Medical bill confusion is widespread, with 38% of American adults finding it tricky to decode their bills. The biggest frustration for most people is that they don’t understand what they’re being charged for. There’s also a lack of transparency in healthcare pricing — patients often don’t know the cost of their treatment until after receiving care. 

In addition to driving patient dissatisfaction, unclear bills and unexpected charges can result in delayed payments, a spike in billing inquiries and a larger administrative burden. With the right technology, you can clarify pricing and cut through the confusion.

Why Medical Bills Are So Complex

Medical bills are complex for patients because several stakeholders are often involved in providing and paying for care. Whether they’re dealing with an emergency or a routine checkup, understanding how coverage rules, coinsurance, copays and deductibles apply can be challenging. Unclear billing practices amplify the confusion and increase uncertainty regarding patient financial responsibility. 

Once patients finally decipher their bill, they often face unexpected charges and a higher-than-anticipated balance. In 2021, 87% of patients reported being surprised by a medical bill.

To address these challenges and boost transparency, regulations aim to make pricing information more accessible. For example, the Hospital Price Transparency (HPT) Rule mandates hospitals to publicly list standard service prices. The Transparency in Coverage (TiC) Rule mandates health plans to disclose pricing information on what’s covered.

However, simply posting prices alone isn’t enough to deliver meaningful transparency or reduce confusion. Many patients don’t know how to interpret amounts, understand the billing workflow or evaluate treatment options. They may also struggle to translate rates to their specific situation, such as plan coverage specifics, out-of-pocket expenses and extra fees from external providers involved in their care.

How Medical Bill Confusion Impacts Patients and Providers

The lack of easy-to-understand billing and price transparency in healthcare impacts both patients and providers.

Patient Perspective

When your patients mistake an explanation of benefits statement for a bill or can’t make sense of current procedural terminology codes, confusion can turn into: 

• Stress and anxiety surrounding billing: Navigating complicated medical bills and unexpected charges is stressful and anxiety-inducing, especially if patients can’t afford the cost of care. In fact, 92% of insured Americans feel this stress has harmed their mental and physical health. 
• Reduced trust in the healthcare system: When patients receive a medical bill they don’t understand, it’s up to them to verify its accuracy or seek financial assistance. Since as much as 80% of bills contain errors, such an experience can erode trust in providers and prevent patients from seeking the care they need.
• Reluctance to pay without a clear explanation: Non-patient-friendly layouts and language make it tough to see which services were rendered and why they cost a certain amount. This can increase uncertainty about what patients owe, creating a barrier to payment — 37% won’t pay their bill unless they understand it. 

Provider Perspective

Billing confusion may seem like a patient issue. However, your organization feels it too, often with direct impacts on revenue and costs:

• Heavier administrative burden: Increased call volumes from patient billing inquiries and questions are resource‑intensive and time-consuming, especially without the right tools. Administrative teams already juggle heavy workloads — explaining statements, reworking errors and reissuing statements only adds pressure. 
• Increased accounts receivable (A/R) days: Patients delay or skip payments when they don’t understand what they owe or how to settle their accounts. This can slow your organization’s patient revenue cycle, disrupt cash flow and increase days in A/R. The longer funds are stuck in A/R, the higher your risk of bad debt. 
• Higher costs to collect: When more payments are late, providers have to send out more statements and make additional outbound calls, pushing up the cost to collect. Handling inquiries from confused patients adds even more overhead.
• Strained patient-provider relationships: Negative billing experiences can hurt your organization’s reputation, making patient attraction and retention tough. Aggressive collection efforts can do more harm than good, further alienating patients.

Why Price Transparency Matters in Healthcare

As patients shoulder a larger share of medical bills, price transparency matters more than ever. Out-of-pocket costs are also becoming more expensive. In 2024, 32% of insured employees had yearly deductibles of $2,000 or more, almost double the 2014 share.

True price transparency goes beyond posting list prices. It involves easy-to-understand, patient-specific cost information. This includes everything from itemized estimates to coverage details, as well as a clear breakdown of financial responsibility.

Accurate cost information lets patients make informed care decisions. They can plan their finances, evaluate treatment options and compare providers to avoid surprise bills and lower their chances of incurring medical debt.

Transparent pricing can also benefit your organization by fostering trust and improving communication. When you provide upfront pricing, you help patients understand their coverage, which can translate to fewer benefit questions, billing disputes and administrative loops. The results are faster patient payments and improved cash flow.

Here’s how your organization can support price transparency through patient-friendly billing:

• Simplify statements: Use jargon-free language to break down charges, payments received and the remaining amount. You should also be mindful of patients’ preferred format and offer both print and digital options. 
• Offer several payment options: Supplement clear statements with quick and easy payment methods. Provide multiple options, such as online patient payment portals and mobile pay. 
• Supply financial assistance information: Almost half of American adults find healthcare costs unaffordable — even with transparent prices and a straightforward bill, they may need help settling their accounts. Include information about your organization’s financial assistance options, like payment plans or discounts.
• Provide dedicated support: Medical bills are complex, and some patients will still have questions. Expert patient support specialists, like the team at Millennia, can deliver personalized service to explain bills and facilitate payment. 

How Technology Improves Price Transparency and Streamlines Billing

Technology will be a significant driver of price transparency in the coming years. For example, digital tools can present billing data in personalized and digestible formats. They might use graphs and charts to provide patients with simple explanations of benefits, clearly showing the bill’s components and how these contribute to specific charges. Many providers are turning to AI to automate routine billing, helping them reduce medical bill errors and preserve patient trust. 

Patients can also take charge of their medical bills thanks to technology. Self-service tools like patient payment portals allow them to view their outstanding amounts, pay balances, view payment history and manage accounts. Along with these portals and methods like mobile pay, options like text-to-pay and QR-enabled payments streamline the payment process.

With the right tools and platforms, you can save time for your organization and its patients while making healthcare costs easier to understand. The Millennia Patient Payment Solution is designed to simplify patient payments so you can capture more of them.

• Interactive statements: With Millenia, digital statements become educational tools, displaying charge breakdowns, insurance explanations and various payment options to suit patients’ needs. Each statement also features a unique QR code linking to a payment page that shows patients their balance. Plus, everything is white-labelled with your organization’s brand and logo.
• Intuitive payment platforms: Our web-based patient payment portal has a user-friendly interface and provides patients with the necessary information to understand their bills. They can also settle their accounts and set up self-service payment plans to more easily manage pricey bills.
• Specialized support and communication: Millennia brings a “human touch” to patient communication. Our patient support agents answer billing inquiries and resolve issues via phone, live chat, text or email. We also provide email and automated text reminders that show cost estimates before appointments, promoting transparency and financial planning.

Millennia: Your Solution for Price Transparency and Clearer Medical Bills

With a decade of experience, Millennia helps healthcare providers thrive financially while offering patients a personalized and stress-free payment experience. Our Patient Payment Solution clarifies financial responsibility and the cost of care, allowing you to streamline administrative processes, accelerate revenue collection and preserve patient trust. 

Clients implementing our solution see a 50% reduction in cost to collect and a 100%-300% increase in self-pay revenue. Ready to achieve similar results? Schedule a consultation today.

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