By reaching out to uninsured and underinsured patients across the continuum of care, Pittsburgh-based UPMC has increased point-of-service collections, increased financial assistance referrals, obtained medical assistance for many patients, and reduced bad debt.
At a Glance
UPMC has improved its patient financial advocacy by:
- Establishing a patient financial services center
- Developing processes and tools to identify uninsured and underinsured patients across the continuum of care
- Positioning itself for changes resulting from Medicaid expansion, insurance exchanges, and the growing self-pay population
UPMC has taken a proactive, patient-friendly approach to communicating with patients about their financial responsibility through an integrated revenue cycle model. By implementing new strategies, the system has increased patient cash from an average of $16 million per month in the third quarter of 2012 to an average of $20 million per month since March 2013. UPMC also has significantly reduced bad debt and enhanced patient relationships through greater financial advocacy.
Providing Assistance Across the Continuum of Care
In January 2013, UPMC launched a centralized patient financial services center, which had been in development for many years. The center is the hub for the health system’s patient financial advocacy program, which enables caregivers and patients to access financial services, including payment options and financial counseling. What differentiates the program from many others is that these services are available across the entire health system to patients who receive inpatient and outpatient services at more than 600 registration sites and 21 hospitals that are part of UPMC.
As UPMC set out to create this center and develop new financial advocacy processes, one priority was to identify uninsured and underinsured patients earlier so arrangements for assistance can be routinely developed before the patients receive care. Accomplishing this objective required integrating financial advocacy and counseling across the continuum of care. To that end, UPMC established processes and procedures at four key phases along the care continuum:
- Day of service
Scheduling. When patients schedule services at UPMC, scheduling agents use an eligibility tool to verify insurance eligibility. Using scripts, the agents welcome and provide general education to patients on their financial responsibility for any copayments, coinsurance, or deductibles. The agents refer uninsured or underinsured patients to the patient financial services center to evaluate their eligibility for medical assistance (Medicaid), UPMC financial assistance (charity care), or other programs designed to assist patients with payment.
Pre-arrival. Before patients arrive at a UPMC site for service, revenue cycle staff use a web-based eligibility tool developed in-house to verify insurance coverage, noncovered services, benefit maximums, benefit limitations, patient responsibility, and procedures requiring authorization. For patients who are uninsured or underinsured (i.e., their services are not covered or their benefits have reached their maximum), revenue cycle staff complete brief financial assessments to identify eligibility for either medical assistance or UPMC financial assistance. To make sure these patients do not fall through the cracks, revenue cycle staff refer patients for further follow up by representatives at the patient financial services center.
Day of service. At check-in and checkout, agents conduct additional brief financial assessments on uninsured and underinsured patients to identify potential eligibility for medical assistance or UPMC financial assistance. If patients express a concern about their bills and do not meet guidelines for medical assistance or UPMC financial assistance, agents schedule follow-up calls with financial counselors from the patient financial services center or the customer service department.
Post-service. After service, self-pay patients are categorized into one of five segments according to their propensity to pay. The segments, which are determined through vendor scoring and payment history, include:
- High propensity to pay, based on previous payment at UPMC or through a collection agency
- Medium propensity to pay, for new patients or those on payment plans
- Low propensity to pay, based on a history of no payment
- All balances less than $100 (for the hospital only)
- Financial assistance, either approved or under application
This segmented approach allows UPMC to tailor its approach to collection, using a variety of tools and assigning resources differently according to which approach is most effective. So far, this strategy has improved UPMC’s payment success rate. The hospital corporate revenue cycle currently receives payments from 70 percent of its high-propensity accounts and 58 percent of its medium-propensity accounts.
Targeting Patients in Need
Another goal of integrating financial advocacy throughout the continuum is to be more proactive in determining a patient’s eligibility for assistance. This approach allows UPMC to provide appropriate financial counseling, reduce bad debt, and minimize financial risk to the health system and to patients.
Financial counselors reach out to the following individuals:
- Uninsured patients
- Underinsured patients
- Auto accident, workers’ compensation, and Medicare Part A patients without secondary insurance
- Individuals who have been eligible for medical assistance within the past two years
- Pregnant women
- Parents or guardians of children with chronic conditions
By taking this proactive approach, UPMC can ensure that it is making every effort to help patients receive the care they need.
Evaluating Eligibility for Medical Assistance
Before considering patients for financial assistance, UPMC evaluates their eligibility for state medical assistance. Early identification is important because most states, including Pennsylvania, have a 90-day retroactive eligibility period.
UPMC uses selected vendors to assist inpatients in applying for medical assistance. To assist outpatients, the system has created an internal medical-assistance eligibility team. Staff in the patient financial services center complete and submit the medical assistance application on the patient’s behalf and act as a liaison with the medical assistance office, ensuring that applications are submitted quickly and completely—and easing the burden on patients and caregivers.
Three years ago, UPMC developed a unique web-based tool to help facilitate the medical assistance eligibility process, which can be rather cumbersome in Pennsylvania. As the system was revamping its processes, difficulty in tracking applications emerged as a stumbling block. The web-based tool helps UPMC monitor the application process and ensure that follow-up is performed. Since FY10, UPMC has experienced a 49 percent increase in the average number of referrals to medical assistance and a 32 percent increase in the referral approval rate, as shown in the exhibit below.
In addition, more patients are receiving assistance overall. In FY12, UPMC referred 12,514 patients to medical assistance, and of those, 58 percent were approved. Of those denied medical assistance, almost 87 percent received financial assistance.
