HealthPay24 and Baystate Health discuss the new CMS rule and what it means for healthcare providers.


  • Julie Gerdeman, HealthPay24
  • Kate Pepoon, Baystate Health




By anticipating rather than reacting to mandates on healthcare economics and process efficiencies, providers are becoming more competitive and building more trust and satisfaction with their patients — and caregivers.

To learn more about the benefits of a more proactive and data-driven approach to healthcare cost estimation, we are joined by expert Kate Pepoon, Manager of Revenue Cycle Operations at Baystate Health in Springfield, Mass. Welcome, Kate.

Pepoon: Thank you for having me.

Gardner: We are also here with Julie Gerdeman, President of HealthPay24 in Mechanicsburg, Penn. Good to have you back, Julie.

Gerdeman: Thanks, Dana.

Gardner: We are at the point with healthcare and medical cost transparency that the finger, so to speak, has been pulled out of the dike. We have had mandates and regulations, but it’s still a new endeavor. People are feeling their way through providing cost transparency and the need for more accurate estimations about what things will actually cost when you have a medical procedure.

Kate, why does it remain difficult and complex to provide accurate medical cost estimates?

Pepoon: It has to do with educating our patients. Patients don’t understand what a chargemaster is, which, of course, is the technical term for the data we are now required to post on our websites. For them to see a spreadsheet that lists 21,000 different codes and costs can be overwhelming.

What Baystate Health does, as I’m sure most other hospitals in Massachusetts do, is give patients an option to call us if they have any questions. You’re right, this is in its infancy. We are just getting our feet wet. Patients may not even know what questions to ask. So we have to try and educate as much as possible.

Gardner: Julie, it seems like the intention is good, the idea of getting more information in peoples’ hands so they can make rational decisions, particularly about something as important as healthcare. The intent sounds great, but the implementation and the details are not quite there yet.

Given that providers need to become more proactive, look at the different parts of transparency, and make it user-friendly, where are we in terms of this capability?

Gerdeman: We are still in the infancy. We had a race to the deadline, to the Centers for Medicare and Medicaid Services (CMS) [part of the U.S. Department of Health and Human Services] deadline of Jan. 1, 2019. That’s when all the providers rushed to at least meet the bare minimum of compliance. A lot of what we have seen is just the publishing of the chargemaster with some context available.

But where there is competition, we have seen it taken a bit further. Where I live in Pennsylvania, for example, I could drive to a number of different healthcare providers. Because of that competition, we are seeing providers that don’t just provide context, they are leveraging the chargemaster and price transparency as competitive differentiation.

Gardner: Perhaps we should make clear that there are many areas where you don’t really have a choice and there isn’t much competition. There is one major facility that handles most medical procedures, and that’s where you go.

But that’s changing. There are places where it’s more of a marketplace, but that’s not necessarily the case at Baystate Health. Tell us why for your patients, they don’t necessarily do a lot of shopping around yet.

Pepoon: They don’t. That question you just asked Julie, it’s kind of the opposite for us because we have multiple hospitals. When we posted our chargemaster, we also posted it for our other three hospitals, not just for the main one, which is Baystate Medical Center (BMC). And that can create confusion for our patients as well.

We are not yet at the drive to be competitive with other area hospitals because BMC is the only level-1 trauma center in its geographical area. But when we had patients ask why costs are so different at our other hospitals, which are just 40 miles away, we had to step up and educate our staff. And that was largely guiding patients as to the difference between a chargemaster price and what they are actually going to pay. And that is more an estimate of charges from their particular insurance.

We have not yet had a lot of questions from patients, but we anticipate it will definitely increase. We are ready to answer the questions and guide our patients.

Gardner: The chargemaster is just a starting point, and not necessarily an accurate one from the perspective of an outsider looking in.

But it began the process to more accurate price transparency. And even while there is initially a regulatory impetus, one of the biggest drivers is gaining trust, loyalty, and a better customer experience, a sense of confidence about the healthcare payments process.

