Consumers in retail settings have long grown accustomed to knowing exactly how much an item or service will cost. The merchant sets a price, and the customer decides whether he or she is willing to pay that price. Historically, however, healthcare settings have not presented patients with the same kind of experience.
Seldom can providers tell patients exactly how much they will owe for a visit right at the time of the visit. The reason, of course, is the involvement of a third party in the transaction -- the insurance company. Healthcare providers may negotiate fees for their procedures, but it is the insurance company that decides how much of the fee each patient must pay.
Until recently, healthcare providers did not have immediate access to the insurance company data necessary to discuss a patient's financial and benefit information. It is not uncommon, for instance, for the pre-determination of dental benefits to take up to six weeks. But recent technological advancements in real-time processes are playing a significant role in transforming the traditional health and dental visit.
Over the past several years, real-time technology has enabled online access to insurance databases. While not all companies support this kind of technology yet, more and more are beginning to recognize the distinct benefits of doing so -- and are increasingly moving the healthcare industry toward a more retail-like experience.
Right now, for instance, providers can use real-time eligibility and benefits verification tools as soon as a patient schedules an appointment. Using technology that sweeps the schedule for the next day's appointments, for example, they receive reports that detail the exact insurance benefits available to each individual patient. Pre-determination tools similarly show how much a patient will owe for future visits for a particular course of treatment.
Timely access to this kind of data finally enables healthcare providers to discuss treatment options in tandem with financial obligations. Car dealers routinely discuss financing terms at the point of sale. Healthcare providers now also can sit face-to-face with patients to arrange payment plans, making sure they are comfortable with every aspect of their treatment -- including cost.
Knowing the cost of service upfront affords advantages to patients, providers, and payers alike. For providers and patients, it takes the guesswork out of patient financial responsibility. Real-time benefits determinations make it immediately clear whether a procedure is covered, how much the insurer will pay, and how much the patient will owe. Patients have the information they need to make a truly informed treatment decision, rather than defer vital procedures because they are unsure of cost.
The business benefits to providers and payers are equally important, especially in a soft economy. Real-time electronic claims submission, electronic remittance advice (ERA), and electronic fund transfers (EFT) create more revenue cycle efficiency by eliminating many time-consuming, labor-intensive processes.
Real-time predeterminations, for example, are dramatically reducing the amount of time staff must spend chasing basic patient eligibility details through phone calls and Internet searches. Faster adjudication by the insurer also means faster claims filing, as well as the ability to ask patients for payment before they even leave the office. EFT facilitates full payment by insurers within a day or two -- instead of weeks. For providers, cash flow is accelerated and accounts receivable (A/R) decreased. For payers, manual costs are diminished.
Most businesses will agree that the best way to improve revenue is to trim costs. The processes enabled by real-time technology alleviate the need for many manual tasks, such as printing and mailing statements; cutting paper checks; posting paper remittance data; posting check payments; and working collections. Few retail stores mail paper invoices to customers every 30 days to request payment; the same holds true for healthcare providers who take advantage of real-time processes.
Many of the current healthcare reform initiatives focus on the use of technology to improve patient outcomes and lower costs. Look five years down the road, and it would not be surprising to see all payers embracing real-time adjudication as a way to reach both of those goals. Healthcare providers will then have the ability to best serve their patients by combining clinical and payment discussions into a single conversation -- something already done by most other merchants.
Brian Cutler is the senior vice president of Mercury Data Exchange (MDE), a provider of real-time electronic data interchange (EDI) services. Based in Roanoke, Va., MDE connects dental practices, payers and vendors through real-time technology.