Modern healthcare consumers want to avoid surprise medical costs and make better healthcare decisions. They also want to compare and contrast the best healthcare providers as they do for other services.
That's where patient cost estimate software comes in. Sleek, streamlined, and easy to use, patient cost estimate software gives patients transparency into service and item costs.
What Is Patient Cost Estimate Software?
Patient cost estimate software provides patients with accurate out-of-pocket cost estimates. Many healthcare providers and practitioners use patient cost estimation software to increase collections and improve the consumer experience. Depending on the vendor, patient cost estimate software may also:
- let you create and auto-send cost estimates through letter, text, and email with little to no staff intervention
- allow patients to pay upfront directly from their estimate
- give healthcare staff real-time notifications
Healthcare providers can also use patient cost estimate platforms to create user-centric experiences by automatically generating and sending cost estimates ahead of time, enabling digital payments and collection from estimates, real-time notifications, and much more.
Trends leading to patient cost estimates
Current healthcare developments have made patient price estimate software necessary for healthcare providers.
The No Surprises Act
First, as of January 1, 2022, the No Surprises Act (NoSA) began mandating that healthcare providers and insurance companies issue and send good faith estimates (GFEs) to self-paying and uninsured patients. GFEs are notifications that outline self-paying or uninsured consumers' expected charges for a scheduled or requested item or service. Each GFE should include primary items and services as well as the items and services reasonably expected to be provided. This also includes if the consumer will receive the items and services from another provider or facility.
While the No Surprises Act plans to penalize only providers and payers when they fail to provide good faith estimates (GFEs) to self-paying and uninsured patients, some physician groups now provide them to insured patients as well. Now that more patients must shoulder more of their medical payments, many want to know their responsibility upfront so they can plan. Some providers are meeting this desire. (The estimates specific for self-pay patients are isolated by the term “good faith estimates,” where those for insured patients are typically termed “patient pay estimates” or “patient cost estimates.”)
High-deductible health plans shift medical costs to patients
Beyond the No Surprises Act, however, are the changes that came to healthcare following the Affordable Care Act of 2010 which prompted insurers to compete on monthly premiums. To strike a balance between the lower premiums required by the ACA and the obligation to provide comprehensive coverage, insurers adopted high-deductible health plans (HDHPs) with higher deductibles. Offering HDHPs allowed insurers to maintain affordable premiums while still adhering to the essential health benefits mandated by the ACA.
Focused on lower monthly rates, consumers decided to accept higher deductibles. According to the 2023 Kaiser Family Foundation’s 2023 Employer Health Benefits Survey, enrollment in high deductible health plans has increased nearly 50 percent from 2013 to 2023. These higher deductibles leave them paying more upfront. In the perpetual battle for who will pay for healthcare, payers and employers then increased deductibles. Today’s average annual deductible for patients with employer-sponsored health insurance has increased 61 percent since 2012 to $1700.
Patients struggle to make medical payments
The payment burden shift toward patients has impacted healthcare system revenue. An extensive survey of more than 1,600 hospitals and more than 100,000 physicians nationally reveals high-dollar accounts receivable rising.
- the number of patients who owe more than $7,500 more than tripled from 5.2 percent of all accounts in 2018 to 17.7 percent in 2021
- patient balances higher than $14,000 almost quadrupled from 4.4 percent of all accounts in 2018 to 16.8 percent in 2021
- the collection rate for claims between $7,501 and $10,000 was just 17 percent
- the collection rate for claims between $5,000 and $7,501 was 32 percent
High-dollar, aging accounts aren’t the only threats to revenue, however. Another recent study reveals that 78 percent of providers cannot collect a $1,000+ balance within 30 days. The longer an account languishes, the less likely patients are to pay. Once a bill gets to over 120 days in accounts receivable, providers collect on average just 10 cents per dollar.
Patients are struggling
Healthcare organizations have more goals than revenue, however. Providers' prime directive is always to serve their patients, and at this time, healthcare costs are burdensome to patients.
Patient contributions and deductibles have increased to 11.6 percent of US median household income, up from 9.1 percent from 10 years ago. Given that the average family only has $20,000 in savings, healthcare's cut into their liquidity is substantial. According to the Kaiser Family Foundation, one-third of insured adults worry about paying their monthly health insurance premium, and nearly half worry about their ability to pay their deductible should a serious health issue arise.
These financial concerns can prevent patients from getting the care they need. A McKinsey report reveals that 34 percent of patients defer care due to financial concerns. A small 10-dollar increase in copay prompts a portion of patients to cancel appointments. Clearly, providers must delve into patient financial limitations and come up with reasonable strategies to continue providing needed care.
