Paying for healthcare is kind of like that game on The Price is Right. The one at the end of each episode where a contestant wins a valuable prize—if only they can guess the correct price. Except that in healthcare, the “prize” is not owing hundreds of dollars more than you anticipated. For many patients, paying for healthcare—especially surgery—is essentially a guessing game. They close their eyes, count slowly back from ten, wake up in the recovery room, and hope for the best.
It’s perplexing how a system where a patient agrees to purchase a service—and actually receives the service—before they know the cost has survived for so long. But that’s starting to change, albeit very, very slowly. Over half of U.S. states have enacted some kind of price transparency law. Those laws vary widely in what they entail (many aren’t even helpful to patients in a practical way), and a significant portion apply only to hospitals or HOPDs. But for the past several years, surgery centers have been following suit, even when it’s not required by state law. Why? Here’s a look at what’s fueling that trend:
- High Deductible Health Plans
Patients are increasingly responsible for larger out-of-pocket payments. This will lead them to consider price and quality more carefully—or at least that’s the plan, anyway. Surgery centers will be increasingly popular because they offer lower—sometimes much lower—costs than hospitals. Price transparency can reflect that.
Hospitals and health systems continue to acquire physician-owned ASCs—which means fewer surgeons are bringing cases to independent ASCs. “If you are a smaller player in a market, you are going to risk losing access to patients,” says Steve Sheppard, who presented during an OOSS session at a previous AAO symposium. Independent ASCs will have to shift their marketing from surgeons to consumers. Price transparency can help.
- Value-Based Reimbursement: You may not be part of a MIPS APM, but your peers may be—peers who are referring patients to you. If your referral sources (think PCPs, general ophthalmologists, optometrists) are operating under value-based contracts or bundled payments, they may prefer to refer their patients to lower cost providers and facilities in order to keep costs down.
Price Transparency: Voluntary, or Necessary?
If you’re wondering why you should think about incorporating price transparency into your ASC, even when you state doesn’t require it, consider this: It’s better to be ahead of the curve than behind it. Increasing numbers of ASCs are publishing pricing, either on their websites or in a chart that’s given to patients at their consultation. Embrace the trend, or risk patients perceiving your center as a dinosaur. Here are two other incentives:
It’s no secret. Healthcare pricing is confusing for even sophisticated consumers. The patient goes in for surgery and they think they are getting a thing, explains Cindy C. Parman, CPC, CPC‐H, RCC, who spoke at a recent surgery center conference in Richmond, Virginia. Instead, they get 17 different services and 17 separate co-pays. Patients don’t like that (and neither does CMS).
Your Bottom Line
Unanticipated bills don’t often lead to prompt payment. Whether they don’t have the money or just dragging their feet, the result is the same: less cash flow, more days in A/R, more precious staff time and overhead spent following up on delinquent accounts. Price transparency may also help your center attract more cash payers. If a patient sees an estimated price on your website, and has a high deductible plan, they may opt to pay cash at your center rather than go through their insurance.
Price Transparency Do’s and Don’ts
If you do decide that adding a price transparency initiative to your center’s strategic plan is a good idea, follow these guidelines
Have a plan.
Physician-owned, independent ASCs often don’t have a template to follow when it comes to things like this. You can’t just look up your last 20 cataract patients and throw their average bill up on your website.”Physician-owned ASCs just tend to need more hand-holding in terms of the right way to do things, and actually doing things the right way once they know what that is, says Cristina Bentin, CPPM, CPCO, CPC, CCS-P, CMA, who talked to ASC administrators about business issues at last year’s ASCA conference.
Know your options.
You don’t have to post a price for every single procedure, or give patients an exact dollar amount. You could figure your top ten procedures and use those, you could publish a price range, or you could even list the maximum price with a cap.
Be ready to talk.
If a patient wants to know why your price differs from the center down the road, or why it’s “so cheap” compared the local hospital, make sure your staff members have been well-trained on how to respond, or even have a scripted response. You’d never want to appear as if you have no idea where those prices are coming from, or what they include.
Be sure you are crystal clear on the “fine print.” Patients need to absolutely know that there are limitations on the estimates. Make sure they know what is included and not included. “What’s amazing about the ASC industry is that we do a pretty good job of containing costs compared to hospitals, but the white light [of OIG] is on you still and you have to be very organized when you show consumers what they’re paying and what they’re going to get for it,” notes Lisa Rock, president of National Medical Billing Services, who also conducted an ASCA session.
Consult your attorney
He or she can assist you with your disclaimer and ensure you are in compliance with any state regulations.
Post your chargemaster.
Cash-pay patients may find those prices useful, but the prices aren’t accurate for patients using insurance. When publishing your pricing, don’t forget include a statement letting patients know that if they are using their insurance, the prices do not apply. In that case, your center’s financial counselor (you have one, right?) would step in.
Once the procedures are priced out, don’t forget to periodically review and update them.
Forget about quality.
One side effect of price transparency is increased competition within markets—physicians fear that it will end up as “a race to the bottom.” Remember that quality data is public and available to patients on the PhysicianCompare website. High quality scores may well justify a higher cost. But if you are higher cost and lower quality compared to your competition, you could be in trouble.
Price transparency can come with an unintended consequence. If your payer sees lower-cost price data, they may want to renegotiate.
Does Transparency Work?
The big benefit of price transparency for physicians and surgery centers is this: patients that know in advance what their surgery will cost are happier patients. But the government is focused on encouraging patients to “shop” for medical care. For the vast majority of patients, that’s something they’ve never done before. A few of the issues?
- Providing price without easily understandable quality data is meaningless.
- Patients may not want to see anyone other than their PCPs or general ophthalmologist’s referral.
- Price may not impact their out-of-pocket costs, they’re indifferent.
- Patients may choose a higher cost center because they think that higher price means better quality.