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By Kathleen B. Vega
While many hospitals have long provided financial assistance to uninsured or underinsured patients, the concept of charity care has become more formalized in the past five years. Through federal and state legislation—such as New York State's Public Health Law and the proposed Internal Revenue Service requirements for charitable care—hospitals are required to provide free or low-cost care for certain uninsured or underinsured patients. Federal regulations require hospitals to notify patients about the possibility of financial assistance and make these programs accessible and available. Regulations in New York state and several other states go even further by specifying levels of charity eligibility.
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To meet evolving charity care regulations, North Shore-Long Island Jewish (LIJ) Health System has been working to enhance its financial assistance program, ensuring it effectively identifies patients who are eligible. "We recognize that engaging patients is essential to a solid charity care program," says Bob LeWinter, vice president of Regional Claims Recovery Service—a division of North Shore–LIJ. "A hospital can provide information about, communicate about, and suggest charity care, but if the patient does not respond to the hospital's overtures, then there is little the hospital can do."
To ensure that it fully engages patients, the 16-hospital health system, located across Long Island and New York City, takes a multipronged approach to charity care―using proactive, interactive, and presumptive methods. The tactics have contributed to a dramatic increase in the number of engaged North Shore–LIJ patients who are receiving financial assistance or charity care.
"When we first started looking at our charity care program, we realized we needed to front load the process as much as possible and identify as many patients as we could early on," says Patti Drolet, vice president of finance for North Shore–LIJ. "People are scared when they come to the hospital, and the financial assistance conversation must be treated delicately. We try to position ourselves as a helping partner, so we reach out to people early to determine their financial assistance needs."
The health system identifies individuals with limited or no insurance during registration. A trained financial adviser then comes to the patient's bedside to discuss financial options. If this is not possible, the patient's family is encouraged to come and meet with the counselor in his or her office.
The first priority is to determine whether patients are eligible for Medicaid or other federal and state assistance programs, and if they are, help the patients apply for these programs. "Our goal is get patients on some type of insurance so that they can have coverage not only for the current visit, but for any future interactions with the health system," says Drolet.
"If the patient is not eligible for a state or federal assistance program, we offer charity care and help the patient complete an application. We have a fairly comprehensive program. A patient with a household income up to 500 percent of the federal poverty level may be eligible for some form of charity care. Of all the patients to whom we provide charity care, patient responsibility hovers around 7 percent of total charges."
To further educate patients and families about the availability of charity care, the health system also has signs and posters hanging throughout the facility, in the emergency department, and in off-site clinics. "Even if they don't meet with a financial counselor right away, we want patients to be aware of the financial assistance option so that, when we reach out to them after they leave the hospital, they are familiar with the concept," comments Drolet.
"As much as we reach out proactively to our patients, we don't capture all eligible patients in this way," says LeWinter. "Many patients who might be eligible for financial assistance don't initially seek it. They sometimes don't fully appreciate the need for assistance until they receive their bills. Then, they reach out to us and ask for help."
Making it easy for patients. To best address the needs of these patients, North Shore-LIJ has a robust website that describes the charity care program and includes an application. Information is offered in several different languages to accommodate North Shore-LIJ's diverse patient population. There is an easy-to-use chart on the website that allows patients to quickly determine if they qualify for charity care or other financial assistance (see the exhibit below). "After determining eligibility, patients can then print an application, complete it, and mail it in," says LeWinter.
Using data analytics. While this approach captures more eligible patients, North Shore–LIJ has also begun leveraging data analytics to further and more efficiently identify possible targets. "In 2008, we turned to a credit bureau and data analytics company to help us develop a methodology for identifying potential charity care patients," says LeWinter. "The algorithm looks at patient income and family size as well as other factors, including the collectability of the account and other credit information."
One interesting component in the algorithm is the patient "tipping point." Several years ago, the credit bureau analyzed more than 50,000 patient accounts from North Shore–LIJ to determine the point at which a patient's bill overwhelms a family, making payment impossible (see the exhibit at right). "Based on its analysis, the credit bureau calculated that when a bill represents more than 4 percent of a family's income, the bill becomes unmanageable," comments LeWinter. "We use this tipping point as part of our toolkit for finding patients who are eligible for financial assistance programs or charity care."
Streamlining the process. North Shore–LIJ uses the algorithm in creative ways. "When patients call about financial assistance, our customer service representatives ask about their incomes and family size," says LeWinter. "At the same time, the representatives look at the patients' analytics. If the patient's reported income and family size are in the same range as the analytics we have for the patient, the customer service representative processes a charity care application for the patient over the phone. If possible, the representative also collects the patient's portion of the bill right then and there."
North Shore–LIJ has found that this approach streamlines the charity care effort, allowing the health system to transition patients to charity care more efficiently. "Historically, we have had a 40 to 50 percent abandonment rate once we send a charity care application," notes LeWinter. "Basically, we send an application and the patient never fills it out. By accepting applications and approving patients over the phone, we can get patients into charity care quickly before they lose interest or become overwhelmed." As a result of this process, North Shore–LIJ's most recent abandonment rate holds at approximately 5 percent.
If the information reported by the patient and the data from the algorithm are markedly different, North Shore–LIJ sends the patient a charity care application to complete. "We never use the algorithm to exclude a patient from charity care," comments LeWinter. "We only use it to expedite the application when possible."
In some cases, patients who are unable to pay their bill do not respond to proactive charity care or take the initiative on their own to seek financial assistance. These patients repeatedly ignore bills and other communications from the health system. "We have refined our charity care process to better work with patients who are not cooperative," comments LeWinter.
North Shore–LIJ analyzes patient bills that are up to 240 days past due. "These are the patients who have gone through primary and secondary collection efforts, but we have not heard anything from them about paying their bills," says LeWinter. "At this point, we have sent them eight or more written communications about their bills and made several phone calls.
"We use our credit bureau's algorithm, as well as a soft credit inquiry-one that does not impact the patient's credit score-to check if the patient qualifies for financial assistance or charity care. If he or she does, we place the patient in charity care despite his or her lack of communication or cooperation. These are patients who qualify for charity care so we want to make sure they receive it. Presumptive eligibility charity care is an accepted industry practice. Eligibility is assigned without patient involvement."
North Shore–LIJ has experienced significant growth in its charity care program. In 2005, the health system approved approximately $17 million in charity care via applications. By 2011, the health system was approving more than $150 million per year from both applications and telephone approvals (see exhibit at right). "The huge increase is attributable to the growth of our health system as well as introducing interactive approvals via the telephone," comments LeWinter.
The charity care program has also effected North Shore–LIJ's bad debt numbers. "Certainly identifying eligible patients and transitioning them to charity care has had a positive effect on our bad debt; however, that effect has been tempered by the downturn in the economy," comments LeWinter.
By using a three-pronged approach—proactive, interactive, and presumptive charity care—North Shore–LIJ has streamlined its charity care process, complying with state and federal guidelines, better serving the needs of patients, and acting as a partner to patients by helping them meet their financial responsibilities.
Kathleen B. Vega is a freelance healthcare writer and editor, La Grange, Ill. (email@example.com).
Interviewed for this article: Patti Drolet, vice president of finance, North Shore–Long Island Jewish (LIJ) Health System, New Hyde Park N.Y. (firstname.lastname@example.org).
Bob LeWinter, vice president, Regional Claims Recovery Service, a division of North Shore–LIJ, New Hyde Park, N.Y. (email@example.com).
North Shore-LIJ's Financial Assistance Poster
North Shore-LIJ's Financial Assistance Application Form
Publication Date: Monday, December 03, 2012
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