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Health care isn't quite recession-proof. Laid-off, uninsured patients are taking a toll on hospitals, letting doctor's bills and inpatient charges slip as mortgage payments and grocery costs pile up. As payments slow to a trickle, hospitals are finding new ways to tap patients for what's due.
Money Troubles
Hospitals are facing a number of burdens in the poor economy, according to Jim Schwamb, vice president, patient financial services, BayCare Health System, Tampa, FL. Schwamb said BayCare's hospitals have seen a rise in the number of uninsured patients seeking care, and more of those patients are qualifying for charity care. The 100 percent write-off helps patients, but it throws the financial load onto providers.
Adding to the strain, emergency departments (EDs) are treating more patients for primary care issues, according to Lou Ann Watson, medical assistance manager at BayCare. Unable to pay for a doctor's visit and with nowhere else to turn, patients head to the ED. It's a quick fix for the uninsured, but a long-term burden on hospitals that treat them, as billing departments are left to track down payment or chalk it up to uncompensated care.
Lynn Flynn, corporate director of revenue cycle operations at Oakwood (MI) Healthcare System, has also noticed an increase in Medicaid and self-pay patients, but said much of the challenge now is helping recently unemployed patients understand their options. "Some people don't realize they can still get COBRA benefits," she explained.
As self-payment, co-pays and deductibles increase, Flynn expects hospitals to feel the strain. It is a challenge for providers; patients come first, but increasing uncompensated care negatively impacts financial liability, Flynn said.
Not Your Average Co-Pay
With fewer sources to rely on for reimbursement, hospitals are scrambling to collect payments when they can. To improve collections, BayCare estimates the patient's share of the bill upfront--and asks them to pay in full at the time of service. Upfront billing has been in place for 3-4 years, and Schwamb said there are noticeable improvements. Cash collections have increased 30-40 percent each year. The practice also saves billing and postage costs, as fewer bills are printed and mailed to patients' homes.
Billing at time of service also saves hospitals from hunting down patients for delinquent payments--an often futile effort. With hospitals in popular vacation spots like Clearwater, FL, BayCare treats many international travelers who get injured or fall ill on vacation. Upfront billing ensures the hospital gets paid before patients return to their home country. "It's important for us to get them collected while they're still here," Schwamb said.
Earlier this year, Oakwood implemented "financial informed consent." Offered for elective procedures in radiology, cardiology and surgery, the program gives patients an estimate of their out-of-pocket charges and asks them to pay at least a portion of the bill upfront. Patients who find the price too high can delay the procedure or arrange a payment plan through OakAssist, the organization's financial assistance program.
Since instituting financial informed consent, Oakwood has increased its self-pay collections, Flynn said. The initiative also cuts bad debt dollars; patients who have a history of unpaid bills are required to pay the estimate or rectify delinquent claims before doctors go ahead with the procedure, Flynn said. It's a tough stance, but it keeps providers out of the red.
Hospitals have embraced upfront billing, but the public has mixed reactions. Patients at various hospitals across the country have spoken out against the practice. Newspapers share stories of the sticker shock when patients are asked to fork over thousands of dollars instead of the standard co-pay.
But while some patients find it a hard pill to swallow, upfront billing has become common practice, according to Schwamb. "Nowadays, every health care provider, whether it's a dentist or physician or hospital, is asking for those dollars, and I think the patients expect that to happen," he explained.
In fact, upfront collections give patients more clarity about what they're being charged for. At BayCare, inpatients receive a letter outlining what is owed, which many find an improvement over traditional claims, which offer vague explanations. "They appreciate knowing what their responsibility is going to be because they would have no other way of finding out," Schwamb said.
Financial Aid
Regardless of how proactive or transparent a hospital is about billing, some patients simply can't pay. When just making the $20 co-pay is tough, paying hundreds or thousands of dollars out-of-pocket isn't feasible.
When patients can't afford to pay upfront, hospitals work with them to ease the financial burden. Schwamb said BayCare never turns a patient away for inability to pay. Instead, case workers check their eligibility for charity care. At BayCare, patients who earn up to 200 percent of the poverty level can apply for charity, as recommended by Florida state. Those at 250 percent of the poverty level are eligible for the health system's "hardship charity," Schwamb said.
Oakwood also offers charity care and discounts. Patients can earn discounts for 40, 60 or 100 percent of the bill if they meet eligibility requirements, which are based on income level and household size. Those who aren't covered by insurance but can afford a procedure get a 25 percent discount on out-of-pocket cost, Flynn said.
Various insurance and assistance programs, such as Medicaid, COBRA and county programs, are other options.
"There are a lot of opportunities and people are not aware of [what's available]," Schwamb said. "So we help educate them and, in some cases, we even help them through the application process."
Education is critical in times of economic crisis, when some families are facing financial hardship for the first time, according to Watson. "Many of the people we're seeing are newly unemployed and they've never been in that situation before," she explained.
Traditionally, case workers advise patients who received inpatient treatment or outpatient services. But as patients burden the ED with issues better suited for their PCPs, BayCare is moving case workers into the ED to slow the flow of uninsured patients and, as a result, shore up revenue. Watson said the program's aim is to "get [patients] hooked up into community programs where they won't have to use the ED as their primary care."
Case workers meet with patients in the afternoon, evening or weekends to help them find a free clinic or medical program where they can access affordable care. If the ED visit is eligible for a charity write-off, the counseling may end there, Watson said. But whena patient is referred to Medicaid or an assistance program, the case worker will follow up, especially if the patient has any problems.
It's important to direct patients to affordable care before ED visits become a habit. Schwamb said some patients will return to the ED two or three times a year for treatment--those can add up to costly write-offs for the hospital. "The sooner we get some sort of payment mechanism, then the better it's going to help the hospital," Schwamb explained.
The ED program has also been "well-received" among patients, Schwamb said. A pilot was conducted at one of BayCare's hospitals last year, and the expanded program was launched last month. BayCare plans to put case workers in the ED at every hospital.
Oakwood has also implemented initiatives in the ED. "What we need to do, throughout the country, is to get people out of using those EDs as their primary care," Flynn said.
Oakwood has bedside registration in the ED and uses that as an opportunity to meet with the patient, explain their financial responsibility and ask for the co-pay. Flynn said the co-pay is a set amount, similar to what a patient would owe at a doctor's office. Plus, if patients have financial issues, it's a great time to set them up with a financial counselor who can direct them to clinics for affordable primary care.
That type of proactive effort is key to helping patients get the care they need in a cost-effective way, according to Flynn. "We've always had that focus on 'how do we help patients?'" she said. "And it's even more of a need right now."
Cheryl McEvoy is an editorial assistant with ADVANCE.
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