Module 4: Patient Financial Counseling

Introduction

Does this scenario seem familiar?

Susan is helping Mrs. Turner check in for her appointment with Dr. Ramirez.

"Mrs. Turner," Susan says, "I see that you have a $40 copay today, and because you haven’t yet met your deductible, we’ll also need to collect $200 up front for today’s allergy tests. Then we’ll bill you for the rest."

Mrs. Turner’s eyes widen as she gasps, "$240? Today? But I can’t afford that--I have barely enough in my checking account to cover groceries this week! I’m on a fixed income. I thought I would just have to pay my copay today."

Susan looks uncomfortable, but she explains again that because Mrs. Turner hasn’t met her plan’s deductible yet, she’ll need to pay $200 on top of her copay today.

Mrs. Turner is so upset, she’s nearly in tears. "I waited weeks for this appointment, but I can’t pay that today, so I guess I’ll just have to cancel."

Has a scene like this ever happened in your practice? Or perhaps you’ve dealt with angry patients who are shocked by their bills after a procedure. Or maybe you’ve worked with patients who find themselves unable to follow their care plans because they can’t afford certain medications. Unfortunately, with the many types of insurance plans available today, the costs of treatment are more confusing than ever for patients, and this confusion causes a number of problems for allergy practices.

To avoid situations like the one between Susan and Mrs. Turner, or at least provide better resolutions to them, it’s crucial to implement effective patient financial counseling practices. When practices are transparent about patient costs, we can provide options for struggling patients and minimize billing surprises.

In this module, we will...

  • Discuss why patients today are confused by their health coverage, and explore the problems this causes for both patients and practices.
  • Show how providing cost transparency to patients can resolve many of these problems.
  • Explain when a good faith estimate is required as a provision of the No Surprises Act.
  • Review the steps practices can take to provide cost transparency, including:
    • Preregistering patients when scheduling appointments.
    • Verifying insurance benefits in advance.
    • Providing accurate cost estimates to patients.
    • Offering options if a recommended treatment is not affordable for the patient.
    • Designating a patient financial counselor for patient billing questions.
 

I Owe How Much?!
What Confusion Costs Patients and Practices

Patients are coming into our practices with an ever-increasing array of insurance plan types: PPOs, EPOs, HMOs, high-deductible health plans (HDHPs), point-of-service (POS) plans, and so on. And the major insurance brands (Aetna, Blue Cross Blue Shield, Cigna, Kaiser, United, and more) each offer their own take on these plan types, with different levels of coverage and cost-sharing.

It’s no surprise that this insurance alphabet soup results in confusion for patients. Here are just a few of the questions many patients have about their insurance plan:

  • What does it cover?
  • Does it have a deductible? How much?
  • How does my deductible work? Does my plan cover any costs before I meet the deductible?
  • How does coinsurance work? What do I have to pay after meeting my deductible?
  • Which doctors are in-network for my plan?
  • Do I have any coverage with out-of-network doctors?
  • Do I need to get a referral or prior authorization for certain services?
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As the insurance landscape becomes more complex, patients are increasingly looking to their doctors to get answers to these questions. In a 2016 survey by the Physicians Foundation1, almost half of respondents said they rely on their physician to understand what their insurance does and doesn’t cover. A 2022 survey by PhRMA of more than 5,000 Americans found that nearly 40% of insured Americans struggle to understand what their health insurance covers.

It might be tempting to urge patients to get help from their insurance companies rather than their doctors when it comes to understanding their coverage. But we can’t afford to turn a blind eye to this problem because practices bear the brunt of related billing and collections issues. For example, patients with high-deductible health plans or catastrophic coverage only are responsible for a greater portion of their health care costs, so practices have to focus their collection efforts on patients. But patients are reluctant to pay their bills when they don’t understand them. Moreover, if patients aren’t able to pay their bills, the practice loses revenue.

Patient confusion over insurance isn’t just hurting pocketbooks, either--it’s also hurting patients’ health. Patients are less likely to stick with a treatment plan they can’t afford, leading to poor outcomes. A 2023 poll by KFF Health Tracking showed about three in ten adults report not taking their medicines as prescribed at some point during the past year because of cost. And one in four adults have skipped or postponed needed health care in the past 12 months due to cost. When it comes to their health, patients have to make tough choices between what they need and what they can afford.

