Boston Medical Center, which has nearly six years of experience with its state health insurance marketplace, found that many patients need help understanding how to acquire and maintain health coverage.
When federal- and state-run health insurance marketplaces (formerly known as exchanges) begin operating, many uninsured patients will gain health coverage—a big boon for the hospitals that serve them. But revenue cycle leaders must prepare for additional administrative tasks that will come with those patients newly eligible for health coverage.
Deed McCollum, patient finance manager at Boston Medical Center (BMC), learned that first hand when Massachusetts introduced its marketplace in 2007. Hospitals need to be prepared to educate newly insured patients about how to obtain and maintain insurance coverage, she says.
“Many of these patients never had health insurance, so purchasing insurance was an entirely new concept. They didn’t know they had to select a health plan and pay premiums, and they didn’t pay attention to the letters with instructions about determining their insurance eligibility,” she says. “These patients will come out of coverage again and again if you don’t educate them about the process and their responsibilities.”
What Marketplaces Will Do
The federal government defines a health insurance marketplace this way: “a state-based competitive marketplace where individuals and small businesses will be able to purchase affordable private health insurance.” Although each state will have its own health insurance marketplace, some marketplaces will be operated wholly or in part by the federal government, as detailed in a map developed by The Kaiser Family Foundation.
According to current plans, marketplaces are supposed to start enrolling members on Oct. 1 of this year for coverage that can start on Jan. 1, 2014. The marketplaces will:
- Provide consumer information on qualified health plans in a standardized format for easy comparison
- Determine an individual’s eligibility for insurance via the marketplace, tax credits, and cost-sharing reductions for private insurance and other public health coverage programs
- Offer an electronic calculator that allows consumers to determine the cost of coverage after premium tax credits and cost-sharing reductions are applied
- Help eligible individuals enroll in the plan of their choice
- Determine if an individual is exempt from the requirements to carry health insurance and grant approvals to individuals who have hardship or other exemptions
- Establish a navigator program to help consumers choose among their healthcare options and enroll in coverage
The insurance plans offered on the marketplaces will be bucketed into four categories:
- Platinum plans (the highest premiums and the lowest deductibles, copayments, and coinsurance)
- Bronze (the lowest premiums and the highest out-of-pocket responsibility)
Consumers will be able to access the marketplaces by telephone or via a website. Although one of the key objectives of the marketplaces is to make choosing and enrolling in health insurance easy, Richard Silveria, BMC’s senior vice president and CFO, says many lower-income patients may find it difficult to use the health insurance marketplace websites. “They either don’t have web access or they don’t do much web commerce, so it’s not always intuitive to them,” he says.
The draft version of the application (Appendix D under the “Downloads: CMS-10440”) to purchase insurance is about 8 pages long, while the financial assistance application (Appendix C under the “Downloads: CMS-10440”) is approximately 21 pages long and includes terminology about insurance that may be challenging to patients who have never been insured before. In 2014, HHS expects to receive more than 4.3 million applications for financial assistance, according to an Associated Press report.
The Centers for Medicare & Medicaid Services released two videos that demonstrate the web-based marketplace application process for an individual and for a family of three.
Helping Patients Enroll
BMC is a safety-net hospital that has about 1 million outpatient encounters per year. When the Massachusetts Health Connector came online in 2007, BMC nearly doubled its financial counseling staff from 11 staff members to 21.
The financial counselors went through training provided by the Connector as well as BMC’s own health insurance marketplace training curriculum. A script was developed to help financial counselors interact with patients efficiently. Financial counselors were also coached on how to find answers to patients’ questions.
With the goal of getting coverage for as many patients as possible, BMC placed financial counselors in areas around the campus where they had not traditionally had a presence. “Many self-pay patients were used to coming to the emergency department for healthcare services, so we wanted to make sure that we were converting them to insurance,” McCollum says. “We had to make ourselves available throughout the hospital campus.”
All uninsured patients at BMC were referred to a financial counselor, who generally spent 30 minutes or more educating them about their insurance options and helping them to apply. As an increasing number of patients gained coverage and learned to handle the responsibilities that come with insurance, the need for the additional counselors lessened. After about two years, BMC started reducing the size of its financial counseling staff through attrition. Today, the medical center employs 11 counselors, the same number it had before the health insurance marketplace was established.