Julie, what does it take to get past this point of eroding trust due to complexity? How do we reverse that erosion and build a better process so people to feel comfortable about how they pay for their healthcare?

Gerdeman: There is an opportunity for providers to create a trusted, unique, and personalized experience, even with this transparency regulation. In any experience when you are procuring goods and services, there is a need for information. People want to get information and do research. This has become an expectation now with consumerization — a superior consumer experience.

And what Kate described for her staff, that’s one way of providing a great experience. You train the staff. You have them readily available to answer questions to the highest level of detail. That’s necessary and expected by patients.

There is also a larger opportunity for providers, even just from a marketing perspective. We are starting to see healthcare providers define their brand uniquely and differently.  And patients will start to look for that brand experience. Healthcare is so personal, and it should be part of a personalized experience.

Gardner: Kate, I think it’s fair to say that things are going to get even more challenging.  Increasingly, insurance companies are implementing more co-pays, more and different deductibles, and offering healthcare plans that are more complex overall.

What would you like to see happen in terms of the technologies and solutions that come to the market to help make this process better for you and your patients?

Pepoon: Dana, transparency is going to be the future. It’s only going to get more … transparent.

This infancy stage of the government attempting to help educate consumers — I think it was a great idea. The problem is that that did not come with a disclaimer. Now, each hospital is required to provide that disclaimer to help guide patients. The intent was fantastic, but there are so many different ways to look at the information provided. If you look at it face-value, it can be quite shocking.

I heard a great anecdote recently, that a patient can go online and look at the chargemaster and see that aspirin is going to cost them $100 at a hospital. Obviously, you are taken aback. But that’s not the actual cost to a patient.

There needs to be much more robust education regarding what patients are looking at. Technology companies can help bring hospitals to the next level and assist with the education piece. Patients have to understand that there is a whole other layer, which is their actual insurance.

In Massachusetts we are pretty lucky because 12 years ago, then-Governor Mitt Romney [led a drive to bring health insurance to almost everyone]. Because of that, it’s reduced the amount of self-pay patients to the lowest level in the entire United States. Only around two to three percent of our patients don’t have insurance.

Some of the benefits that other states see from the published chargemaster list is better engaging with patients and to have conversations. Patients can say, “Well, I don’t have insurance and I would like to shop around. Thank you to Hospital A, because Hospital A is $2,000 for the procedure and Hospital B is only $1,500.”

But Massachusetts, as part of its healthcare laws, further dedicates itself to educating patients about their benefits. MassHealth, the Medicaid program of Massachusetts, requires hospitals to have certified financial counselors.

Those counselors are there to help with patient benefits and answer questions like, “Is this going to cost me $20,000?” No, because if you sign up for benefits or based on the benefits you have, it’s not going to cost you that much. That chargemaster is more of a definition of what is charged to insurance companies.

The fear is that this is not so easily explained to patients. Patients don’t always even get to the point where they ask questions. If they think that something is going to cost $20,000, they may just move on.

Gardner: The sticker shock is something you have to work with them on and bring them back to reality by looking at the particulars of their insurance as well as their location, treatment requirements, and the specific medical issues. That’s a lot of data, a lot of information to process.

Not only are the patients shopping for healthcare services, they will also be shopping for their next insurance policy. The more information, transparency, and understanding they have about their health payments, the better shopper they become the next time they pick an insurance company and plan. These are all choices. This is all data-driven. This is all information-dependent.

So Julie, why is it so hard in the medical setting for that data to become actionable? We know in other businesses that it’s there. We know that we can even use machine learning (ML) and artificial intelligence (AI) to predict the weather, for example. And the way we predict the weather is we look at what happened the last 500 times a storm came up the East Coast as an example that sets a pattern.

Where do we go next? How can the same technologies we use to predict the weather be brought to the medical data processing problem?

Gerdeman: Kate said it well that transparency is here, and transparency is the future. But, honestly, transparency is table stakes at this point.

CMS has already indicated that they expect to expand the pricing transparency ruling to require even more. This was just the first step. They know that more has to be done to address complexity for patients as consumers.

