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One Healthcare System, Many State Laws: Standardizing Billing and Collections Practices to Ease Compliance Challenges

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One Healthcare System, Many State Laws: Standardizing Billing and Collections Practices to Ease Compliance Challenges

In an ever-changing healthcare industry, it’s easy for hospitals and healthcare systems to feel overwhelmed by the barrage of new complexities facing them. Along with continuing to manage the shift to a value-based system of care, c-suite executives and revenue cycle managers are also navigating an uncertain regulatory environment.

For health systems with hospitals operating across multiple states, building efficient and effective solutions around these challenges can prove especially demanding. But in addition to ensuring compliance with federal regulations—like the Telephone Consumer Protection Act (TCPA) or the Fair Debt Collection Practices Act (FDCPA)—multi-state healthcare providers must also contend with other consumer protections that vary by state and even by municipality.

Though all states have laws that address common consumer protection concerns, there are additional state-specific and potentially municipality-specific laws surrounding medical billing. So to ensure compliance, a provider must have a system in place that can accurately make sense of and tackle the variations in each state and local government’s laws.

But that’s easier said than done, especially since one state may have widely different billing or conduct requirements than another. For instance, some states like Florida, New York and California have passed comprehensive laws that prevent providers from balance billing certain patients (or billing the difference between the total charge and the amount covered by insurance).

Similarly, some states may require a provider to alert patients that they might receive a bill from a different out-of-network provider involved in their care before receiving non-emergency services.  Other states or municipalities may differ on what information needs to be contained in patient billing statements, and when or how a patient may be contacted.  Local municipality laws may differ from the regulations established by the state government in the state in which the municipality resides.

Considering the current regulatory landscape, it’s also likely that laws governing healthcare compliance and revenue cycle will continue to grow in complexity, becoming more of a regulatory minefield for providers operating across multiple states.

Deviations in laws from state to state and municipality to municipality seriously complicate the role of revenue cycle leaders and managers, especially when considering the other profound changes that have taken place in recent years. Consider that high-deductible health plans were almost nonexistent a decade ago, but in 2017, 43% of Americans were insured with a high-deductible plan up from 14% in 2007, according to the Centers for Disease Control and Prevention.

Patient financial responsibility has grown too; in fact, an industry study found that the total hospital revenue attributable to patient financial responsibility after insurance has increased drastically within a five year span. Similarly, patient payment is on the rise, with hospitals seeing a 10% increase in revenue within that timeframe.

Amid a rather fluid regulatory environment, optimizing back-end processes of the revenue cycle has never been more critical, especially for hospitals looking to encourage patient engagement, boost satisfaction and drive timely patient financial engagement. But in order to successfully manage complex multi-state processes, hospital systems must prioritize creating a sophisticated and standardized billing and collections practice.

This means, in part, developing a billing process that incorporates meaningful patient interactions into the collections process.

For example, while adding additional payment options may seem like an unnecessary complication for the provider, finding a way to incorporate self-pay options can prove incredibly beneficial in the long run. Consider that as you expand your self-pay offerings, you are opening up more routes for patients to pay their bills.

While the complexities of maintaining your healthcare system’s multi-state compliance can be smoothed over by leaning on data-driven technology, the value of highly customized back-end software solution is diminished if complicated bills do not get paid. With such high stakes, healthcare systems unsure of how to best navigate these complexities should consider partnering with an experienced revenue cycle vendor.

When looking at the options for self-pay platforms, finding one that can be integrated into your current processes—maintaining your core value of standardized workflows across state lines—is essential. Not only will more standardized processes mean better collections on the services provided, but also better patient engagement and satisfaction.

By integrating a more patient-centric billing and collections process, multi-state hospital systems can ensure compliance amid a minefield of complex regulatory requirements and increase collections. Talk about a win-win.

Unsure where to start? Connect with one of our revenue cycle experts to define a new, more strategic path forward.