Regulation Forces Healthcare Pivot to Patient Estimates

The No Surprises Act of 2020 and the pending Medical Debt Relief Act are designed to balance the scales of healthcare affordability and the ability to pay. It’s a win for consumers beset by medical issues and large medical bills, but now it’s providers that are stuck in the middle.

Faced with stiff new regulations around what patients can and can’t be billed for, hospitals, healthcare practices and adjacent services are scrambling to meet the challenge of providing treatment estimates in advance — not something most do — while keeping up collections.

And as inflation adds an unwanted new wrinkle to this conundrum, Experian Health Vice President of Product Management Victoria Dames told PYMNTS that the sector has some significant transforming yet to do, lest medical debt becomes a larger problem than it already is.

“If you think about where medical debt and payments come into play, when you have a pile of bills, you’re [thinking] ‘what’s keeping my lights on?” she said. “What’s not going to get me evicted? What’s going to pay my car to get me to and from work?’ On that pile, medical bills go down the list.”

That means fewer payments to hospitals and practices rushing to be compliant in compressed time. Some partner with data experts like Experian Health to get above the storm, integrating technology that helps make the payment process simple and convenient.

While seamless payments are expected during the actual collection process today, Dames brought the discussion back to the No Surprises Act. “Knowing as accurately as you possibly can what’s about to come is a huge part” of giving precare estimates, she said.

“It’s common to get an estimate today. It’s less common to get a very accurate estimate.” But inaccurate healthcare cost estimates will get a practice into hot water post-pandemic.

There is a silver lining: Providers will give more accurate estimates, Dames said. And that’s going to result in better collections by level setting patient expectations from the start.

“The rate at which providers are already investing in estimate and payment technologies is going to continue to accelerate. Through the back half of this year, I expect [there] will be even a more pressing push for that,” Dames remarked.

See also: Experian Health Chief Sees New Digital Healthcare Experiences as Medical Breakthrough

Collection Corrections

The No Surprises Act took effect in January 2022, and with the Medical Debt Relief Act not far behind, this is shaping up as a good year for healthcare systems to get their tech in order.

Dames said it’s a good time for hospitals and practices to rethink collections and invest in technology, particularly looking at how they use data to understand better patients’ ability to pay. Making upfront estimates more accurate by tapping into robust datasets that also help judge payments risk is clearing some of the opacity from a broken healthcare payments model.

Noting that partnering with full-featured platforms and using rich datasets for decisioning head off collection problems downstream, as well as capturing any of that upfront payment a bit more quickly with those segments and then moving others to charitable or write off, Dames said, “there’s that efficiency play on those pieces.”

With regulations pressing down on an inflationary economy, she identified three investments that can help head off the associated issues: accurate estimates, the technology to support them and data and analytics to optimize collections by ensuring more efficient payments and faster yield.

See also: Healthcare Payments Get Patient-Centered Overhaul in 2022

No Pain, No Gain

To manage better in a patient-dependent revenue cycle, some practices are repackaging old-school payment plans, introducing concepts like “care now, pay later” and otherwise providing options to bring medical bills back to the top of the pile.

Dames is seeing more of this in the marketplace and thinks it’s a positive development, as it adds to transparency and gives patients new payment options that are now widely expected.

She said payment plans and treatment financing helps providers “set good expectations and commitments to those plans. It also provides for a good experience and a feel-good experience. There’s nothing worse than seeing a huge discrepancy between X and Y” in healthcare estimates.

“That doesn’t feel good,” she said, “especially when you are going to owe those funds.”

Dames noted that as a technology solution partner to healthcare providers, Experian Health is working with “more than 60% of the hospitals in the country” on revenue cycle management, patient experience and data optimization, and forging connections for the new collections.

Calling 2022 an “all-hands-on-deck” moment for healthcare, Dames told PYMNTS that providers are under tremendous pain that makes itself felt throughout the patient journey.

“The pain isn’t that they have to make the changes,” she said. “It’s that they have to make the changes while all of this is going on. [Regulatory deadlines don’t] move because we’ve had some of these hardships happen in the industry.”

Acknowledging that major forces are now reshaping a somewhat obdurate sector, Dames said, “These regulations affect all players. … providers, payers … but ultimately it will benefit the patient significantly. While the immediate path to getting better billing and payment process may escalate pressures on the provider right now … it will really yield better financial outcomes in the future for those patients, as well as those organizations. That’s clarity.”

And if all of this ends up putting downward pressure on healthcare costs? “I think everybody would agree that would be something we’ve all been awaiting for a very long time,” she said.