A strong focus on educating consumers about their options for coverage could help hospitals offset the impact of reform on their margins.

At a Glance

Hospitals should prepare for the health insurance marketplaces by:

  • Educating patient access staff and clinicians on how the marketplaces work, how to determine eligibility, and how to articulate the coverage options available
  • Working with other key stakeholders, such as community service organizations, to assess consumers’ eligibility for the marketplaces and assist with enrollment
  • Improving pricing transparency
  • Assessing opportunities to work with vendors on marketplace education and enrollment

One area that surely will experience a significant impact from reforms included in the Affordable Care Act (ACA)—particularly the new health insurance marketplaces, set to begin enrollment on Oct. 1—is the hospital revenue cycle.

Soon, front-end revenue cycle staff will come face to face with consumers who have questions regarding the insurance marketplaces, also known as the exchanges: What are the insurance marketplaces? Who is eligible? How can consumers enroll? 

As uninformed as many revenue cycle staff may be about the new marketplaces, surveys indicate consumers know even less. The Obama administration and several allied outside organizations launched enrollment initiatives this past summer aimed at increasing awareness of the marketplaces and the expanded Medicaid access that many states will begin to offer next year. But according to a June poll by the Kaiser Family Foundation, 55 percent of the uninsured had never heard of the exchanges. Meanwhile, only about one-quarter of the young adults needed to ensure successful launches of the marketplaces next year are even aware of them, according to survey results released in August by the Commonwealth Fund.

For hospitals, therein lies the challenge. “Providers should consider the low level of understanding of the ACA and the coverage options available as a sign that there’s a real need for them to reach out creatively, help people understand their options under the insurance marketplaces, and get them enrolled,” says Chad Mulvany, HFMA’s director of healthcare finance policy, strategy, and development. “Organizations that do not form strategies around helping eligible consumers access the insurance marketplaces will continue to unnecessarily carry bad debt and charity care expense for these patients.”

How can hospitals best educate consumers about the insurance marketplaces and support them in enrollment? Strategies of several progressive organizations provide insight.

Focus on Training Front-Line Staff

From California to New York, the approaches hospitals are taking in preparing for the marketplaces are partly dependent upon whether the state in which they are based independently developed a marketplace, left planning and implementation up to the federal government, or worked jointly on development with the government.

California, for example, was an early developer of an insurance marketplace. The state has the highest number of uninsured under the age of 65, according to 2011 figures from the California Healthcare Foundation. This past July, the California Hospital Association developed a step-by-step guide for helping hospitals determine whether uninsured patients are eligible for either Medi-Cal or private health insurance through the state’s insurance marketplace, known as Covered California. 

Meanwhile, Texas—which according to 2010 U.S. Census figures has the highest rate of uninsured in the country— will neither develop nor promote an insurance marketplace, making preparation for the marketplaces that much more challenging for the state’s hospitals. “The key challenge is the public’s understanding and need for guidance,” says Angela Khan, regional director of patient access for Baylor Health Care System, Dallas. “As a healthcare organization, we are committed to assuring that our patients and the broader community that we serve has resources that can assist in educating and enrolling individuals in the federal marketplace. We are evaluating our role in this effort to determine how we can best meet the needs of the community. 

“A key focus is ensuring we have resources with expertise and a strong knowledge base that can provide guidance and assist in the enrollment process,” Khan says. “Both internal resources and our eligibility vendor will be committed to this effort.” 

Hospitals in all states should focus on community outreach and on educating staff as well as consumers. They should carefully consider which populations they most want to reach and how they can partner with community organizations, payers, or employers to reach these populations.

Training may be structured or informal, depending upon the size of the organization. Some hospitals may choose to use outside vendors to teach protocols and processes.

“You can’t just put your people on the front lines and expect them to know what to do. You’re going to have to invest in improving their knowledge,” says Anne McLeod, senior vice president of health policy for the California Hospital Association, who initiated the California marketplace guide project. “With education, employees will develop an understanding of the patchwork of options of coverage that are available and will be able to use this knowledge in supporting uninsured individuals in making choices that best meet their healthcare needs.”

Centra Health in Lynchburg, Va., received approval to become a certified application counselor organization. About 20 percent of the health system’s 106-member patient access staff will become certified application counselors, who will receive formal training on helping community members learn about coverage options available through the marketplaces. Heading into the fall, Centra Health, a three-hospital system with about 700 beds, was about 80 percent prepared for the marketplaces, says Melissa Viohl, Centra’s director of patient access.

