Medical billing can be a complex and challenging process. The challenges that healthcare providers face range from coding errors and insufficient documentation to inaccurate patient information, improper claims filing, and denials. Medical billing outsourcing is a widely accepted solution to these problems.
Patient financial obligations are increasing with higher premiums, deductibles, and employer contributions, as per a Kaiser Family Foundation Study. While medical billing problems primarily impact healthcare providers and insurance companies, patients can also face certain challenges related to medical billing.
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Common Medical Billing Problems that Patients Face
Here are some common medical billing problems that patients may encounter:
Lack of transparency: Patients often find medical bills confusing and difficult to understand. Lack of transparency in billing practices, including unclear itemized charges, codes, and terminology, can make it challenging for patients to comprehend the services they are being billed for. According to a Revenue Cycle Intelligence article citing a 2020 survey, less than half of healthcare consumers have a clear understanding of their medical bills. About 50% of consumers also reported that they pay their medical bills late, with many citing confusions as a reason why. Some respondents said they did not think they would be accountable for the charge, while one in five did not understand exactly how much they owed.
To meet patient demands for transparency and clarity, new federal laws and regulations are diligently working towards providing healthcare consumers with simpler medical bills and a clear understanding of their financial responsibility for their care.
Unexpected costs: Patients may receive unexpected medical bills for services they thought were covered by their insurance plans. This can occur when they receive out-of-network care without realizing it or when services are deemed medically unnecessary by insurance providers and not covered.
Denied claims: Insurance companies may deny claims for various reasons, such as missing or incorrect information, lack of pre-authorization, or the insurance company deems the service as not medically necessary. When claims are denied, patients are left responsible for the bill, resulting in unexpected financial burden.
Inadequate insurance coverage: Patients may face limitations in their insurance coverage, such as high deductibles, co-pays, or co-insurance. These out-of-pocket costs can be significant, especially for expensive procedures or long-term treatments, making it challenging for patients to afford necessary healthcare.
Billing errors: Patients may receive bills with incorrect charges, duplicate charges, or charges for services they never received. These billing errors can lead to confusion and frustration for patients, requiring patients to spend time and effort in rectifying these discrepancies.
Lack of cost estimates: Prior to receiving medical services, patients often lack access to accurate cost estimates. This makes it difficult for them to plan and budget for their healthcare expenses, leading to financial surprises when the bills arrive. Surveys show that patients want more price transparency, and also know their specific out-of-pocket costs, not just what the healthcare facility’s gross charges are. The 2021 Annual Consumer Sentiment Benchmark revealed that up to83% prioritize the availability of precise out-of-pocket cost details prior to receiving healthcare services. Furthermore, an alarming 25% of patients have refrained from seeking necessary care due to insufficient information regarding costs.
Collection agencies and debt: In cases where patients are unable to pay their medical bills, healthcare providers may involve collection agencies to recover the outstanding balance. However, relying on collection companies may not always be the wisest course of action, as it can negatively impact a patient’s credit score and financial well-being. The practice risks losing patient loyalty as these companies employ aggressive tactics and their services come at exorbitant fees. Collection agencies typically have a relatively low success rate in debt recovery.
Healthcare practices should carefully evaluate alternative strategies for debt recovery that prioritize maintaining patient relationships. They can consider collaborating with financial counselors to find mutually beneficial, result-oriented solutions that retain the patient’s loyalty.
Inadequate insurance assistance: Patients may face challenges when dealing with insurance companies, such as long wait times, unhelpful customer service representatives, or difficulty navigating complex insurance policies and procedures. This can add to the frustration and stress of managing medical billing issues.
What Patients Can Do
When it comes to medical expenses, patients often have a portion to pay, such as a co-payment or deductible, while the remaining amount is billed to their insurance or managed care company. In situations where paying the full amount upfront is challenging, patients can request extended credit options to spread out the payment over time. Whether interest is charged for this extended credit depends on the specific credit laws in each state.
Once the payment is made, an explanation of benefits (EOB) statement is received from the insurance company, providing detailed information about the payment. It is essential to endorse all received payments with a rubber stamp for proper documentation. In case of any uncertainties regarding the diagnosis or services performed, it is advisable to reach out to the physician or healthcare provider directly to seek clarification and address any doubts.
Here are six steps that patients can take to address medical billing challenges:
- Review and understand their insurance policy, including coverage limitations and out-of-pocket expenses.
- Verify insurance coverage and obtain pre-authorization when necessary.
- Keep detailed records of medical visits, services received, and bills received.
- Actively communicate with healthcare providers and insurance companies to clarify billing concerns and seek resolution.
- Seek assistance from patient advocacy organizations or financial counselors who can help navigate medical billing challenges.
- Negotiate payment plans or discussing financial hardship options with healthcare providers if unable to afford medical bills.
By being proactive and informed about their healthcare expenses, patients can minimize the impact of medical billing problems.
Outsourcing Medical Billing benefits Providers and Patients
While medical billing outsourcing to an efficient and competent company can help practices streamline claim submission, reduce denials, and maintain cashflow, it can benefit patients too. By submitting accurate claims, patients can avoid billing disputes and potential delays in receiving insurance reimbursements.
When medical billing processes are outsourced, patients may gain access to clear and detailed billing statements. This transparency allows patients to understand the breakdown of charges, insurance coverage, and out-of-pocket expenses, promoting better financial awareness and enabling informed decision-making regarding their healthcare expenses. The insurance eligibility verification process provided by a medical billing companycan reduce claim denials and rejections.
Healthcare providers can dedicate more time and attention to patient care when their administrative tasks are handled externally. They can focus on delivering quality care, providing a better patient experience, and fostering stronger relationships with patients. The cost savings that outsourcing offers can indirectly benefit patients by potentially allowing providers to offer competitive pricing.