Disparities for uninsured examined
With growing scrutiny nationwide of how hospitals bill and collect payments from their uninsured patients, access managers and their bosses are taking a look at their self-pay policies and reflecting on how this trend will affect revenue management strategies. In late July, House Energy and Commerce Committee Chairman Billy Tauzin (R-LA) and Oversight and Investigations Subcommittee Chairman James Greenwood (R-PA) sent letters to 20 health systems requesting information on their billing practices as part of an investigation into billing disparities for the uninsured.
Government concern
In June, the American Hospital Association (AHA) issued an alert to the chief executives of 4,800 hospitals across the United States, as well as every state hospital association, after learning of the "high level of concern" expressed by the congressional committee. AHA suggested hospitals perform the equivalent of an audit of their billing, charity care, and debt-collection practices.
"Aurora Health Care chooses to be proactive in this policy development," Marne Bonomo, PhD, regional director for patient access for the Milwaukee-based organization, told Hospital Access Management soon after receiving an e-mail on the matter from her CFO. His message, she said, addressed the need to take a look at the self-pay issue in response to the scrutiny being given to the way uninsured patients are billed. "Aurora already has a policy for self-pay discounts," she adds. "We are just updating it a bit."
Rick Wade, an AHA senior vice president, has said that congressional staffers appear to be interested in the issue of charges, which are the retail prices that hospitals list for their services. While hospitals negotiate discounts with insurers and HMOs that require payment of only a fraction of the listed charges, they typically ask the uninsured to pay the full rates and then use aggressive measures to collect.
AHA alert
The letter to health systems from the congressional committee requests financial information such as net revenue collected per patient day from Medicare, Medicaid and other insurers for the health system and each of its hospitals beginning in January 1998. It also asks how the health systems identify uninsured patients who are eligible for charity care or payment planning assistance and how they notify such patients of the availability of such assistance, as well as about policies, procedures, and practices relating to charges and collections. The letter can be viewed at http://energycommerce.house.gov/.
The AHA alert urges members to stop using harsh bill-collection tactics that reflect poorly on the industry, and outlines remedial measures hospitals should consider. Those include being more transparent about what they charge and being proactive in identifying low-income patients who may qualify for assistance and helping them obtain subsidized or charity care. The alert suggests that hospitals re-examine such practices as hiring outside collection agencies and lawyers that use such methods as filing lawsuits, slapping liens on homes, seizing bank accounts, and garnishing wages to get payment.
AHA members can view the advisory at www.hospitalconnect.com.
Joe Denney, CHAM, director of revenue management for The Ohio State University Health System in Columbus and a past president of the Washington, DC-based National Association for Healthcare Access Management, points out that it is misleading to say that hospitals charge the self-pay patient more than other payers.
"That is false," he says. "At least for all organizations who are Medicare providers, the government stipulates that you cannot charge any payer less than you charge Medicare. End of story. So if patients from 10 different payers — let’s say a combination of managed care, commercial, Medicare, Medicaid and self-pay — receive a chest X-ray, every bill that goes out the door would have the exact same price on it."
The difference, Denney adds, is in the reimbursement rate, which he says is the real issue. "The government payers dictate to the hospitals what they are going to pay for the chest X-ray and the managed care/commercial payers negotiate the reimbursement rate with the providers The primary reason reimbursement rates below charges are negotiated from the provider standpoint is to secure volume."
Self-pay options
Denney says it is likely that most hospitals offer discounts — most often based on prompt payment — that apply to self-pay patients. That might mean, for example, that the hospital would negotiate a 20% discount with the patient if the account were paid in full within 30 days, he adds. "The key here is that the patient, if interested in negotiating a discount, needs to contact the hospital to begin those negotiations."
However, Denney notes that it benefits both parties, and indeed is the provider’s responsibility, for the hospital to direct patients to financial assistance programs, such as Medicaid, and if the person does not qualify for that kind of help, to various charity programs. Ideally, the hospital should determine how the self-pay patient is going to pay at the point of scheduling or pre-registration, at least for elective procedures, he says, with referral to a financial counselor if necessary.
As to whether all the attention being given to the billing of uninsured patients will have a negative effect on hospitals’ point-of-service collection efforts, Denney says he believes the answer is no. At least at his facility, he explains, much care is taken to arrange payment options for self-pay patients. "Patients are asked up front how they would like to pay their copays and deductibles," he notes. "If they say they aren’t able to pay, they are asked to complete a patient financial statement and, in our case here in Ohio, a Hospital Care Assurance Program, which, given income, number of dependents, etc., determines if they are eligible for this assistance."
Billing advice
As the billing issue heats up, hospital associations across the nation are advising their members on appropriate action. The Illinois Hospital Association offers the following advice on its web site (www.ihatoday.org):
• Know how much uncompensated care — charity care and bad debt — your hospital provides to patients without insurance and other patients who do not pay.
• Be prepared to explain how your hospital works with uninsured patients to help them apply for public programs and hospital charity care programs. Be ready to describe how your hospital works with patients who do not qualify for such programs to reach a fair and reasonable payment schedule for their bills.
• Don’t be defensive. Explain that it is standard hospital practice for hospitals to charge all patients the same price for the same service. Federal regulations may need to be changed to allow hospitals to adjust bills for uninsured patients. Let questioners know that charges must be higher than costs if hospitals are to survive and serve their communities.
(Editor’s note: Marne Bonomo can be reached at [email protected]. Joe Denney can be reached at [email protected].)
With growing scrutiny nationwide of how hospitals bill and collect payments from their uninsured patients, access managers and their bosses are taking a look at their self-pay policies and reflecting on how this trend will affect revenue management strategies.
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