“It’s important that we educate our revenue cycle staff to understand the implications of the exchanges, Medicaid expansion, and the ACA in general and the ways in which reform ultimately affects our workflows,” Viohl says. At Centra, education is provided not only to financial counselors and registration staff, but also to customer service staff, given that patients could raise questions at various access points. At some point, education will be extended to nurses and other clinicians as well. (See the exhibit below regarding a survey that indicates physicians and nurses are patients’ most trusted resource for information on the ACA.) “Preparing for the exchanges is not just a revenue cycle-driven project,” she says. “It requires input and assistance from team members at points of access as well as points of care.”

Exhibit 1


To assist consumers with accessing the online marketplaces, Centra will place computer workstations at various patient access points at the hospitals so consumers can self navigate through information on the health system’s financial policies and the insurance marketplaces and access the Centers for Medicare & Medicaid Services web site for information on Medicaid, Viohl says. This approach will require that registrars in the emergency department and financial counselors be trained on how to use the technology.

All patients also will receive a copy of Centra’s financial aid policy, presented in simple language to foster understanding at all comprehension levels. 

Exhibit 2


Extend Education Through Community Outreach

Education initiatives should extend beyond the four walls of the hospital and into the community. The better educated consumers are about their options under the ACA, the more likely they will be to leave the ranks of the uninsured, McLeod says.

“We recommend that hospitals reach out to their communities—whether through religious organizations, community groups, or schools—to foster greater understanding of the marketplaces to the extent that resources are available to support such efforts and opportunities exist to make a difference through outreach,” McLeod says.

Henry County Health Center (HCHC), a 25-bed critical access hospital in Mount Pleasant, Iowa, is planning to do just that. Through a contract with the county, HCHC manages the public health department, which offers clinics where community members can receive care such as immunizations and health screenings. The public health staff are employed by the health center and regularly connect with the county’s uninsured population through their work at hospital clinics and within the community. It’s a natural fit for them to become certified application counselors, educating community members on available coverage options under the marketplaces, according to Dave Muhs, CFO of HCHC. “They already have a built-in relationship with community members to provide the education and support needed,” Muhs says.

HCHC plans to display posters with information regarding the state’s marketplace and will offer brochures about the marketplace at patient registration sites. The health center also is considering hosting a webinar to help spread the word to consumers, says Sara McClure, HCHC’s director of patient financial services.

“We’re trying to figure out where the best fit is within the hospital so we can provide the greatest level of assistance and support to patients and consumers,” McClure says.

Centra recently developed a parish nurse program in which nurses integrate faith and health in providing care and education throughout the community. Centra staff who become certified application counselors for the state’s marketplace will also attend health fairs and other community events, Viohl says.

The benefits of such efforts could be twofold: to help patients gain coverage and to help the hospital provide a new form of community benefit.

Viohl points to recent changes in rules for tax-exempt, not-for-profit organizations that put pressure on not-for-profit hospitals to provide additional proof of the benefit they provide for their communities in exchange for not having to pay taxes. Enrollment efforts, she says, will go a long way to helping Centra demonstrate community benefit.

It is worth exploring whether the hours that a not-for-profit hospital or health system invests in community outreach for marketplace eligibility and enrollment help to fulfill the organization’s community benefit requirements. “Certainly, hospitals should track the hours they spend on such initiatives and the number of people who have signed up for the marketplaces as a result of their efforts,” Mulvany says. “There is no question that such activities constitute a community benefit and enrollment assistance (and related costs) is counted toward community health improvement services.”

Renewed Emphasis on Pricing Transparency

In the midst of helping patients and community members understand their coverage opportunities, hospital registration and patient financial services staff will be dealing with another complicated question from consumers: “What is this service or procedure going to cost?”

More and more, patients are requesting information on hospital charges before or at the point of service—and they expect hospitals to provide an answer.

As consumers, employers, and payers push for increased price transparency, Viohl says Centra Health is ready. The health system has about an 86 percent preregistration rate, and every preregistered patient receives an estimate of the cost of the care or service that will be delivered, Viohl says. To develop accurate price estimates, Centra uses an in-house estimation tool that incorporates data from payer contracts to provide patients with such information as estimated cost of service, the insurance negotiated rate, full average charge, and average reimbursement by payer. The challenge still lies in pricing surgeries and infrequently performed outlier procedures, she says

Hospitals would do well to emulate the example of Centra and other progressive organizations in responding to the call for increased price transparency, particularly as the insurance marketplaces gain traction.