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While we can’t change the insurance landscape or develop new low-cost treatments overnight, we can help our patients--and our practices--by taking on a larger role in helping patients understand their health insurance coverage and the costs of their care. Providing cost transparency can...

  • Strengthen patient satisfaction with the practice.
  • Improve patient adherence to a treatment plan.
  • Increase your odds of collecting patient balances in a timely fashion.

Additionally, in some cases medical practices are required by law to provide good faith estimates (GFEs) to patients. A GFE is an estimate of the patient's bill for medical items and services. The No Surprises Act, which went into effect in 2022, requires practices to provide GFEs to all uninsured and self-pay patients. GFEs are required for these patients if: 1) the patient requests a GFE or 2) when the patient schedules health care services 3 days in advance.

Now that you understand why patient financial counseling is so important, let’s explore how to do it in five steps:

  1. Preregister all patients when scheduling appointments--and identify uninsured and self-pay patients who must receive good faith estimates.
  2. Verify insurance benefits prior to the patient’s visit.
  3. Provide an accurate estimate of a patient’s out-of-pocket costs up front.
  4. Offer options if a patient cannot afford the recommended treatment plan.
  5. Designate a patient financial counselor for patient billing questions.

Step 1: Preregister all patients when scheduling appointments.

Preregistering patients when they call to schedule an appointment is a good idea for lots of reasons, but especially because it can prevent sticky situations like the one you saw between Susan and Mrs. Turner in the introduction to this module. Preregistration is simple and effective. Staff members need to know exactly what demographic and insurance information to collect so that they can give patients accurate information about insurance coverage, deductibles, and their financial responsibilities.

The information staff should collect from patients during preregistration includes the following:

  • Patient name
  • Address
  • Phone numbers (home, work, mobile)
  • Date of birth
  • Primary insurance information
    • Company
    • Plan name
    • Address for filing claims
    • Phone number
    • Subscriber name
    • Patient’s relationship to subscriber
    • ID number
    • Group number
  • Secondary insurance information, if any
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Staff should collect as much information as possible so that you’ll be able to verify the patient’s benefits in advance, but be aware that many patients won’t know specifics like their deductible, specialist copay, or coinsurance. You should be able to get these details upon verifying the patient’s benefits with their insurance company.

This is also the time to identify uninsured and self-pay patients. Remember, you are now required to provide these patients with good faith estimates if they request one or if their appointment is 3 or more days out.

Preregistration is also the time to make the practice’s financial policy crystal-clear to patients so there are no surprises on the appointment day. Your practice should have a written financial policy in which you specify what costs patients are responsible for at the time of their appointment, as well as how you’ll bill insurance and collect balances due. 

With more patients subscribing to HDHPs, many practices have updated their financial policies to indicate they’ll collect deductibles on the day of the appointment, rather than billing for them afterward. And some practices have adopted a credit card on file policy.2 These types of policies might be unfamiliar to some patients, so it’s important to mention them during scheduling. You should also post the policy on your website so you can refer patients to it if they have questions. Click to download a sample financial policy.

Train staff members to explain the financial policy to new patients and to remind existing patients of the details. For example, if your practice collects all copays and deductibles at check-in, scheduling staff should remind existing patients of this when they call to make an appointment. When patients know what to expect, it’s far less likely that they’ll come unprepared to pay or even have to cancel on the day of their visit.

How does your office staff inform new patients about insurance and costs?

Anna RohrBusiness Office ManagerAsthma & Allergy Associates, Colorado Springs, Colorado

Step 2: Verify insurance benefits prior to the patient’s visit.

Once you have a patient’s insurance information, you can start the process of confirming their coverage before they visit the office. Staff should confirm the following details:

  • Eligibility
  • Benefits (for skin testing, allergy shots, and other specific services)
  • Copay
  • Coinsurance
  • Deductibles
  • Effective date
  • Referral requirements

There are a few different ways staff can do this. Most practice management systems have this capability; with some EHRs, you can see the high deductible when booking an appointment. There are also stand-alone systems you can use, and if neither of those options is available, you can get this information through individual payer websites.

Have staff record what they find out about a patient’s insurance coverage using a form like this downloadable sample insurance verification form.

Once you’ve confirmed a patient’s coverage, your practice will be able to determine the patient’s financial responsibility for the upcoming visit.

How does your office staff inform new patients about insurance and costs?

