HFMA issues updated patient bill payment guidelines amid pandemic, public pressure

• Updated industry billing guidance includes provisions to address pandemic-related patient financial challenges.
• Some provisions, such as the use of “pauses,” could bring technological challenges.
• Implementation tools are included in the guidance.

HFMA recently updated its best practices for providers to use when resolving outstanding medical bills, as patients struggle with increased financial challenges amid the COVID-19 pandemic.

Originally published in 2014, the voluntary best practices for the fair resolution of patients’ medical bills were designed to provide billing guidance to healthcare providers, their business affiliates and credit bureaus.

The 28-page update, jointly published with the Association for Credit and Collection Professionals (ACA International), was formulated by a task force of providers, consumer advocates and collection agencies.

Key provisions included:

• Emphasizing “pause points” before aggressive collection steps
• Ensuring hospital leadership is aware of billing and collection policies that are used
• Adding pandemic-related billing guidance
• Urging analysis of racial and ethnic disparities and implementation of mitigation steps

The updated industry guidance came in the face of increased financial challenges for patients and providers amid the pandemic. Although work on the update began before the pandemic, its release coincides with spikes in unemployment and uninsured rates.

“During COVID-19, many ACA members employed hardship programs to help consumers better understand their options for either pausing or resolving outstanding medical debt obligations, including by providing them detailed information about financial assistance programs that are available to them,” said Mark Neeb, CEO of ACA International. “The best practices reflect some of the steps ACA members have been taking and confirm their commitment to work with consumers to find a solution that works for them.”

A recent analysis of U.S. Census Bureau survey data found 3.3 million nonelderly adults lost employer-sponsored health insurance (ESI) over the summer during the historic spike in unemployment. Self-pay patients are usually most vulnerable to challenges related to healthcare affordability and bill paying. 

Even among those with ESI, which typically carries lower out-of-pocket costs, one-quarter had medical bill problems or debt in the past year, according to a survey conducted from January through June.

“It’s important that these practices be reassessed during the pandemic because so many people are struggling with maintaining insurance [and] paying all sorts of bills, including medical bills,” said Mark Rukavina, a project director for Community Catalyst and a member of the task force.

The update also followed a growing number of news reports expressing criticism of hospital bill-collecting practices, and government policy moves to highlight aggressive practices and lawsuits to collect patients’ unpaid bills. For instance, President Donald Trump issued an executive order Sept. 24 for HHS to update the Hospital Compare website within six months to detail the frequency at which hospitals pursue legal action against patients, among other measures.

Whether or not the executive order is implemented — given the looming presidential election — similar federal transparency requirements will likely emerge in the coming years, said Chad Mulvany, director of healthcare finance policy, strategy and development, for HFMA.

“You might want to know now what you’re doing, so you are aware and can make changes if you need to make changes,” Mulvany said. If it’s not public knowledge today, it’s very likely that it will be in the near future.”

How challenging will implementation be?

The guidelines generally are designed for hospitals and health systems to meet without the need for extensive investments, such as outside expertise, Mulvany said. That assurance was provided by the range of hospitals and health systems included in the 12-member task force, as well as from broader groups of providers that gave feedback when the proposals were formulated.

“It’s having the discipline and focus and consistently do these things that can be challenging,” Mulvany said. One tool that can help with communications is HFMA’s Patient Financial Communications adopter program.

A provision that may prove challenging for some is the encouragement of “pause points” before pursuing “extraordinary collection actions.” That is because hospitals increasingly have automated their billing and collection processes to improve organizational efficiency.

“We talked a lot about pause points and saying, ‘Hey, stop. Is this ready to go to that next level? Have we done everything we could possibly do to satisfy this or to get this resolved?’” said David Muhs, CFO of Henry County Health Center in Mount Pleasant, Iowa, and a member of the task force.

Performing analysis of racial and ethnic disparities in collection efforts, to identify differing effects, also may prove complex. That complexity stems from hospitals’ use of separate information systems to house patient financial information and demographic data. But such data integration eventually will prove possible as hospitals undertake ongoing information system upgrades, Mulvany said.

Also, providing patients with upfront estimates for planned procedures, which the guidelines describe as “a core part of the education and engagement process,” is still not done by many hospitals, Muhs said.

“Giving that information upfront eliminates a lot of the back-end issues that are potentially out there,” Muhs said.

How to implement the guidance

The report maps out the entire medical accounts receivable resolution process, from preservice to post-discharge, incorporating elements from HFMA’s Patient Financial Communications Best Practices and Patient Friendly Billing initiative. It details financial assistance policy communication requirements for not-for-profit hospitals. The task force recommends all hospitals meet those requirements, regardless of tax-exempt status.

A section on frequently asked questions addresses the basics of the account resolution process, how to work with account resolution business affiliates, steps to take when initiating certain collection actions and final disposition of unresolved accounts.

Appendices include a sample public health emergency financial assistance policy, relevant legal provisions, a glossary of terms and sample consent language.

As part of its effort to meet the guidelines, Henry County Health Center recently undertook an upgrade of its patient estimator tool.

“A lot of companies on patient estimation will just take your data and say, ‘Here’s what you could expect to pay,’ not what you will pay,” Muhs said. “And then, if we brought them in here and gave them a true estimate, there could have been a really big difference based on copay and deductible.”