The following is an important excerpt from the recent HFMA Educational Report titled Your Patient Financial Assistance Strategy
Increases in self-pay activity and associated growth in bad debt make it particularly important these days for hospital revenue cycle leadership to ensure effective financial counseling services are in place at their organizations.
A 2009 HFMA survey of 92 hospitals found that 97 percent had more self-pay accounts receivable than they did the year before, more than 39 percent had a 10 percent or greater increase not only in self-pay accounts receivable, but also in self-pay balances and 20 percent had more than a 10 percent increase in bad debt write-offs. Largely because of self-pay receivables, total receivables are now outpacing patient revenues in nearly 33 percent of hospitals.
Many hospitals are attempting to transform self-pay and bad-debt amounts into receivable dollars by moving more revenue cycle decision making from the back-end of the process to the front. Some hospitals are working to increase the number of self-pay patients who obtain third-party financial assistance - and reduce bad debt write-offs in the process - through improved eligibility services.
Of course, accomplishing this goal isn’t easy. Hospitals face a variety of challenges when it comes to screening patients for financial assistance eligibility and supporting enrollment efforts, including:
Incomplete or Inaccurate View of Patient Financial Status
Traditionally, hospitals have made determinations of financial assistance or charity care based on information and supporting documentation supplied by the patient, such as proof of income. The process has been cumbersome and time-consuming because, in many cases, patients don’t provide this information promptly. As a result, pending accounts often remain in accounts receivable while patients without payment ability continue to be billed, unnecessarily utilizing hospital resources and increasing potential for poor community relations.
Complex Eligibility Requirements
Deadlines and complicated rules govern the application processes for third-party payment programs such as Medicaid, the State Children’s Health Insurance Program, Victims of Crime and other financial programs, creating opportunities for confusion and error.
Community and Patient Concerns
Hospital financial services, particularly processes surrounding provision of charity care, are under increased scrutiny from government and media officials. Also, particular sensitivity is needed as financial counselors navigate complex and sometimes challenging discussions involving patient personal financial information.
Still, success is possible. As the following real-life examples demonstrate, an effective financial assistance strategy chiefly depends on having the right processes, staffing, technology, and patient education in place.
Process: Timing and Targeting Financial Assistance Efforts
Taking patients through the financial application process can be a particularly complicated and lengthy exercise. Like many providers, Shore Health System in Easton, Md., is seeing benefit to processes that focus on getting financial assistance eligibility early in the revenue cycle.
“We have been trying to drive the use of self-pay segmentation data to the front-end, so we can recognize the patients who need assistance and make sure we go down the right path with them,” says Christine Fontaine, director of the revenue cycle, Shore Health and the University of Maryland Medical Systems.
Also useful is dedicating financial counselors in areas where outstanding self-pay receivables are most common: outpatient services and the emergency department (ED).
It was quite common a few years ago for hospitals to have dedicated social workers or inpatient financial counselors to begin the medical assistance process as the time of admission. “Hospitals spent a lot of time on those big dollars involving inpatient or surgery patients,” notes Fontaine.
“A couple of years ago,” she says, “we asked why we weren’t doing that for every patient who walks in the door: Why weren’t we screening patients for medical assistance in the ED, or when a patient walks into the lab? We felt that it wouldn’t matter what the dollar amount was—it could be $80 or even a $30 lab bill— because if we found a patient who was eligible for financial assistance and got coverage for a lab visit today, then we could possibly have coverage for an inpatient admission three weeks from now.”
Shore Health System has created what it calls financial clearance groups for various outpatient sectors, such as oncology. “We have a dedicated financial assistance worker in cancer care who tries to get medical assistance or reimbursement from pharmaceutical companies for chemotherapy. We cluster that for the patient and do whatever we can to get eligible patients covered,” Fontaine says.
Shore Health System is going live in the spring of 2010 with a program that places financial counselors in the ED at each of its five locations. The health system has been building implementation steps and workflow as well as training staff to provide the financial counseling function at the site of care.
“Registrars in the ED don’t have time to have detailed conversations with our patients, but they can flag the patients who might need financial counseling,” says Fontaine. “Our counselors will meet patients at the bedside or bring them back into the office if they are ready to be discharged from the ED, and they can screen them for eligibility for medical assistance and charity care.”
Participants in this HFMA Educational Report:
Christine Fontaine
Director of the Revenue Cycle
Shore Health and the University of Maryland Medical Systems
Josette Melillo
Director of Patient Accounts
Valley Hospital
Jennifer Gordon
Manager of Service Access
Midstate Medical Center
Pat Neal
Director of Admissions
Touchette Regional Hospital
John Majchrzak
Vice President of Finance
Touchette Regional Hospital
Lyman Sornberger
Executive Director of Patient Financial Services
Cleveland Clinic Health System
Download the full HFMA Educational Report
Discover Changes Providers are Making to Improve Their Patient Financial Assistance Strategy
