Patient Responsibility: Information to consider

With rising healthcare prices and more people opting for high deductible health plans (HDHP), patient responsibility balances are accruing at higher rates. We know that medical debt not only increases stress for patients but also impacts the financial stability of providers.

Fortunately, with a bit of education on both sides of the billing agreement, you can help solve some of the most common issues. This guide will address the challenges of managing patient responsibility in medical billing and offer effective strategies to help improve your processes.

What is Patient Responsibility in Billing?

Patient responsibility is commonly described as the total amount a patient owes out of pocket. If the patient is insured, it may include copayments or coinsurance. For self-paying patients or those who haven’t met their deductible, patient responsibility for payment could equal 100 percent of total charges. A Medicare patient payment responsibility, once the deductible is met, is typically a coinsurance payment equal to 20 percent of the Medicare-approved amount.

Patients have some additional responsibilities. It’s the patient’s responsibility to:

• Provide the provider with the correct insurance information.
• Learn about the deductible, copayment, coinsurance, penalties, and coverage limitations they’re responsible for.
• Understand the insurance company’s policies regarding prior authorization, referrals, and out-of-network services.

Why are Patient Responsibility Balances Increasing?

Unexpected healthcare costs and high deductible health care plans, along with increasing copayments and coinsurance, all contribute to medical debt. For example, according to data from Kaiser Family Foundation, in 2022, the average single deductible was $1,992, while the average family deductible was $3,811.

In addition, some Americans may go without access to preventive care, which means these patients could show up sicker and require more costly care.

The Case for Transparent Pricing

Problems paying medical bills and the accumulation of medical debt are at the forefront of public policy. The primary goal of new price transparency laws is to make sure both the cost and quality of healthcare are easily understandable. Transparent pricing helps patients make smarter financial decisions. But transparency in healthcare isn’t just about price. It’s also about helping patients understand the quality of care you provide.

Yet another benefit of transparency is that it facilitates trust between patients and providers. Patients who trust their provider may be more likely to follow health advice and stick with a treatment plan, which may improve outcomes.

How To Help Patients with Their Financial Responsibilities for Care

Estimate Patient Responsibility for Patients with Insurance

Research shows that patients delay paying their medical bills for many reasons. In a 2020 Waystar survey:

• 51 percent of respondents were financially unable to pay.
• 37 percent thought their insurance would cover it.
• 19 percent weren’t sure how much money they owed.
• 18 percent disputed charges.
• 16 percent forgot.
• 13 percent didn’t know when the payment was due.

Learning how to calculate patient responsibility and providing information about it up front is one of the keys to receiving prompt payment and avoiding patient collections. Here are a few best practices to consider.

1. Use pre-verification to help the patient and your office understand the patient’s insurance coverage, financial responsibility, and reimbursement before you provide care.
2. Streamline the research process by using a web-based patient responsibility tool.
3. After you verify benefits, go over coverage, financial responsibility, and exact payment expectations with the patient.
4. Ensure the patient’s privacy before you discuss financial and protected health information.
5. Avoid jargon. Your patient probably doesn’t speak “code” — at least not fluently.
6. Use non-judgmental and empathetic language to reduce feelings of embarrassment.
7. Consider following a script to help you stay on topic and ensure you hit all the important points.
8. Provide the patient with a personalized estimation of benefits (EOB) statement that also includes your financial and payment policies.
9. Keep communication lines open by encouraging patients to reach out with further questions.

Providing a high level of financial clarity allows you to connect with patients on a personal level while empowering patients in their healthcare decisions.

Focus on Patient Education

While not directly related to patient responsibility, researchers have linked patient education to better patient outcomes and lower healthcare costs. Another benefit of patient education is that it connects cost to value. People naturally prioritize their values, or the things they find most important. The term “value-based care” isn’t just a Medicare buzzword. Just as Medicare rewards quality of care and outcomes, so too do patients.

Help the Uninsured Understand Patient Responsibility

Patient financial responsibility and healthcare costs are barriers to care for most uninsured patients. When patients lose access to health insurance, they often miss out on preventive care and may be more likely to wait until they are sicker to seek care. Sicker patients have higher health and medical bills.

It’s easy to offer a price quote when there is no insurance to verify, but does this step alone serve your patient’s needs? Going the extra mile for a patient with no insurance may have more benefits than you realize. If nothing else, you could build trust and goodwill. Best case, you’ll end up with a highly engaged patient.

Here are three strategies to consider for helping uninsured patients and those with high deductible health plans meet their patient responsibility.

• Offer a cash discount. Determine what it’s worth to get payment in full versus potentially dealing with expensive and time-consuming patient collections later.
• Search benefit discovery databases. The software may flag the patient as a potential candidate for Medicare, Medicaid, or other low-cost commercially available insurance. Surprisingly, some patients have insurance policies they’ve forgotten about, and insurance discovery solutions may help you locate them.
• Refer to private charity networks. In the United States, more than 1,400 charity clinics serve low-income families, including families who are uninsured. Fees at a charity hospital are flexible based on the patient’s income.

Make Paying for Treatment Easier

Patient portals with intuitive payment systems can help streamline the patient experience and lower administrative costs. A patient portal should allow patients to update insurance information and payment methods. Patients can begin the pre-verification process online when it is convenient, and then you can follow up with them during business hours. Plus, communicating through the portal may be more private and secure than other options.

Offer Financing Options for Patient Responsibility

Patients address barriers to care in different but predictable ways. According to a Healthcare.com survey, 60 percent of respondents said they had received care they couldn’t afford, knowing it would add to the medical bills they already owed. Some patients who were unable to pay avoided the care they needed until they experienced catastrophic illness.

Patients are looking for ways to manage the cost of care, and payment plans are a great option. Financing patient responsibility payments allows patients to pay large bills over time, improving their chances of paying in full and getting the care they need.

But in-house financing can be tricky. It carries risk for the provider. Without a financing partner, you could run afoul of state and local lending regulations or end up paying a collection agency to recover pennies on the dollar.

Patient financing can help patients pay their medical bills over time. Approved accounts may allow the patient to make an immediate payment and may be applied to any part of patient responsibility. Short-term and long-term financing options can help patients finance the health services they need and providers deliver immediate care.

Final Thoughts: Addressing Patient Responsibility

Healthcare costs that outweigh a patient’s budget and the increased use of HDHPs are just two reasons more patients carry balances. The good news is, by implementing some of the strategies in this article, you may have a better shot at helping your patients manage their out-of-pocket costs.

It may not be comfortable to talk about money with patients, but it doesn’t have to be difficult. Following a script can help you better communicate financial responsibility. And you may be able to improve patient satisfaction by offering on-the-spot solutions such as patient financing.

About the Author

Pamela Cagle

Pamela Cagle is a freelance writer based in Birmingham, Alabama. She leverages her background in healthcare and patient education to create helpful content that is informative, meaningful, and easy to understand.

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