Technology is going to play a critical role in all of this, because when you reference things like predicting the weather and other aspects of our lives, they all leverage technology. They look back in order to look forward. The same is true for and will be used in healthcare. It’s already starting to.

So [patient support] teams like Kate’s use estimation tools to provide the most accurate as possible costs to patients in advance of services and procedures. HealthPay24 has been involved as part of our mission, from pre-service to post-service, in that patient financial engagement.

But it is in arming providers and their staffs with that [predictive] technology that is most important for making a difference in the future. There will always be complexities in healthcare. There will always be things happening during procedures that physicians and surgeons can’t anticipate, and that’s where there will be modifications made later.

But given what we know of the costs around the 5,000 knee replacements some healthcare provider might already have done, I think we can begin to provide forward-looking data to patients so that they can make informed decisions like they never have before by comparing all of that.

Gardner: We know from other industries that bringing knowledge and usability works to combat complexity. And one of the places that can be most powerful is for a helpdesk. Those people are on the other end of a telephone or a chatbot from consumers — whether you are in consumer electronics or information technology.

It seems to me that those people at Baystate Health, mandated by the Commonwealth of Massachusetts, who help patients are your helpdesk. So what tools would you like to see optimally in the hands of those people who are explaining away this complexity for your patients?

Pepoon: That’s a great question. Step one, I would love to see some type of education, perhaps a video from some hospitals if they partnered together, that helps patients understand what it is they are about to look at when they look at a chargemaster and the dollar amounts associated with certain procedures.

That’s going to set the stage for questions to come back through to the staff that you mentioned, the helpdesk people, who are there ready and willing to respond to patients.

But there is another problem with that. The problem is that these are moving targets. People like black-and-white. People like, “This is definitely what I’m going to pay,” before they get a procedure done.

We have heard of the comparison to buying a car. This is very similar to educating yourself in advance, of looking for a specific model you may like for a car, of going to different dealers, looking it up online, seeing what you’re going to pay and then negotiating that before you buy the car.

That’s the piece that’s missing from this healthcare process. You can’t yet negotiate on it. But in the future – with the whole transparency thing, you never know. But it’s that moving target that’s going to make this hard to swallow for a lot of patients because, obviously, this is not like buying a car. It’s your life, it’s your health.

The future is going to have more price transparency. And the future is also going to bring higher costs to patients regardless of who they are and what plan they have. Plans 10 years ago didn’t have deductibles. The plans we had 10 years ago that had a $5 co-pay, and now those plans have a $60 co-pay and a $5,000 deductible.

That’s the direction our healthcare climate is moving to. We are only going to see more cost burdens on patients. As people realize they are going to need to pay out more money for their own healthcare services, it’s going to bring a greater sense of concern.

So, when they do call and talk to that helpdesk, it’s really important for all of us in all of our hospitals to make sure that we are answering patients properly. It was an amazing idea to have this new transparency, but we need to explain what it means. We need to be able to reach out personally to patients and explain what it is they are about to look at. That’s our future.

Gerdeman: I would just like to add that at HealthPay24 we work with healthcare providers all across the country. There are areas that have already had to do this. They have had to be proactive and jump into a competitive landscape with personalized marketing materials.

We are starting to see educational videos in places like Pennsylvania using the human touch, and the approach of, “Yes, we recognize that you’re a consumer, and we recognize that you have a choice.” They have even gone to the extent of creating online price-checkers and charge-checkers to give people flexibility from their homes of conveniently clicking a box from a chargemaster to determine what procedure or service they are to be receiving. They can furthermore check those charges across multiple hospitals that are competing and that are making those calculators available to consumers proactively.

Gardner: I’m sensing a building urgency around this need for transparency from large organizations like Baystate Health. And they are large, with service providers in both Western Massachusetts as well as the “Knowledge Corridor” of Massachusetts and Connecticut. They have four hospitals, 80 medical practices, 25 reference laboratories, 12,000 employees, and 1,600 physicians.

