same HRI report, eighty-five percent of consumers surveyed would want to take advantage of options that would allow them to finance the costs of large medical expenses.

With that as backdrop, here are 3 trends that will shape ASC’s today and in the future: 

1. More hospitals are investing in ASC’s

As patients seek more convenient and affordable care, hospital systems are increasingly investing in ambulatory surgery centers (ASCs). HCA Healthcare intends to spend $3 billion on new outpatient clinics. Tenet Healthcare is also expected to put down over $1.9 billion in outpatient investments. 

With healthcare’s transition to value-based care, investing in ASC’s makes a lot of sense for hospitals. With advancements in technology (smaller incisions, anesthesia, and pain management), ASC’s have provided better outpatient capabilities; which are better for patients due to lower-cost and higher-quality care. 

It’s a trend that hospitals can’t ignore as technology continues to open doors for more things to be done on an outpatient basis.

2. Value-based care incentives favor outpatient settings

Today’s reimbursement landscape rewards value and penalizes poor outcomes and readmissions. Health plans and government program payment policies support providing services in lower-cost care settings which includes outpatient facilities. 

In a study of Medicare claims data between 2012 and 2015 conducted by Deloitte Center for Health Solutions, hospitals that derive a large part of their revenue from quality and value contracts had 21 percent more Medicare outpatient visits and 13 percent higher outpatient revenue compared with hospitals that did not report revenue from such contracts. 

Outpatient surgery has been known to be safe and effective, achieving similar or better outcomes as inpatient procedures. With outpatient surgery, patients spend less time in a medical facility, recover faster and incur less pain. 

3. Outpatient cost savings is on the rise

With increasing number of patients in high deductible health plans with large out-of-pocket expenses, outpatient facilities are becoming the more logical choice for many cost-conscious patients.

In 2014, Blue Cross Blue Shield reported that outpatient total per-procedure savings ranged from $4,505 for hysterectomy to $17,530 for angioplasty. In 2016, Orthopedic Reviews also estimated an average cost savings of 17.6 percent to 57.6 percent for outpatient orthopedic procedures compared to inpatient. 

More savings could be gained if a greater number of procedures were to be performed in outpatient surgery centers. Only 48 percent of all surgical procedures approved to be performed in an ASC are performed there. If the other 52 percent of approved procedures were performed at ASC’s, an additional $41 billion could be saved annually.

Moving forward, ASC’s that leverage these trends would be better positioned for growth and increased bottom line amidst a changing healthcare landscape. 

3 Strategies to Deliver Better Patient-Centered Financial Experiences

  • October 30, 2018
  • Published in Billing

There’s a growing trend affecting patients in the U.S. today: delaying or avoiding care because of concerns about costs. High out-of-pocket costs are restraining access to care for many. Even when patients have access and decide to get care, the costs and the financial experience result in even more stress.

Today’s healthcare consumers are also increasingly demanding efficient and smooth experiences as they take a greater financial responsibility for their care. In a study by global brand and marketing consultancy Prophet, only 23 percent of healthcare providers measure their consumer relationship. 

Reimbursement policies are placing patients at the center of value-based purchasing and bundled payment models. Hence, a significant percentage of your facility’s A/R is in the hands of patients. With increasing patient financial responsibility, it is essential to give patients a better financial experience.  

Here are 3 strategies to give better financial experiences for your patients:

Using Payment Integration

Payment integration allows your center to be where your patients are in terms of their preferred method to make payments. When your payment system is integrated with your other systems, you have opportunities to collect at every patient interaction point.

With payment integration, patients can have access to their accounts online so they can see what their insurance has covered, verify recurring payments, check their payment status, and make payments anytime and anywhere. You can enable patients to make payments through any payment channel (online, mobile, over the phone, bank’s bill pay site, etc.) with all payments posting to your existing system in real-time.

Providers that use automated payment systems that can post patient payments directly to the patient accounting system report collection increases and AR reductions.

Train Staff

A highly engaged staff likely boosts patient experience, translating into better performance. According to a study by Deloitte Center for Health Solutions, patient experience scores pertaining to interactions with nurses have the strongest association with hospital financial outcomes. ASC staff needs to be able to empathize with patients and be trained to use tools and technologies that improve the patient experience.  

The study also found that staff engagement measures such as quality of staff, staff communication and responsiveness, and appointment ease, among others, were the most important drivers of patient experience.

Find the Right Partner

Financial services are not a core competency for healthcare providers. But by partnering with companies with core expertise in revenue cycle management and financial services that streamline the end-to-end payment process, providers can solve their most pressing financial problems as well as improve the patient experience. 

Your center needs to partner with healthcare-exclusive vendors rather than a one-size-fits-all agency. Choose healthcare specific vendors that take time to educate patients and help patients understand their financial responsibility in the friendliest possible way. The right partner can raise your facility’s standards for ensuring patient satisfaction and improving collections with implementation of technology, automation, and optimization of revenue cycle processes.

New Propensity to Pay Technologies Can Reduce Payment Defaults from Self-pay

With revenue coming from self-pay increasingly becoming a large portion of the total revenue for healthcare providers, there’s an even greater need for innovative ways to approach the patient collection process. 

According to the National Association of Healthcare Access Management (NAHAM), self-pay is the third largest payer just behind Medicare and Medicaid. Patients now represent about 30 percent of healthcare revenue. 

Self-pay comes at a high price, especially for facilities looking to clamp down on cost and increase revenue. The cost of collection for self-pay is estimated to be three times that of commercial insurance. Moreover, a significant portion of self-pay balances go uncollected by providers and are eventually treated as bad debt.

Since this problem is connected to the growing financial responsibility of patients (many are unable to offset their medical bills without getting credit), it cannot be avoided. Surgery centers will still have to extend credit facilities to patients unable to settle their medical bills at the point of service.  

However, leveraging new technology has helped minimize the risk of default from patients while also simplifying the collection process for both patients and providers.

Recently, behavioral based propensity-to-pay models have been developed to overcome the limitation of accurately predicting the medical indebtedness of patients. The previous practice was to rely on credit scores to predict the probability of default by patients. Credit scores are however not well suited for this task as they focus more broadly on consumer debt.

This new technology relies on data from multiple sources to accurately predict patient’s likelihood of default. Based on their credit ranking, patients are then offered payment plans tailored to suit their ability to pay. 

Providers therefore have greater assurance of a lesser risk of default on the credit advanced to patients. This in turn results in win-win situation for both parties as their interests are aligned.

By being able to ascertain a patient’s ability to pay before surgery is conducted, an ASC can prevent default by engaging patients on the available payment options. Moreover, the time and effort spent unproductively on tracking collections from patients who are unlikely to pay will be significantly eliminated.

A facility can therefore re-prioritize by channeling more resources to patients with a higher probability of repaying their debts. This should in turn increase the facility’s revenue level while also improving their patient satisfaction ratings.

The increase in patient responsibility for medical expenses is changing the way self-pay is being approached by ambulatory surgery centers. At the core of this shift are innovative technology solutions that improve the collection process through computer-based algorithms.

Needless to say, centers will still have to engage with patients on a personal level to get information that software codes just cannot reveal.

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