“If we’re going to enroll 7 to 20 million people into these marketplaces, I would assume the demand for pricing information is going to outstrip most hospitals’ ability to respond,” says Art Sturm, president and CEO of SRK, a Chicago-based healthcare consulting firm.

Hospitals must devise price lists or at least ranges, Sturm says, so they can respond to the expanded need for price shopping and prepare registration and patient financial services staff for managing the sticker shock that he believes most enrollees will express.

“Independent surgical centers in many markets are now coming out with price lists to compete directly against hospital-based services,” Sturm says. This movement is forcing hospitals to offer similar price lists of their own, “And they’re finding it very difficult to do,” Sturm says.

To achieve transparency, Sturm says hospitals must have confidence in their cost data. If they do not, hospitals can used blended rates from their managed care pricing, although Sturm realizes that the willingness to use such information so openly may be challenging.“It’s a brave new world, to say the least,” he says.

Mission Versus Margin

Not everyone believes hospitals should play an active role in helping consumers determine their eligibility for and enroll in the insurance marketplaces.

Sturm, who has been studying the role of hospitals in building the marketplaces, believes that hospitals should be wary of actively investing resources in enrolling any patients. That, he says, is the role of health insurers.

“I don’t think it’s a good use of hospital dollars,” he says. “The initial issue for hospitals is to figure out how to get people who have enrolled to become customers for the hospital.”

Instead, from a business standpoint, Sturm believes hospitals should be more guarded in terms of who they actively seek to enroll. For example, in states that chose not to expand Medicaid, the self pay population should hold particular appeal, he says.

“There can be some real solid selective economic opportunities there,” he says.

Sturm suggests hospitals should “run the numbers”—analyze their self-pay populations to discern which segments are most likely to provide positive margins if they were to enroll in the marketplaces, looking at factors such as age, service line, or reimbursement through the marketplace offerings. “We’re finding a positive ROI in actively reaching some age cohorts to provide assistance in entering the exchanges will not be high, but there are some populations that utilize service lines for which margins under an exchange rate might be favorable. Those populations are certainly ones we’d like to reach,” he says.

Providers also should reach out to “frequent fliers” to provide information related to the marketplaces and offer assistance with enrollment, Mulvany says. Additionally, they may wish to investigate whether providers are allowed to assist frequent fliers with payment of premiums for marketplace coverage.

For some hospitals, determining which age groups and patient populations to reach through insurance marketplace outreach efforts may depend upon the level of return the hospital expects to receive. Although the segments of uninsured that will generate revenue for hospitals once they participate in the insurance marketplaces will be small, the resulting revenue may be sufficient to justify the effort. “I wouldn’t automatically reach out to all self-pay patients. I would be very selective in doing so,” Sturm says. “I think the challenges with promoting the insurance marketplaces to self-pay patients are not so much in getting their attention, but in actually getting the business and getting paid for it once you do.”

Others strongly disagree with a selective approach to insurance marketplace outreach. “This isn’t about whether the hospitals get paid; this is about improving access to health care for individuals, reducing healthcare costs, and moving forward to help implement healthcare reform and reduce the number of uninsured,” McLeod says.

And even low levels of payment could prove attractive in the long run for organizations that treat large numbers of uninsured patients. “Under IowaCare—the previous state-run insurance program designed for uninsured residents who did not quality for Medicaid—patients had to travel 50 miles to receive care. If they did happen to come to Henry County Health Center, we received virtually no payment for services rendered because the program didn’t cover local health care,” says Muhs of Henry County Health Center. “This will change under the new program as we anticipate not only improved reimbursement, but more important, greater access to local health care for patients. This is a positive effect of the marketplaces for our community and those we serve.”

Remaining Mindful of What Is at Stake

Hospitals and health systems should accept that the health insurance marketplaces are a sign of the times and develop strategies now to support education and enrollment for the uninsured—both for the good of their communities and the financial health of their organizations.