Alicia WilkersonLead Patient Services RepresentativeAsthma & Allergy Associates, Colorado Springs, Colorado

Step 3: Provide an accurate estimate of a patient’s out-of-pocket costs up front.

In most transactions, consumers expect to know their costs before they make a purchase. When buying a lawn mower or hiring a landscaping service, for example, people can shop around, compare prices, and look for the best deals on what they need. But the cost transparency consumers expect from retailers and service businesses is glaringly absent from health care. While there are many differences between health care and other consumer goods, we can help patients estimate their out-of-pocket costs in advance for most services so that they’re not shocked by unexpected bills after their visit.

Providing cost estimates to patients in advance requires a little more work up front, but ultimately, it’s good for business. When patients know what costs to expect, they’re more prepared to pay their bills. In a 2021 survey by Experian Health, eight in ten health care providers believed price transparency correlates with patients being more likely to pay bills on time. What’s more, patients will probably have a more positive view of your practice when you’re transparent with them about costs. This means they’ll be more likely to recommend you to friends and write favorable social media reviews.

So when should you provide estimates for out-of-pocket costs? Ideally, provide an estimate by phone or portal a few days before the appointment. If that’s not possible due to scheduling or staff limitations, provide an estimate at registration.

Also, if a good faith estimate is required, you must provide the GFE according to the following timeline: 

  • If the patient schedules care 3-9 business days in advance, you must provide the estimate within 1 business day. 
  • If the patient schedules care 10 or more business days in advance, you must provide the estimate within 3 business days.

In particular, you’ll want to provide patients with estimates for items such as skin testing or allergy shots. Many insurance plans only partially pay for these services, so patients can be left with a big (sometimes unexpected) balance. Communicating costs to the patient in advance will eliminate surprises. For example, at one large practice with 18 doctors, staff confirm all patient benefits in advance and then call the patient prior to the appointment to discuss costs. They also do a consultation before skin testing so that patients can decide not to be tested if cost is an issue. Doing this in advance prevents a large number of no-shows or last-minute cancellations by new patients.

Download this patient payment estimate worksheet to help you break down costs and make a patient’s financial responsibilities easy to understand.

A Note on Estimates

When giving patients an estimate of their expected costs, it’s important to specify that estimates are not always correct. Let patients know that you’ve done your best to confirm their benefits with their insurance company, but there are times when the information you receive is incorrect, and the estimate may not be completely accurate.

You can also empower patients to talk to their insurance companies about treatment plans you’re considering. Often, patients call their insurance companies with questions about costs for certain treatments, but they hit dead ends when they’re asked for specific billing codes. According to Kevin McGrath, MD, FACAAI, ACAAI Practice Management Committee vice-chair, "When we recommend allergy immunotherapy, we give the patient a 4-page explanation of how shots are done and include the billing codes and questions to ask regarding deductibles, copays, and limits. We give them the correct questions to ask their insurance carriers regarding coverage unless we have prior knowledge (i.e. Medicare or Medicaid). Then there are no surprises. We also have them sign a consent to mix and bill their first extracts when starting shots."

Finally, this is a good time to inform patients about payment options via the patient portal or your practice website. Some practices even have text to pay options! (Text technology is also available to remind patients about open balances prior to appointments.) Make sure your patients are aware of all payment options.

As partners in our patients’ care, we should always strive to keep them in the loop about their costs so that they’ll be able to complete their treatment plans and make progress on the road toward better health.

How do you handle questions or issues about deductibles or copayments?

Alicia WilkersonLead Patient Services RepresentativeAsthma & Allergy Associates, Colorado Springs, Colorado

Step 4: Offer options if a patient cannot afford the recommended treatment plan.

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In a perfect world, every patient would be able to afford the best treatment for his or her condition. But as those of us who work in physicians’ practices know, cost is an issue for the majority of patients, even those with good insurance coverage.

This is why it’s important for providers to talk openly with patients about the costs of different treatment options in order to agree on one that’s both affordable and effective.

Remember those statistics from the Physicians Foundation survey we talked about earlier in the module? A quarter of U.S. adults have skipped a medical test, treatment, or follow-up or avoided a doctor visit in the past year because of cost. And nearly 1 in 5 has skipped doses of medicine, while more than a quarter have avoided filling a prescription. When patients can’t pay for their treatments, they don’t follow their treatment plans, and their health suffers.