Patient cost estimate software benefits both patients and providers
Unfortunately, these healthcare trends can pit patients against providers. Part of the issue stems from the fact that, for decades, both parties have been trained to depend on payers to shoulder nearly all healthcare costs. Despite the No Surprises Act, patients remain surprised by their responsibility.
To remain financially viable and serve patients, physician groups and healthcare systems must face this issue head-on. The healthcare landscape has changed. Providing patient cost estimates upfront is the most straightforward way to help patients understand that this shift has occurred. Physicians and front desk staff can soften the blow by providing payment plans and financial assistance tools, reassuring patients that they will work with them.
While mandatory for self-pay patients, insured patients are indicating they want to know their obligations upfront. It gives them the freedom to shop for lower-priced alternatives and helps them plan and marshal financial support if need be.
In one recent US News and World Reports article, one father explains how after his son received a shocking diagnosis of leukemia, they immediately started down the chemotherapy path with their initial hospital. The $200,000 bill left them owing $40,000. The author explains that costs were never discussed and adds, “If we had known this high price before care, we would have compared prices at other facilities and chosen less expensive alternatives. Knowing actual prices would help protect us from overpriced treatments and allow us to choose care at fair market rates.”
Physician groups and front office staff need to know that, because patient cost estimate software benefits patients as much as practices, they shouldn’t hesitate to discuss payment upfront.
What patient estimation software can do
The right patient estimate software can help you eliminate surprise bills, generate and send cost estimates, and make it easier for patients to pay online anywhere, anytime, and on any device.
Patient estimation solutions' features vary depending on the vendor. However, most provide the following functions:
Automatically generate and send patient cost estimates ahead of service
Patient estimation software can automatically create and send patient cost estimates before service by mail, email, and text. A robust solution can send estimates largely without any staff intervention at a high level of accuracy. Once the parameters are triggered upon patient scheduling, the estimate is compiled and sent. Automation allows you to meet NoSA's strict timeframes for sending GFEs to uninsured and self-paying individuals.
Enable upfront digital payments and collection from estimates
Patients can digitally pay and make payment plan elections directly from their estimates, whether through your solution provider’s platform or an embedded link to your existing payment portal.
Integration with electronic health record (EHR) and practice management software
Managing and organizing patient records can be difficult, especially if you run a large practice with thousands of patients. Luckily, most patient estimation tools integrate with your practice's EHR and PM software. As a result, you can manage workflows, GFEs, patient cost estimates, patient files, and administrative tasks with just a few clicks of your mouse.
Patient estimate platforms can also deploy real-time notifications for cost estimates. You can use these alerts to notify patients about their out-of-pocket costs immediately, so they can determine whether your service fits their budget.
Eligibility and insurance verification
Lastly, patient estimate software can verify patients' insurance eligibility by instantly revealing patients' insurance statuses. If a patient is revealed to be self-paying or uninsured, you can immediately use your patient estimation tool to generate and send a GFE on the spot. The patient can then decide whether they want to proceed or choose another provider.
How patient cost estimation software benefits your organization
Patient cost estimation software can provide many benefits for your organization, including the ability to increase upfront revenue collected, reduce bad debt, and improve the patient experience. It can also help you stand out in your local market, comply with the NoSA, and improve staff productivity.
Increase Upfront Revenue Collected
First, patient cost estimation software can increase upfront revenue collected.
In a January 2022 PYMNTS report, 89 percent of patients surveyed believe that it's easy to pay upfront when they know their bill beforehand.
This finding was borne out at Florida's four-hospital healthcare system Health First. After determining that all patients–self-pay and insured–needed patient cost estimates, they adopted a “100 percent estimate, 100 percent ask” protocol. This shift increased upfront collections by 27 percent, helping the system reach 2.7 percent of net revenue in point-of-service collections compared to the industry benchmark of 0.7 percent. Similarly, California-based clinical lab testing company Counsyl increased revenue collected from patients by 63 percent after adopting a patient cost estimation tool. The software also helped Counsyl increase its Net Promoter Score (NPS) by 4 percent for customer satisfaction.
Reduce bad debt
Every dollar of patient payments you collect upfront keeps more of your revenue out of aging accounts and write-offs on the back end.
Improve patient experience
Patient cost estimate software eliminates surprise bills for self-pay patients, providing a superior patient experience. Physician groups that provide them to insured patients are also getting a positive response.
A study by Experian and PYMNTS found that patients who were not provided cost estimates ahead of time were less satisfied than patients who were provided estimates. Specifically, 78 percent of patients who did not receive an estimate were satisfied with their doctor, whereas 88 percent of patients who received an estimate said they were satisfied.
