A Patient Safety Approach to Medical Billing (16 mins)

Have you ever been asked to sign that you'll pay whatever is "leftover" from your bill -- without knowing the total? This episode uses a risk approach to discuss the expectation that patients must promise to pay to an infinite and undefinable cost, and shares solutions that fit a patient safety model using clear communication and patient-empowered decision-making.
Key Points:
-The Blank Check
-Transparency Laws in Practice
-Patient-Driven Billing

Transcript

The other day, I attempted to ship a gift to my niece. She is a fan of tea, and I had found an adorable four-cup teapot that I knew she would just love. The shipping office said me they would not be able to tell me the cost until they sent the package, so I gave them a blank check and waited for the bill to arrive. 

Five months later, I received a bill for $22,635! Obviously, I called the shipping office for an explanation. They said it required a team of silkworms to weave a silk-sailed ship to cross a major river. Contracting the silk-worm vendor, together with additional fees for waterproofing my package, explained the outrageous shipping costs.

Obviously, this is satire, but that is exactly how patients feel when they are asked to sign a contract with no quoted price. In fact, healthcare providers cannot quote a final price until months after the service is delivered. And that’s true even if you don’t have insurance, because they still have months for coding and billing even when there are no contracts with payors to consider.

I cannot think of any other industry where asking for a blank check is the norm.

Recently, I was asked to sign that I would take responsibility for whatever fees were accrued for a specialized set of labs, but the clinic could not tell me what it would cost. I said no because I am not insanely wealthy, and I cannot promise to absorb an infinite cost.

Despite transparency laws, patients still can’t get a quote that anyone will stand by. When I tried to get a bid on a family member’s procedure from the price transparency site of a hospital, it was only available in JSON files – for those of you who are not professional developers, that’s a coding script for text files that can be opened in a text reader like Notepad, but almost no one knows what to do when the message comes up to select what program you want to use open it. That warning makes it seem like there’s not an option to view the file, making it virtually inaccessible to common patients. 

When I did finally figure out how to open the file, it was all scripting language with ICD-10 codes. So there was an alpha-numeric code like W44.D9XA. That’s the code for the initial time a magnetic metal object enters into or through a natural orifice. Not to be confused with W44.D9XD, which is when it happens again, or W44.D9XS, which is when it just keeps happening. And I can only assume that all of these codes exist because it’s happened to someone out there, but I digress. But I still could not see a price per se.

Again thwarted in my attempts at getting a price quote, I opened a ticket with the billing office to request one. They closed my ticket without comment. And what recourse did I, as a patient, have? But all of this subterfuge in billing does fulfill the letter of the law when it comes to the requirements for making pricing transparent in a “machine-readable format.” So, in addition to my nursing degree, I have had to learn computer coding as well as medical coding because, well, that’s how healthcare billing transparency works.

But wait, there’s more! Sometimes, the final explanation of the surprise costs sound as ludicrous as my shipping story. Did anyone else get billed extra “building fees” just for stepping into a healthcare office during COVID? What about $700 clinic visits? Or billing a consultation as though it were an outpatient surgery because you met in an office building that also houses a transfusion clinic?

That is why so many people were willing to try crazy ideas like Walmart clinics and AI and strangers on telehealth who knew nothing of their history. I’ve talked before about why these innovations often failed, and for the most part, it boils down to a business plan where the investors wanted something for nothing. You pay a fee, but we’re just going to send you somewhere else for care – unless, of course, you don’t actually need any care. In that case, we’re happy to take care of you.

Meanwhile, healthcare service providers are going bankrupt due to lack of funding as they scrimp and save under new Medicare billing rules. Hospitals and providers are running under tight margins with increased costs for staffing, supplies, and a heavy regulatory burden. All the bells and whistles are gone, and they are still being asked to maintain 10-minute clinic appointments and 45-min Emergency Room turnaround times.

And patients are going bankrupt from medical bills.

One way or another, we need to start thinking outside the box about these billing issues because patients can’t afford to write blank checks and providers can’t survive on selling unpaid bills to collection agencies.

I’ve been thinking a lot about patient safety these days, and it occurs to me that these financial issues are a huge safety risk for our patients. How many patients avoid early medical treatment because their afraid of the costs? How many patients do not have access to medical treatment at all because their local clinic or hospital went bankrupt and shut down. 

It’s pretty clear that regulatory intervention is not going to solve the problem, it’s the obscure Medicare language, CMS required medical coding, and insurance regulations that have exacerbated the billing issues. Every bill looks different depending on the patient’s coverage and various contractual agreements. While the patient must sign that they will pay whatever is left over, they won’t know that amount until the dust settles. Looking at Britain and Canada’s models of single-payer systems doesn’t look any better on this front. Everyone has heard of patients in these systems waiting months for treatments or being denied care altogether, as their respective governments attempt to avoid bankruptcy while navigating high medical costs. None of that is good for patient safety. Even though canceling debt and providing fully funded care soundsgood, the reality is that it is just a shuffling of the same debt. Instead of paying for private bureaucracy, we would balloon public bureaucracy (even more than it already is) and each individual carries that debt in the form of national debt, taxes, and Medicare fees. One way or another, those expenses must be paid and adding bureaucracy does the opposite of cutting costs.

