“Transparency” is a ubiquitous buzzword heard throughout the healthcare industry, usually in reference to medical price and cost information between patient and provider. Price transparency is, of course, one of the main stated goals for providers in the Affordable Care Act.
But for healthcare reform to be successful, at least as far as healthcare providers are concerned, transparency is equally important within the organization and with its respective partners. We are entering a new ecosystem of healthcare, where more people are insured, but more people than ever will owe, in the form of unpaid deductibles and co-insurance.
Here are a few ways to advance transparency between providers and partners:
Transparency between provider and primary collection partner. The days of the clean handoff of accounts receivable from healthcare provider to collection partner are gone. Instead of a handoff, accounts should be shared, at least electronically, so that both provider and collection partner have visibility into the status of any account at any time. When problems occur, provider and partner can work more efficiently together to resolve issues in a timely fashion, reducing patient frustration.
Transparency between provider, primary, and secondary collection partner. With the recent changes to HIPAA, the provider is just as responsible for the actions of a secondary collection partner, even if the primary partner acts as an intermediary. The transfer to a secondary partner should not be done blindly (a common practice where the primary returns the account to the provider who then distributes it to the secondary). Secondary partners should have access to the transaction history behind that account, including actions taken by the primary.
Transparency between provider, collection partners, and credit bureaus. At least one piece of federal legislation may force a change in this relationship. If Congress passes and President Obama signs the Medical Debt Responsibility Act, medical debt will have to be removed from credit reports within 45 days of its resolution. This will require coordination between providers, collection partners, and credit bureaus. A separate bill, introduced in the U.S. House in late May, would provide yet another layer of complication in coordination between the three; the measure would bar collectors from reporting medical debt to the three major credit reporting firms for 120 days under most circumstances.
Many providers and partners have already increased and improved transparency. But over the next few years, such transparency should not be the goal, but simply the mechanism to improve business processes to achieve bigger objectives, namely:
More data, the better. The challenge is that many people do not wish to pay their bill, and will make excuses, dodge, and use other subterfuges to avoid their financial responsibility. The revenue cycle management industry needs to become more efficient about identifying those with the ability to pay and separating them from those who have legitimate issues that keep them from paying. While tools today are better than ever at identifying “propensity to pay,” they are dependent upon data. The more complete the A/R record and the better is shared between partners, the more intelligence these tools will have to weed out the bad apples.
Building a case. Healthcare providers, collection partners, and credit bureaus need to become more proactive about making the public aware of the impact and cost upon our healthcare system of those individuals who have the ability to pay but do not. To make this case requires more and better data. While we cannot and should not single out individual patient cases, in aggregate we can make a compelling case regarding the outright fraud committed against physicians and hospitals.
Full-file reporting. Although fraught with pitfalls and regulatory hurdles, the more information shared between provider and partners about the entire payment history of a patient–not only the missed payments, but the payments on time–will help eliminate much of the criticism aimed at the A/R chain. Patients who pay on time will benefit in their credit scores.
Transparency within the A/R chain is coming whether we want it or not. Congress, state legislatures, and their respective agencies are regulating our industry like never before. By working to improve transparency from within, we can stave off transparency forced on us from without.