In Massachusetts, hospital financial counselors also play a big role in educating patients about how to keep their coverage and how to use the healthcare system wisely. “Hospitals—or any other site where patients receive care—do that best because they have a vested interest in keeping patients in coverage,” McCollum says.
Among other things, patients must be educated about:
- The definitions of premiums, copayments, and deductibles
- The importance of comparing insurance options to choose the best mix of coverage and out-of-pocket responsibility
- Network rules and restrictions (for example, how a plan may limit where medical care can be received)
- Coverage termination when premiums are not paid
- Copayment rules (for example, how receiving care in a physician’s office will require a lower copayment than seeking treatment in an emergency department)
- The necessity of re-applying for coverage each year
- The importance of communicating household changes, such as changes related to income, address, or family members, all of which may affect eligibility, coverage, or out-of-pocket expenses
It is important to educate patients during hospital or outpatient visits because it can be difficult to reach them after they leave, says Silveria. It is anticipated that many of the new enrollees will have low incomes, which may mean they do not have telephone or email access. In addition, some may not realize they need to notify their insurance carriers and healthcare providers if they change addresses.
“When you have the patients in front of you, try to get everything done because you don’t know whether you will have another opportunity,” says Silveria.
Newly Insured Patient Characteristics
As a group, the patients who gain insurance through a health insurance marketplace will be different than those who currently have coverage, according to an analysis by PwC Health Research Institute (Health Insurance Exchanges: Long on Options, Short on Time, PwC Health Research Institute, 2012.)
The Congressional Budget Office estimates that about 12 million Americans will purchase insurance through a health insurance marketplace in 2014, and that number will more than double by 2021. The PwC analysis reports the following common characteristics of people who will enroll in individual coverage via a health insurance marketplace:
- The median age will be 33.
- Enrollees report being in relatively good health.
- The majority are white.
- About 20 percent speak a language other than English at home (compared to today’s insured population, in which one in eight speak another language at home).
- Seventy-six percent of the marketplace-insured population does not have a college degree, compared to nearly 60 percent of privately insured Americans today.
- They will be unfamiliar with the insurance system; about 75 percent will be insured for the first time in 2014.
- The majority—almost 60 percent—will be employed full-time.
- Nearly 90 percent will receive subsidies in 2014 because about 60 percent will have incomes at or below 200 percent of the federal poverty level, which is $46,100 for a family of four.
In BMC’s experience, health insurance marketplace enrollees do not all flock to the lowest-premium insurance option, but many of them do buy a plan that comes with high deductibles and copayments relative to their disposable income.
“The out-of-pocket costs are a challenge to folks,” Silveria says. “As you put more out-of-pocket costs on people who are at the lower end of the pay scale, they have to make some decisions on what bills they pay, and that just puts more credit risk on providers.”
How to Prepare
Silveria identifies several steps that revenue cycle leaders can take to prepare for the health insurance marketplace era:
- Update system applications with the new insurance plans and associated rules when they become available.
- Increase staffing for financial counselors and insurance follow up to allow every uninsured person who comes for services to meet with a financial counselor at the earliest opportunity.
- Establish “application pending” financial classes in your computer system to track the insurance application process and avoid multiple applications for the same person.
- Configure billing systems to produce claims and process payments associated with health insurance marketplace products.
- Ensure that staff and processes are in place to handle the increased workload associated with a greater number of insured patients.
“With self-pay patients, you don’t have to get authorizations and referrals, but when these patients are enrolled, you have the downstream work of making sure those are in place,” he says. “Now you actually have to submit a claim to a payer and then follow up versus maybe writing it off under the charity care policy right away. And now you need staff to handle the patient billing.”
Lola Butcher is a freelance writer and editor based in Missouri.
Quoted in this article (in order of appearance):
Deed McCollum is patient finance manager at Boston Medical Center, Boston (firstname.lastname@example.org).
Richard W. Silveria is senior vice president and CFO, Boston Medical Center, Boston (Richard.Silveria@bmc.org).
Publication Date: Wednesday, March 20, 2013