“Secret Shoppers” Find Most Hospitals Have Flexible Payment Options, but Details Are Hard to Come By

Patients face administrative barriers to get financial help information from hospitals – including 1 in 5 hospitals that were unreachable by phone – according to a USC “secret shopper” study.

Researchers from the USC Schaeffer Center for Health Policy & Economics called a random sample of 249 hospitals, posing as underinsured patients seeking financial options to pay for a knee endoscopy. The study aimed to understand the real-world difficulties for patients financially planning for their care, such as transfers between departments and confusion from hospital representatives.

The study, published in Health Affairs Scholar, found that 18% of hospitals could not be reached after three phone call attempts. That high level of non-response surprised the study’s authors, who previously found few hospitals promoting medical payment plans on their websites.

“Our previous work examining hospital websites found that a majority of hospitals require a phone call to learn about the details of hospital-run payment plans and other payment options,” said study lead author Samantha Randall, a project specialist at the Schaeffer Center. “However, this study found that reaching a hospital representative was often incredibly difficult.”

When researchers did connect with hospital representatives, they were often transferred. Researchers were transferred 613 times, averaging 2.5 times per hospital. That’s largely because the scope of information needed was typically not available from a single hospital department, the study found. Siloed offices handled financial assistance, billing and upfront payment requirements, requiring patients to navigate different offices.

“There are financial aid and payment plan options at most hospitals, and you can get that information from most hospitals by telephone,” said study co-author Erin Duffy, director of research training at the Schaeffer Center. “But the details of the options vary widely, and you have to be persistent and knowledgeable to navigate the different offices at each hospital.”

Federal policymakers have worked to help patients anticipate the cost of their care. That includes a 2021 rule requiring hospitals to post prices for 300 shoppable services and the No Surprises Act, which was passed by Congress in 2020 to address surprise out-of-network billing and requires health care providers to offer certain patients good faith estimates.

But those measures don’t address additional factors such as eligibility for discounts, the timing of payment requirements, and availability of financing arrangements, all of which are important for financial planning, study authors noted. That’s why they dialed up a random 10% sample of U.S. short-term non-government hospitals to learn what financial assistance options are available and how easily patients can learn about them.

Among hospitals with available information, the study found:

  • More than 86% offered financial assistance to insured patients for non-emergency procedures,
  • Yet roughly half of those hospitals (46%) will not notify patients of their approval for assistance until after the service.
  • The length and terms of payment plans varied widely for hospital-administered and third-party financing arrangements.
  • Upfront payments were required at 20% of hospitals that provided information, potentially posing barriers for patients without cash or credit access.

While the study revealed difficulties faced by consumers, the findings also point to financial challenges for hospitals. For example, payment plans were widely available without interest or fees, meaning hospitals face substantial cash flow delays from those patients.

“From the hospital perspective, our study findings indicate that hospitals often are not collecting the full allowed amount in a timely way for care provided to insured patients,” Duffy said. “Researchers and policymakers should be aware of that.”

About this study

Additional study authors include the Schaeffer Center’s Josephine Rohrer, Nicholas Wong, Nina Linh Nguyen and Erin Trish, who is co-director of the Schaeffer Center.

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