Evaluating Eligibility for Financial Assistance
As soon as UPMC determines that an uninsured or underinsured patient is not eligible for medical assistance, the patient is evaluated for eligibility to receive financial assistance. UPMC’s financial assistance program, which covers patients who earn up to 400 percent of the federal poverty level, is widely promoted. Patients may be eligible for financial assistance for medically necessary services if they meet the following criteria:
- Have limited or no health insurance
- Can demonstrate financial need
- Live in the primary service area of a UPMC provider
- Provide the health system with information about their household finances
UPMC does not make financial assistance available for copayments, unless the balance is a hardship (the balance owed is equal to or more than 15 percent of net income). UPMC also typically does not make financial assistance available for patient balances consisting only of copayments or when a person fails to comply reasonably with insurance requirements (such as obtaining authorizations and/or referrals), or for patients who opt out of available coverage, and nonresident, nonemergency international patients.
Specialists in the patient financial services center work with patients to complete applications and collect documentation needed to determine their eligibility for financial assistance. To help staff manage this process, UPMC developed another workflow tool that assesses the patient’s information against UPMC’s charity care policy, determines the assistance amount, and then submits the application for manager approval. It eliminates manual error, resulting in a more efficient, accurate, and timely financial assistance determination. The tool pulls information from UPMC’s patient accounting system to identify accounts that may be eligible for financial assistance.
UPMC also uses a presumptive charity care scoring tool to automatically determine if uninsured patients qualify for financial assistance. In many instances, patients are unable to comply with the application process. In these instances, UPMC needs to use other tools to assist in determining their patients’ needs. As a result of this tool and new processes, the number of UPMC hospital patients who received financial assistance rose 95 percent from FY11 to FY13. In addition, the dollar amount of financial assistance has risen 6 percent since FY11, as shown in the exhibit below.
By implementing these new patient financial advocacy processes throughout the continuum of care, UPMC has also reduced bad debt. In FY09, bad debt accounted for 52 percent of UPMC’s uncompensated care; today, it accounts for 24 percent. Going forward, the hospital’s target level for bad debt is 15 percent of total uncompensated care (with charity care at 85 percent of total uncompensated care).
UPMC learned the following key lessons from developing this comprehensive patient financial advocacy program.
Get the compliance department involved early. An organization’s charity care policies will provide the template for redesigning the organization’s financial assistance procedures.
Empower staff to be patient advocates. UPMC uses scripts and online training modules to help the revenue cycle staff feel more comfortable communicating with patients about their financial responsibilities. The system openly communicates the availability of financial assistance so an inability to pay will not deter patients from getting the care they need.
Clearly define staff roles and responsibilities. These roles should be expected to evolve. For example, as more patients move to high-deductible health plans, more patients will likely request estimates of care. Organizations should determine who is responsible for making the cost estimate and who is responsible for patient communications related to the estimate.
Be responsive. If a patient is on site and a financial counselor is unable to help or the patient is on site after hours, UPMC’s call center can schedule a phone call between the patient and a counselor at the patient financial services center the next business day. Patients can also visit the center in person during business hours.
Automate. UPMC’s homegrown, web-based tools eliminate potential for manual error, increase staff efficiency and productivity, and reduce paper waste.
Keep a clean revenue cycle. Core revenue cycle processes must be in good order before patient advocacy can make a difference. Errors in insurance verification and/or billing can cause the patient statements to be incorrect and cause undue stress to the patient. The revenue cycle has been described as the “bookends” of patient care, so it is important that these fundamental processes are efficient, connected, and accurate.
Stay focused on the patient. It is easy to get caught up in redesigning systems, implementing new tools, and assigning responsibilities. By focusing on what is right for the patient, the rest will come more easily.
Preparing for the Future
UPMC believes these new processes will help it meet patient needs as the self-pay population grows, while protecting the organization’s bottom line. UPMC also believes these changes will help it manage the growing volume of patients who are eligible for medical assistance and financial assistance due to the Medicaid expansion and the advent of health insurance exchanges.
In 2014, patients’ out-of-pocket financial responsibility is expected to be as much as 32 percent more per family. Even though insurance coverage is expanding through the Affordable Care Act, having “insured” patients doesn’t guarantee full payment. The basic insurance plans offered through mandated coverage still leave the patient with up to 40 percent of the total responsibility for a hospital bill.
To better serve patients in this changing environment, hospitals and health systems should proactively inform patients about their financial responsibility for care and services received and seek out tools that enable a better patient experience. Examples of the latter include patient estimator tools and more options to assist with electronic and automatic payments. Hospitals and health systems also should prepare to take on more of an advocacy role for patients who need assistance. By doing so, they will likely enhance their relationship with patients and improve their financial metrics as well.
April Langford, CPA, is vice president, finance, for UPMC and CEO of Prodigo Revenue Cycle Services, Pittsburgh. She is a member of HFMA’s Western Pennsylvania Chapter.
UPMC At a Glance
- Number of hospitals:21
- Licensed beds: More than 4,500
- Clinical locations: More than 400
- Cancer centers: More than 35
- Behavioral health locations: More than 50
- Retirement/long-term care locations:17
- Hospital/outpatient rehab locations: More than 70
- Annual inpatient admissions: More than 253,000
- Annual outpatient visits: More than 3.6 million
- Annual surgeries: More than 174,000
- Annual emergency visits: More than 600,000
Publication Date: Sunday, September 01, 2013