Hospitals do assume a certain amount of risk in devoting resources to helping to educate and enroll uninsured patients in the marketplaces. Simply spending the money to educate and enroll uninsured patients does not guarantee they will become a hospital’s loyal customers: The patients could just as easily decide to go to a different hospital. But wherever they chose to go, it’s better for the provider community as a whole if they are insured—especially given that hospitals have made a significant financial contribution to coverage expansion (regardless of whether it happens) through rate cuts.

Karen Wagner is a freelance writer specializing in health care, Forest Lake, Ill., and a member of HFMA’s First Illinois Chapter.


Resources for Educating the Uninsured

The final navigator rule issued by the Centers for Medicare & Medicaid Services opens the door for hospitals, health systems, and others to play a role in educating patients about the health insurance marketplaces—either by offering assistance services themselves or by referring patients to appropriate services. (See a detailed summary)

The final rule allows for three types of assisters who can help consumers enroll in the health insurance marketplaces, beginning this month: navigators, non-navigator assistance personnel, and certified application counselors.

Navigators help the uninsured obtain coverage through either Medicaid or the individual and small group marketplaces. They explain coverage options without encouraging applicants to select any specific option. Providers may function as navigators.

Non-navigator assistance personnel provide generally the same services as navigators, but within a state-based marketplace or state partnership marketplace.

Certified application counselors are only required to provide assistance with activities related to enrollment; however, they are not precluded from conducting community outreach.

Navigators and non-navigator assistance personnel can be funded with grants—either federal or state grants, depending on what type of exchange is operating in a particular state. Certified application counselors are not eligible to receive funding/grants through the federal or state exchanges.  

Recently, the U.S. Department of Health and Human Services awarded 105 navigator grants to organizations in the 34 states in which the federal government will operate all or part of coming health insurance marketplaces. Awardees included a range of community and advocacy organizations, including four health systems and four hospitals.

Payers also are joining efforts to provide education regarding the Affordable Care Act (ACA) and reform-related initiatives, including the insurance marketplaces. 

For example, this past March, Blue Cross and Blue Shield of Louisiana (BCBSLA) launched the Louisiana Healthcare Education Coalition (LHEC), a not-for-profit organization made up of members who are interested in either disseminating or acquiring information about the ACA. Partners in LHEC include not-for-profit, religious, and employer groups and a few hospitals, according to BCBLA spokesman John Maginnis.

The LHEC site is geared toward guiding both Louisiana businesses and individuals through the ACA and, more specifically, the insurance marketplaces. The state has an estimated uninsured population of 938,000, according to the LHEC.

Fifty trained speakers are available through the LHEC to give tailored presentations to Louisiana organizations, including hospitals, on the ACA and its ramifications. Online resources include a newsletter and member blogs.

“I think LHEC would be ideal for hospitals to use to disseminate information to their employees and also to their patients,” Magginis says. “There’s a big void out there still, a tremendous informational void having to do with the ACA.”

Preparing for the marketplaces also includes ensuring that technology vendors are able to meet demands related to application processing and eligibility determination. Otherwise, hospitals seeking to provide assistance will experience problems at the front end of the revenue cycle, such as delays in automated processing that could require staff to resort to the use of telephones and faxing to complete the application process. Such delays also could require additional FTEs to provide support for the uninsured.

"That’s kind of where my challenge is: making sure our third-party insurance eligibility vendor is staying on top of all the insurance marketplace requirements,” says Melissa Viohl, director of patient access for Centra Health in Lynchburg, Va. “So I keep pressing my vendor: ‘Are you guys on top of this? Are you going to be ready to provide us with the service we need to do our jobs come Oct. 1?’”

Viohl says one of Centra’s Medicaid eligibility vendors has applied to become a navigator, providing enrollment guidance and support for patients and consumers. “I think it will be important for the vendors to do this kind of work themselves or to establish relationships with navigator organizations,” she says.

So, too, does Angela Khan, regional director of patient access for Baylor Health Care System, Dallas, which has 27 owned, leased, or affiliated hospitals in the Dallas area. Baylor already relies on its third-party eligibility vendor to help its uninsured population find coverage or subsidized care, Khan says. The health system has about 26 vendor representatives who work on site at Baylor facilities to help patients enroll in programs and provide assistance to hospital financial counselors in educating patients on the marketplaces. “We’ve been proactive in having our vendor work with us on that piece,” she says.

Publication Date: Tuesday, October 01, 2013

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