As healthcare costs continue to rise, pinching both patients and their employers, plans are under growing pressure to efficiently slash costs. 

The good news: Plan fiduciaries don’t need to look very far. Substantial savings are likely hiding in their claims today. 

"Understanding your claims data is the single most important thing you can do to fulfill your fiduciary duty to your plan and members, reduce your spend, and minimize your legal and PR risk," said Justin Leader, CEO and president of BenefitsDNA.

Goodbill CEO Patrick Haig sat down with Leader to discuss how plan sponsors, third-party administrators and healthcare brokers can leverage two little-known tools to maximize savings on every hospital visit: 

• IRS Section 501(r) to secure financial assistance discounts from most providers, and; 
• Electronic health records (EHRs) to enhance claim reviews

Here are the main takeaways from a one-hour webinar they recently co-hosted. You can also view a recording of the full webinar here.

Healthcare’s best-kept secret: 501(r) discounts

501(r), also commonly called financial assistance or charity care, is a law requiring nonprofit hospitals to give patients discounts based on their household income. 

Roughly 60% of U.S. hospitals are nonprofit, but few make their 501(r) financial assistance programs easy to access, according to Leader. 

Many plan sponsors and members would also be surprised to know how often they’d qualify for a discount. Eligibility thresholds are usually a multiple of official federal poverty levels. 

For example, a family of four earning up to $78,000 a year — or 250% of the federal poverty level for a four-person household — would generally qualify for a full 501(r) financial assistance discount on their hospital visit. A family of four earning up to $124,800 — or 400% of the federal poverty level — would still qualify for a partial 501(r) financial assistance discount. 

In fact, four in 10 hospital claims that Goodbill reviews are eligible for a full or partial 501(r) financial assistance discount, Haig said. 

Both the member and the plan stand to benefit from 501(r) financial assistance discounts:

• Members: Get up to 100% of their patient responsibility, and;
• Plans: Save up to 80% off billed charges on a claim through a carefully crafted summary plan document (SPD) and repricing to "amounts generally billed," referred to as AGB. AGB is defined in the regulation and is often in line with Medicare pricing, and therefore usually more favorable than reference-based pricing, which self-funded plans commonly use.

"This is a win for both members and plans," Haig said, about 501(r) financial assistance discounts.

Four in 10 claims that Goodbill reviews are eligible for a full or partial 501(r) financial assistance discount

Goodbill leverages technology to make the 501(r) application process easy and seamless. Members can instantly check their eligibility for financial assistance discounts for over 3,500 hospitals from their secure Goodbill portal. If they qualify, Goodbill helps them complete the application, then follows up with the hospital for results. Members can even connect their pay stubs and bank statements as proof of income, in just seconds.

Ultimately, understanding and evaluating 501(r) solutions should be part of fulfilling a plan sponsor’s fiduciary duty, Leader added. "I would say you’re violating your fiduciary duty if you’re not evaluating all the strategies that are available to you," he said.

Supercharge claim reviews with EHR data

Many cost containment solutions only review hospital claims above a certain dollar-threshold, typically $35,000, which means that a lot of savings slip through the cracks, according to Haig.

Those solutions also don’t always cross-check the member’s electronic health record (EHR), also known as a medical record. EHRs contain the physician’s own notes from the hospital visit, providing valuable information that can help uncover two types of overcharges:

• Coding errors: Such as duplicate codes, upcoding, unbundling
• Clinically unnecessary care: Such as inflated severity of condition, or excessive labs, procedures and tests‍

In fact, five in 10 claims that Goodbill reviews contain coding errors or unnecessary care, resulting in an average savings of 30%.

"That’s why it’s very important that we review claims with the medical record," Haig said. "The medical record is the source of truth."

Traditionally, EHRs are difficult to obtain from the hospital, and the process involves a combination of faxing and calling the hospital. Goodbill has built integrations to enable members to digitally connect their EHRs at over 2,500 hospitals, with just a few clicks. 

"The medical record is the source of truth," Haig said.

This digital EHR access accelerates claim review turnaround times, allowing Goodbill to catch inflated charges even before the plan pays the provider, which means both the plan and member keep money in their pockets.

"If you’re not catching this waste upfront, it’s not only impacting the member today from a member responsibility perspective, but it’s also driving any premium they may be contributing toward down the line," Haig said. "Catching this upfront is double impactful."

Learn more

To learn more about the power of 501(r) discounts and EHR-enhanced claim reviews in reducing healthcare spend, view the full webinar, “Tame the Claim: Efficient Strategies to Slash Health Plan Costs.”

To learn more about Goodbill’s cost containment solution, visit our Payers page or schedule a demo.

Questions? Reach out to us at partner@goodbill.com.