Medical bills are a major source of confusion and frustration for patients and consumers. Often, they can be the patient’s first lesson in just how complicated and vexing the United States healthcare system is.
To address this, the Department of Health and Human Services has launched a competition to crowdsource a better medical bill. “A Bill You Can Understand” is a design contest with up to $10,000 on the line for the best improvements and innovations to the healthcare billing process.
Improving medical bills is a noble goal, but the landscape is challenging. There is currently no standard in medical billing documents, and they are generally loaded with jargon and codes. The bills mirror the uncoordinated nature of healthcare, with many documents necessary to piece together the multitude of charges that result from a single care episode.
New and improved medical bills need to address all of the above issues, and at a minimum, include who the bill is from, a clear and itemized list of charges and how to pay. However, any redesigned bill must also address three of the most confusing issues for patients:
1. Why wasn’t this covered?
If there is one universal complaint about medical bills, it’s receiving them for unexpected charges. Surprise medical bills are a huge pain point for patients. Whether the charge ought to have been covered or the patient just thought it was, receiving complicated and expensive bills has a major impact on patient satisfaction.
A survey conducted for HHS found more than a fifth of patients expect all of their costs to be covered by insurance. Payers and providers have to work together to make it painstakingly clear what services are covered and which are not.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Bills need to educate patients about cost-sharing, explain how deductibles work and outline any additional charges that are associated with covered services.
2. Is this before or after insurance?
Medical bills often show top-line prices as well as “contracted rates” or “negotiated rates,” without explaining what any of those terms mean. Patients also receive billing documents from their provider and the insurer, often with inconsistencies between the two. This makes it really challenging for patients to know what they owe, what their insurer has paid, and whether any of the figures are accurate.
Ideally, a redesigned bill would include whether the claim has been submitted to insurance, along with all the relevant information about to which insurers it has been submitted, and member and group ID numbers. Providers already have this information, and should be able to share it on the bill. Patients would then be able to cross-reference those figures with the EOB they receive from their insurer.
3. How many bills am I going to get?
A redesigned approach to billing needs to address the disconnect between the revenue cycles of the provider and insurer.
Receiving multiple bills for the same care episode, sometimes with inconsistencies in the information, is confusing to patients, and it keeps them from paying right away or in full. The HHS research showed almost 40 percent said they don’t pay medical bills right away out of confusion. Some even wait for the bill to go to collections, believing the information will be more accurate after working its way through the revenue cycle. Making bills easier to understand also has financial implications for providers.
While it may not always be possible to provide an exact number of bills the patient can expect, a better bill would make clear that multiple providers from multiple organizations were involved in the care episode. These providers all send claims to the insurer, so compiling them into one bill or bill overview, similar to a credit card statement, that reflects the whole care episode would be a step toward better customer service for patients.
