On the surface, a patient payment estimator is exactly what it sounds like. It factors in the varying conditions of a patient's health plan, as well as the projected treatment based on reason for visit to estimate what the patient will owe for services rendered. But dive a little deeper, and the all-encompassing benefits of a payment estimator becomes increasingly apparent.
In determining the patient's obligation, you also identify conditional aspects of insurance coverage, such as prior authorizations, that weigh into insurance eligibility. Furthermore, you implicitly provide the ability to maximize reimbursements from both insurance and patients. On top of all that, the ability to give patients upfront cost estimates can significantly improve the patient experience. Let's unpack some of these benefits in greater depth:
The ability to collect the patient's portion of the bill prior to or at the point of service is a critical metric for determining a practice's revenue performance. When represented as a percentage, point-of-service collection rate should be as close to 100 percent as possible. Anything less indicates care has been delivered without patient payment obligations having been met. This issue is especially pertinent in today's high-deductible/cost-sharing climate.
Patients represent a growing source of revenue, particularly in specialty care: Beyond deductibles, 64 percent also face co-payments and 27 percent face co-insurance costs, according to the Kaiser Family Foundation. High-deductible health plans (HDHPs) and other insurance-plan structures have led to increased out-of-pocket medical expenses and more convoluted reimbursement dynamics.
A patient payment estimator can improve point-of-sale collection rates by providing a timely billing estimate based on the reason for visit, insurance eligibility and the expected treatment regimen. This helps eliminate the risk of retroactively blindsiding patients with a bill that's higher than expected. In turn, this means fewer uncollected payments.
From the patient's perspective, cost transparency is incredibly important. According to a recent Black Book Survey, 94 percent of patients want improved online pricing transparency. For this to work, practices first need a patient estimator that reduces the likelihood of under- or over-collecting payments at the point of service. With real-time calculations based on coverage and deductibles, there's complete visibility into the cost of care for the patient.
The second part of pricing transparency is the ability to share cost information with patients. More healthcare providers are giving patients the option to register online. This is an improvement to practice efficiency in the sense that it reduces in-office paperwork and potentially enhances patient flow. But when this capability is combined with a patient payment estimator, practices can readily provide cost estimations to the patient prior to the actual appointment date, and even provide the option to cover the co-pay or deductible ahead of time. Practices can also distribute patient payment agreement forms via the online portal.
Online cost estimates benefit patients by projecting the price of care well in advance of treatment. Simultaneously, it benefits the practice, because it improves the likelihood of reimbursement from the patient.
A patient payment estimate also overlaps with insurance eligibility verification and prior authorization. Identifying what an insurer will cover naturally influences the out-of-pocket cost estimate to patients. This helps practices down the road, as they prepare claims for submission.
It's worth noting that a patient payment estimate is still just that – an estimate. But new codes and specific modifiers can be factored into the price in real time if necessary and presented to the patient immediately before treatment. The point is, distinctions in payer obligations are made as in advance of treatment as possible with a payment estimator, which helps keep revenue sources organized in the earliest phases of the RCM lifecycle.
To an extent, prior authorization is also factored into a patient payment estimate. An effective digital practice manager (PM) will analyze the reason for a visit to estimate the treatments that might be prescribed. It then assesses which of those treatments are eligible for coverage based on the patient's insurance plan. In many cases (especially with HMOs), specific treatments are only eligible for coverage with prior authorization from a primary care physician.
A payment estimator is the centerpiece of a workflow that identifies cost obligations early in a patient encounter. When it works well, a practice can manage its revenue more effectively and efficiently, and patients can have complete billing transparency.
A solution like AllMeds' PM uses payment estimators and other features to enhance every aspect of revenue management and the patient experience. Learn more about how it can help every aspect of your practice today.