They have a sense of urgency but aren’t yet fully aware of what is available and how to solve this problem. It’s a big opportunity. I think we can all agree it’s time now to be proactive and recognize what’s required to make transparency happen and be accurate.

What do you recommend, Kate, for organizations to be more proactive, to get out in front of this issue? How can vendors in the marketplace such as Julie and HealthPay24 help?

Pepoon: There needs to be a better level of education at the place where patients go to look at what medical charge prices are. That forms a disclaimer, in a way, of, “Listen, this is what you are about to look at. It’s a little bit like jargon, and that’s okay. You are going to feel that way because this is raw data coming from a hospital, and a lot of people have to go to school for very long time to read and understand what it is that they are looking at.”

And I think if there has to be a way that we can have patients focused and able to call and ask questions. That’s going to help.

For the technology side going forward, I am very interested to see what it’s going to look like in about a year. I want to see the feedback from other hospitals and providers in Massachusetts as to how this has gone. Today, quite frankly, when I was doing research for us at Baystate I reached out to find out what are the questions patients are asking. Patients are not really calling that much to talk about this subject yet. I don’t know if that’s a good thing or a bad thing. I think that that’s a sentiment most hospitals in Massachusetts are feeling right now.

I don’t think there is one hospital system that’s ahead of the curve or running toward the goal of plastering all of this data out there. I don’t think everybody knows what to do with it yet. IT companies and partners that we have — our technical partners like HealthPay24 – can help take jargon and put it into some version that is easily digestible.

That is going to be future. It ties back to the question of: Is transparency going to be the wave of the future? And that’s absolutely, “Yes.” But it’s all about who can read the language? If me and Julie are the only two people in a room who can read the language, we are letting our patients down.

Gardner: Well, engineering complexity out is one of the things the technology does very well. Software has been instrumental in that for the past 15 or 20 years.

Julie, as we end our discussion, for organizations like Baystate Health that want to be more proactive, to be able to answer those patient phone calls in the best way, what do you recommend? What can healthcare provider organizations start doing to be in front of this issue when it comes to accurate and transparent healthcare cost information?

Gerdeman: There is a huge opportunity to look at technology available today, as well as emerging technology and where it’s headed. If history proves anything, Dana, to your point, it’s that technology can provide new levels of clarity and reduce complexity. You can digitize processes that were completely manual and where everything needed to be done on the phone, via fax, and on paper.

In healthcare, there’s a big opportunity to embrace technology to become more proactive. We talk about being proactive, and it really means to stop reacting and take a strategic approach, just like in IT architectures of the past. When you take that strategic approach you can look at processes and workflows and see what can be completely digitized and automated in new ways. I think that’s a huge opportunity.

I also don’t want to lose sight of the humane aspect because this is healthcare and we are all human, and so it’s personal. But again, technology can help personalize experiences. People may not be calling because they want access online via their phone, or they want everything to be mobile, simple, beautiful, and digital because that’s what we increasingly experience in all of our lives.

Providers have a great opportunity to leverage technology to make things even more personal and humane and to differentiate themselves as brands, in Massachusetts and all across the country as they become leading brands in healthcare.

Gardner: I’m afraid we’ll have to leave it there. You’ve been listening to a sponsored BriefingsDirect healthcare finance insights discussion on how healthcare providers can become more proactive in modernizing financial and costs transparency — from the patient perspective. And we’ve learned how anticipating rather than reacting to mandates on healthcare economics and process efficiencies builds more trust and satisfaction from patients as well as their caregivers.

So please join me in thanking our guests, Kate Pepoon, Manager of Revenue Cycle Operations at Baystate Health. Thank you so much, Kate.

Pepoon: Thank you, it was great.

Gardner: And we have been here with Julie Gerdeman, President of HealthPay24. Thank you so much, Julie.

Gerdeman: Thanks for the opportunity, Dana.

Gardner: And a big thank you as well to our audience for joining this HealthPay24-sponsored healthcare thought leadership discussion.