Stand out in your local market
Patient cost estimate tools are relatively new to the market. A January 2022 PYMNTS survey revealed that only 30 percent of patients had received a cost estimate ahead of services.
Therefore, patient cost estimate platforms can help you stand out in your local market. According to Deloitte, 60 percent of patients are more likely to choose a provider that provides prices compared to local providers who are not.
Get in Compliance With the No Surprises Act and Avoid Penalties
Since January 1, 2022, the NoSA has required insurance companies and healthcare providers to send GFEs to self-paying and uninsured patients. Eventually, this requirement may expand to include insured patients.
To comply with the NoSA, you must meet stringent deadlines. Specifically, you must provide an uninsured or self-paying individual with a GFE according to the following timeframes:
- When a primary service or item is scheduled at least 10 days before the service or item's furnishment, you must send the GFE within three days of the scheduled date
- When a primary item or service is scheduled at least three business days before the date the item or service is scheduled to be furnished, you must send the GFE within one business day of the scheduled date
- When an uninsured or self-pay individual requests a GFE, you must send the GFE within three business days of the requested date
You must also comply with a bevy of other requirements, including:
- Disclosure requirements: The NoSA requires you to prominently display comprehensive, clear, and easy-to-find information about the availability of FGEs for self-paying and uninsured individuals in your office, site, and wherever scheduling and questions about medical costs happen. You must also:
- Provide information about GFEs for self-paying and uninsured individuals when scheduling an item or service or when asked questions about medical costs
- Consider any discussion or inquiry about potential costs as GFE requests
- Provide information about GFE availability for self-paying or uninsured individuals in accessible formats and the language(s) spoken by the consumer(s) scheduling or considering items or services
- Content requirements: The NoSA requires GFEs to contain specific information, including:
- The patient's name and date of birth
- A description of the primary item or service
- The scheduled date of the primary item or service
- A list of the items and services reasonably expected to be furnished for the primary item or service
- Requirements for making changes: If you, a co-provider, or a co-facility anticipates or is told about changes to the scope of a previously-furnished GFE, you must give the self-paying or uninsured individual a new GFE within a business day. If changes in expected providers or facilities in a GFE happen less than one business day before the furnishment date, the replacement provider or facility must accept the GFE provided by the replaced provider or facility.
Meeting all of these requirements can be overwhelming, especially if you have a limited budget and staff. Luckily, a reliable patient cost estimate program can help you generate, send, and manage accurate GFEs on and ahead of time.
While enforcement of the No Surprises Act GFE was originally scheduled to start on Jan. 1, 2023, the HHS is postponing applying any penalties pending future rulemaking. The delay came after industry groups pushed back about getting GFEs, including co-provider and/or co-facility price estimates, to patients within the stated timeframes. The groups claim administrative burden and data exchange limitations will prevent them from complying.
Once this discretionary period ends, providers found out of compliance face monetary penalties of up to $10,000 per violation.
Improved productivity of staff
Last but not least, a patient cost estimate program can improve staff productivity by automating repetitive tasks and reducing the need to hire new staff. This is especially true if you're part of the 75 percent of providers still relying on manual collection. According to the most recent CAQH Index Report, every automatically verified eligibility takes 14 minutes less than every manually verified one. Saving hours every day leads to lower labor costs and even higher staff satisfaction, as tedious tasks are taken from their desk.
Cost of patient cost estimate software solutions
Most patient estimate software tools charge per patient. As such, the ultimate cost of a patient cost estimate solution depends on your overall patient volume — the larger your practice, the more you will have to pay.
The structure of your software may also influence the total cost. If your chosen software is standalone, you may not have to pay as much, but if your software comes as part of a suite, you may need to pay more, depending on what features you need.
For instance, your software may cost much less if it only consists of a standalone GFE generator. However, if it's part of a larger suite that includes contract analysis and revenue cycle tools, you will probably have to pay more.
Enable and streamline patient cost estimates with md clarity’s clarity flow software
Finding a suitable patient cost estimator can be challenging, especially if you've never used one before.
That's where MD Clarity's Clarity Flow comes in. Comprehensive and user-friendly, this patient cost estimation software helps healthcare providers comply with the NoSA by providing accurate GFEs to consumers. Specifically, you can use Clarity Flow to:
- Create, automate, and deliver patient cost estimates and GFEs via mail, text, and email, most often without staff intervention
- Collect upfront deposits from patients directly from online estimates
- Project accurate out-of-pocket costs
Ready to see how Clarity Flow can help you? Book a demo today.