It's kind of like the restaurants that advertise that they are under new management. Anyone who was unaware of the problems will forever look at that establishment with suspicion, and everyone who had a bad experience is going to wonder if changing heads will really solve all the issues they experienced. Changing management in healthcare isn’t going to solve the way we have divorced patient care from patients.

And there are other large-scale solutions. One hospital organization created a charitable foundation with discounts built into the fee structure. So the hospitals offer care at a discounted rate to people who prove that they cannot pay, and the charitable foundation offers at least the collections rate of debt recovery. This reduces cost from debt recovery and collection, and shifts it to the private non-profit sector, all while protecting patients from the stress of bills they cannot afford.

What would it look like if we approached healthcare billing with a risk management / patient safety approach? In risk management, the whole goal is to mitigate the cost of losses and ensure that those losses are covered. Patient safety, likewise, is devoted to reducing the severity and incidence of patient harm because those incidents are so costly.

One step would be to use the Joint Commission model of identifying especially high-risk moments. Without knowing those high-risk moments, we wouldn’t know where to begin. But we do know some of the most common reasons for bankruptcy due to medical bills. When it comes to financial risk, there are certain healthcare expenditures that would count as especially high-risk: Things like surgery, chemotherapy, and labor and delivery are especially costly. Of course, poor quality care is costly too, as the risk to quality of life and cost to personal productivity from being out of work can put additional pressure on the financial squeeze.

That said, one solution would be to provide all patients with an up-front cash price so that they are aware of the worst-case scenario on a per item basis, realizing of course that things can escalate depending on how things go in a moment of crisis, for example. It may not be possible to predict someone’s blood pressure dropping in surgery, but you could certainly say how much a normal surgery would cost and provide an estimate on the five most common complications. Since those price increases are based on complications that are often predictable, I believe this should be part of the legal consent. I don’t believe a patient should sign surgical consent paperwork without understanding the cost of the surgery and knowledge of what the most common complications might cost. In the world of elective surgery, in particular, it’s important to put this decision in the hands of the patient because only the patient can decide if the cost is worth it, and believe me, most patients have no clue. They have a sort of vague foreboding, but their wife told them they should take care of themselves, and they want to be able to provide for their families as long as they can, so they say yes. That’s why it is not the job of a bureaucrat or a white coat or the buddy you play basketball with to decide whether or not to cut open your body and your wallet at the same time. It can only be your choice. 

To drain your bank account and then claim that you consented to it is a particularly vicious form of harm particularly if it hits when you are sick and trying to recover.

Again, this is not a good guys vs bad guys thing here – anyone working in healthcare would want the same. We want to know what it will cost and how long it will hurt just like everyone else. We don’t want our parents to get talked into some cosmetic procedure that paralyzes their leg and runs up their credit card debt. These are things we can agree on. Of course there are some fraudulent scams out there that are fleecing patients. But that’s not what we’re talking about here. We’re talking about genuine, compassionate patient care. Anyone with a functioning moral muscle would agree that clearly defined billing should be a part of pre-operative discussions. We do so many thousands of surgeries in the United States every day – you can’t tell me that a predictive forecast of the lower and higher confidence ranges would be impossible to run for a particular procedure or diagnosis.

And since those costs can be anticipated and tracked, it would also be lovely if participation in a group plan meant that members could be given the contract price for non-covered procedures. Normally, if something isn’t covered, you pay a one-size-fits-all cash price. But what if providers rewarded their health plan customers with a discount rate on those non-covered services? Then, if you’ve got Medicare, you could get the Medicare price even if your elective operation is not covered, and that could be quoted in writing before the service was delivered. Because everyone knows that the appeal process is a pain in the you-know-what, and almost impossible to succeed in. If I had a discounted rate, I might be inclined to just pay cash for that service rather than spend the next six months begging my doctor to write letters that are read by AI. Either way, it would give patients a choice. If it really matters to you, the patient, you would have options. 

Really, the loss of control is a big part of the harm that comes from outrageous billing practices. No one should feel like they are one injury away from having their lives destroyed by debt.

And it is a big deal. Many divorce hearings cite financial burdens as a contributing factor. A lot of heart attacks are prefaced by stress about debt. Housing instability and food insecurity increase with financial instability. The whole idea behind patient safety is that the treatment should result in improvements, or at least stabilization of a decline. Most people would not consent to going through painful procedures so that they could feel worse than they did before. When surprise bills for tens of thousands of dollars show up, a worse condition is actually possible. This is where harm prevention practices must be used. Educate, communicate, and set clear expectations for the patient’s financial obligations. Treat billing errors – or adjustments as we like to call them – with the same concern as medical errors.

I know it’s a big ask. I know that nothing in our system is set up this way. But if we put the cash price first, and then went through the billing process as we know it, we could really get somewhere. Regardless, it’s impossible to improve a structure when it sits on shifting sand. We will never improve billing without transparency, and we will never become transparent when it depends on the service providers, the government, or anyone but the patient to make the decision. It's time for the patient's bill of rights to include the patient's bill. The only way to ensure transparency and improved outcomes and a reduction in unnecessary or harmful interventions is to empower patients to make their own decisions about their budgets as well as their health.