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March 15, 2023
David Burda
Consumerism Economics System Dynamics

When Knowing About the Healthcare Revenue Cycle Gets You an Extra Donut

Kids and adults like to complain about classes they had to take in school that, in their opinion, have no application in real life. “I’ll never use algebra when I’m older!” “Why did they make us dissect frogs in biology? I’ve never had to dissect a frog in 40 years!” That sort of thing.

For whatever reason, I find myself in the other camp. You never know when a seemingly useless piece of knowledge — or a tiny flathead brass wood screw — will come in handy. (You should see my workbench.)

Last week, one of my seemingly useless pieces of knowledge saved my mom from a $250 medical bill. It’s not much, but to an 84-year-old raised by Depression-era parents, the savings was a big deal.

Here’s what happened: I took my mom to her cardiologist appointment. I saw her hand the office staff her ID and Medicare Advantage insurance card at registration. She saw her cardiologist. He agreed to refill her blood pressure medication. I drove her back home.

A week later, the academic medical center where the cardiologist works sent her a $250 bill for the office visit, and she paid it immediately. People raised by Depression-era parents also don’t like to have outstanding bills. There’s something dishonorable about owing someone money.

Then, of course, she called me to complain about the bill because she thought it was too high, especially when she usually pays a nominal copay for an office visit with a doctor under her MA plan. It’s typically $20 for primary care and $30 for a specialist. So, I drove over last week to take a look at her bill.

Here’s where my seemingly useless piece of knowledge comes in. As a healthcare business journalist, I happen to write a lot about revenue cycle management. That’s the art and science of hospitals, health systems and medical practices collecting every dime they think they’re owed from payers and patients. They used to call it billing and collections, but someone decided that sounded too harsh when seeking payment from people who were sick or injured.

Anyway, I happen to know more about the healthcare revenue cycle than the average person simply because I write about it a lot.

I took one look at my mom’s bill and instantly knew what the problem was. The hospital misclassified her as “self-pay.” That’s a class of patient assigned by the revenue cycle department to people who don’t have insurance. The charge for the office visit was $750. My mom got a $500 “self-pay” cash discount. She owed the $250 balance, which she paid.

(Statistically speaking, self-pay patients are more likely to pay a $250 bill than they are a $750 bill. Better to get something than nothing. It also improves cash flow, reduces days in accounts receivable and helps speed the month-end close process. But I digress.)

Somehow, despite the hospital registration desk copying the front and back of my mom’s MA insurance card, the hospital entered her into its system as uninsured.

I called the customer service number on the bill, and a customer service representative asked me for the guarantor number on the bill. I also know what that is and where to find it. That’s despite the fact it’s in agate type and, I’d argue, virtually impossible for senior citizens to see without magnifiers.

I said, “The guarantor number is XXXXXXX, and you misclassified my mom as self-pay when she has a Medicare Advantage plan. She showed you her insurance card at registration. She should be classified as managed Medicare. I need you to submit your claim to her plan, have the plan send us an EOB and you to refund what she paid minus her co-pay.”


Silence. Then, “That’s exactly what will happen, sir. Expect an EOB in two to three weeks. We’ll refund what we owe her. We’re very sorry for the mistake. Thank you.”

No. Thank you.

My mom watched this unfold at the kitchen table and said, “Do you want another donut?” Children of Depression-age parents always have coffee and donuts for breakfast.

Finally, my useless pieces of knowledge about the healthcare revenue cycle came in handy, and I got an extra donut. Life is good.

Maybe they should teach healthcare revenue cycle in high school instead of algebra?

Thanks for reading.

About the Author

David Burda

David Burda began covering healthcare in 1983 and hasn’t stopped since. Dave writes this monthly column “Burda on Healthcare,” contributes weekly blog posts, manages our weekly newsletter 4sight Friday, and hosts our weekly Roundup podcast. Dave believes that healthcare is a business like any other business, and customers — patients — are king. If you do what’s right for patients, good business results will follow.

Dave’s personnel experiences with the healthcare system both as a patient and family caregiver have shaped his point of view. It’s also been shaped by covering the industry for 40 years as a reporter and editor. He worked at Modern Healthcare for 25 years, the last 11 as editor.

Prior to Modern Healthcare, he did stints at the American Medical Record Association (now AHIMA) and the American Hospital Association. After Modern Healthcare, he wrote a monthly column for Twin Cities Business explaining healthcare trends to a business audience, and he developed and executed content marketing plans for leading healthcare corporations as the editorial director for healthcare strategies at MSP Communications.

When he’s not reading and writing about healthcare, Dave spends his time riding the trails of DuPage County, IL, on his bike, tending his vegetable garden and daydreaming about being a lobster fisherman in Maine. He lives in Wheaton, IL, with his lovely wife of 40 years and his three children, none of whom want to be journalists or lobster fishermen.

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