How Payer, Provider Alignment Enables Simplified Medical Billing Format

When Banner|Aetna conducted market research and asked their members to name the primary barrier that prevented them from engaging easily with healthcare, the payer’s leadership did not expect the answer to involve medical billing.

Banner|Aetna is a joint venture between CVS Health’s insurance arm, Aetna, and Banner Health, one of the biggest nonprofit health systems in the US. In 2017 when the joint venture was formed, the payer and provider partners conducted surveys and assembled focus groups to better understand their members’ primary concerns.

Out of all the problems that plague the complex US health insurance industry, from the high cost of insurance to lagging mental healthcare coverage, the Arizona health plan’s members’ biggest concern was about billing.

“The number one problem on the minds of members was: ‘It's so hard to understand what I owe and how much was paid. I get all these Explanations of Benefits, I get these bills, I have to reconcile them, and I don't know what to do with them,’” Joanne Mizell, chief operating officer at Banner|Aetna, explained to HealthPayerIntelligence.

“That surprised us a little bit, but that was the number one biggest deterrent to really understanding and engaging with healthcare.”

Payers have taken steps to resolve this issue in the past. For example, Blue Shield of California created a billing app that allows members to receive a monthly, simplified bill with options for paying in full or in installments. In this solution, the payer fronts the member’s portion of the bill to reduce provider burden. But a couple of barriers stand in the way of achieving widespread change.

One of the barriers is a persistent problem that produces downstream effects beyond billing: the payer-provider rate negotiation process.

In order to create a simplified medical bill, payers and providers have to agree on the cost of the service. Historically, this has been a challenge.

Hospitals reported denial rates between 6 and 13 percent in 2021. A third of hospitals said that their average claims denial rate was 10 percent or more.

Disagreements between healthcare stakeholders over the cost of a service can lead to frustration and confusion among members as well as higher spending for denied services. In the worst cases, payers and providers who cannot work out their differing opinions on cost can leave thousands of patients out-of-network for their local providers.

The No Surprises Act aimed to end practices that left members paying the cost for payer-provider disputes by establishing a resolution process. But studies show that a fifth of Americans still received surprise bills up to six months after the law took effect, and as many as 28 percent of Americans either skipped care or hesitated before receiving care for fear of a surprise bill.

Without agreement on the cost of the medical bill, it is difficult—if not, impossible—for payers and providers to present members with a truly streamlined billing process.

However, Banner|Aetna had an advantage when it came to this issue. As a joint venture, the payer and provider were already aligned, operationally and financially. This model eradicated the risk of confusing members with multiple bills and opened the door to creating a single medical bill.

Banner|Aetna determined that the best way to resolve members’ primary concern would be to send members one medical bill that has received both the payer's and the provider’s approval. Mizell’s team called the concept a “single source of truth.”

“It is the single source of truth in that statement because we have both of our logos. We have a cover sheet on it that explains what this statement is and that we have both signed off on this agreement. It saves members a lot of time,” Mizell explained. “It doesn't make them have to have a Master's degree in Explanation of Benefits reconciliation.”

Unfortunately, alignment on the cost of services was not the only challenge that the payer and provider faced in their endeavors to create a single medical bill.

Attempting this effort also required a heavy lift technologically, especially if the payer-provider partners wanted to make the billing process occur in real time like Banner|Aetna did. This is where Banner|Aetna hit a temporary roadblock.

Once the health plan identified the main issue that members wanted to see fixed, they sought a technology vendor that could deliver the solution.

In 2018, the payer conducted an extensive request for information. Once Mizell’s team and the Banner team had a clear vision for what they wanted the solution to look like, they initiated a request for proposals process, which lasted through the end of 2019.

A couple of vendors seemed promising, but once Banner|Aetna started working with them it became clear that they did not necessarily have the capacity to fulfill the vision that the payer-provider partners had established.

After more than a year of talking to vendors, hearing what the vendors thought they could deliver, and realizing their limitations, Mizell’s team took a step back.

“We spent about 18 months on it. Ultimately, we stopped and had a separate conversation with Banner, and we said, ‘you know, nobody's done this. If we use a vendor, they're doing it for the first time, too. Why don't we just build it?’” Mizell recounted.

“That was the ideal solution for us—building it ourselves—because we could open up and be very transparent with each other, from IT strengths as well as IT weaknesses; very transparent because we're all one big family. We have the same incentives.”

Fourteen months later, the partners had created a single medical bill. They introduced the new medical billing model to consumers in November 2022. Members can receive the bill online or in print. The format shows members what Banner Health billed, what the member has already paid, what Banner|Aetna covered, and what remains for the member to pay.

Although Banner|Aetna was unable to achieve the real-time billing process that Mizell’s team hoped to design, the payer-provider partners successfully created a single statement for members, instead of a provider bill and a payer bill that they may receive weeks or months after the healthcare service or procedure.

Banner|Aetna’s final product extended beyond a single medical bill.

While they were developing the new bill format, Mizell’s team also worked on a status tracker. The status tracker allows members to see where the bill is in the billing process. Members can see when Banner is preparing the bill, when Banner sends the bill to Banner|Aetna, when the claim is being processed, and when a bill has been approved by both parties and is ready for payment.

“That was a really nice added feature for our members, to be able to know what to expect and when to expect it,” Mizell said.

Additionally, for members who have questions about the bill, Banner|Aetna established a phone line dedicated to answering billing-related inquiries. Since it is created for one specific purpose, the phone line is intended to have lower wait times.

For now, this solution is only available to members when they use Banner Health provider services. Mizell said that the payer is working toward an updated solution that will apply to providers who are not owned or operated by Banner Health but who work in Banner Health hospitals. More specifically, the second version will attempt to address surprise bills that occur during hospital visits.

“We are building on it, and we want to keep improving the experience and reaching more of our members with the experience. It's more than just a checkbox so that we can say that we were the first to do it or one of the first to do it. It's really about improving that member experience,” Mizell shared.