So what can we do? Here are two options:

  1. Offer a payment plan if this is available in your practice. You can split balances up over four to six months to make them easier for patients to pay. Some patients may ask for even longer terms, which you can consider on a case-by-case basis. The key is to keep lines of communication open with patients and make sure they know you’ll work with them on payments if necessary.

    Do you offer payment plans to your patients?

    Anna RohrBusiness Office ManagerAsthma & Allergy Associates, Colorado Springs, Colorado

  2. Review the plan of care. Are there more affordable alternatives to the recommended treatment plan? Candid conversations between physicians and patients about costs will lead to shared decision-making and a realistic plan of care your patient can afford. While it can sometimes be uncomfortable for physicians to talk to patients about costs of care, these are necessary conversations to have so that patients get the care they need.

Step 5: Designate a patient financial counselor for patient billing questions.

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As medical insurance and billing have become more complicated in recent years, many offices have hired or trained a dedicated patient financial counselor (PFC) to answer patients’ questions about their bills. PFCs should have not only billing expertise, but also impeccable customer service skills. They must be respectful and empathetic as well as knowledgeable.

Think back to the situation between Susan and Mrs. Turner at the beginning of this module. It was clear that Susan was caught off-guard by Mrs. Turner’s emotional response to learning her out-of-pocket costs for the appointment. While the situation could have been avoided if Mrs. Turner had received an estimate of costs in advance, there’s no way to avoid every uncomfortable interaction with patients about costs. But having an empathetic, sensitive PFC to call on can make smoothing over difficult situations much easier.

Imagine if, instead of not knowing what to say, Susan had been able to respond to Mrs. Turner like this: "I’m so sorry we didn’t make your costs clear when you scheduled the appointment. Would you like to talk to Amanda, our patient financial counselor, about some payment options? We really don’t want you to miss your appointment today, and I’m sure we can find a way to work this out."

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While a PFC should be able to communicate with empathy and respect in any situation, it’s also helpful to provide scripts for handling delicate situations. Role-playing with other staff members and hearing feedback can help PFCs sharpen their skills. Here are some basic tips for staff who counsel patients on financial issues:

  • Always discuss financial issues with patients in a private area.
  • Have the patient’s information in front of you so that you can clearly assess the situation.
  • Be prepared to offer possible solutions to the patient’s issues.
  • Maintain a compassionate tone. If the patient becomes upset, offer to reschedule or continue the conversation by phone.

Some PFCs even assume the role of liaison between patients and insurance providers, health care providers and facilities, or government agencies. While this isn’t something all PFCs are able to do, it can help practices resolve billing problems faster, and patients appreciate having a knowledgeable advocate in their corner.

Let’s Review

We’ve talked about several ways we can provide better cost transparency for patients. Which of the following activities should practices implement to improve cost transparency?
Connect the patient with a patient financial counselor (PFC) to answer their billing questions.
Provide an accurate estimate of out-of-pocket costs prior to an appointment.
Gather demographic and insurance information during preregistration.
Offer the patient a payment plan or a more affordable treatment plan if payment is an issue.
Verify a patient’s benefits before an appointment.
All of the above.

 

Conclusion

In this module, you have...

  1. Learned why patients today are confused by their health coverage, and explored the problems this causes for both patients and practices.
  2. Seen how providing cost transparency to patients can resolve many of these problems.
  3. Learned when good faith estimates are required.
  4. Reviewed the steps practices can take to provide cost transparency, including:
    • Preregistering patients when scheduling appointments – and identifying uninsured and self-insured patients who must receive a good faith estimate.
    • Verifying insurance benefits in advance.
    • Providing accurate cost estimates to patients.
    • Offering options if a recommended treatment is not affordable for the patient.
    • Designating a patient financial counselor (PFC) for patient billing questions.

Transparent communication with patients about financial obligations can improve the entire clinical visit for patients, making it more likely that they’ll stick with their treatment plan, pay their bills, and talk positively about the practice with others. While it might take a little more work to verify patients’ benefits and give them out-of-pocket cost estimates in advance, you’ll save your staff from uncomfortable encounters like the one between Susan and Mrs. Turner. You’ll also see better cash flow in your practice. Not only will your patients be happier and healthier, but so will your practice and staff!

Sources (provided by ACAAI):
Footnotes

1 Physicians Foundation
2 View the College’s Allergy Office Essentials module on Credit card on file for details on how to implement this program.