15 things to know about hospital billing and patient payments

Hospitals across the nation are exploring ways to capture more revenue to succeed in the current challenging economic environment. At the same time, many patients are facing unexpected medical bills and having trouble paying for their care.

Here are 15 things to know about hospital billing and patient payments.

Medical bills can be confusing, overwhelming
1. About 20 percent of insured Americans ages 18 to 64 reported struggling to pay medical bills in the past year, while 53 percent of uninsured Americans reported the same problem, according to a Kaiser Family Foundation/New York Times survey.

2. Fifty-three percent of Americans believe receiving a large, unaffordable medical bill is as bad as being diagnosed with a serious illness, while 10 percent of Americans believe a large medical bill is worse than a diagnosis, according to an Amino & Ipsosreport.

3. The number of people struggling to pay their medical bills is shrinking. The percentage of Americans under age 65 in families struggling to pay medical bills decreased from 21.3 percent in 2011 to 16.2 percent in the first half of 2016, according to a report from the CDC's National Center for Health Statistics released in November. 

4. Medical bills confuse most patients. According to a Mad*Pow report released in 2016, 60.5 percent of patients said the medical bills they received were confusing or very confusing. The report was based on survey responses from 355 patients.

5. Patients said they most often received medical bills in the mail (43.8 percent) or at the point of service (30 percent) and less frequently through email (17.4 percent) or a patient portal (6.6 percent), according to the Mad*Pow report.

States are taking action on balance billing
6. The practice of balance billing refers to a physician's ability to bill patients for outstanding balances after the insurance company submits a portion of the bill. Out-of-network physicians, not bound by in-network rate agreements, may bill patients for the remaining balance. This practice leads to patients receiving surprise medical bills.

7. Many patients receive surprise out-of-network bills for a visit to an in-network hospital's emergency room, according to research published in The New England Journal of Medicine in November. For the study, researchers examined billing data from a large commercial insurer for people under 65 years of age. The data covered 2.2 million ER visits across all 50 states. The study revealed that patients who went to an in-network hospital's ER received a surprise out-of-network bill 22 percent of the time.

8. In March, the American College of Emergency Physicians responded to the study published in the NEJM, saying it "fails to provide a fair assessment of so-called surprise billing in emergency care." Rebecca Parker, MD, president of ACEP said, "As soon as we saw the outrageous claim that patients received thousands of dollars in balance bills from emergency physicians we knew we had to respond strongly and quickly. It's simply not true. We know that as an industry the balance bills of emergency physicians are less than $200 on average. Our state-based data demonstrates this and sets the record straight."

9.  Federal law does not protect consumers from balance billing. About one-fourth of all states have policies to address at least some of the scenarios that typically result in unexpected charges.

10. Legislators from seven states proposed legislation in the first few months of 2017 to mitigate the practice of surprise medical billing.

11. Thirty-seven percent of Americans said they could not pay for an unexpected medical bill that exceeded $100 without going into debt, and only 23 percent would be able to cover an unexpected medical bill of more than $2,000, according to the Amino & Ipsos report.

Hospitals and physician groups are outsourcing billing
12. The U.S. market for physician and ambulatory revenue cycle management outsourcing is expected to increase by 42 percent from the fourth quarter of 2016 to the first quarter of 2019, according to a September 2016 Black Book survey of 2,000 independent physician practices and 200 hospital-based physician practices.

13. A December 2016 Black Book survey, which included responses from 1,309 hospital CFOs and business office leaders, revealed 39.8 percent of U.S. hospitals outsourced complex claims to a specialized vendor in the third quarter of 2016. That's up from 20.4 percent of hospitals in 2013.

14. Many hospitals hope outsourcing will reduce write-offs and give their organizations a financial boost. According to the December Black Book survey, 49 percent of hospital CFOs said outsourcing, including offshoring, is becoming a more viable alternative in 2017 for more parts of their organizational claim processing.

15. Black Book projects the market for outsourced revenue cycle management will grow at a compound annual growth rate of 26.5 percent over the next two years, with the market reaching a value of $9.7 billion by 2018.

More articles on healthcare finance: 

Mayo Clinic to give preference to privately insured over Medicaid, Medicare patients
OIG tags Florida hospital for incorrect billing
Pathology lab files for bankruptcy after settling false billing suit

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