January 26, 2005
To better serve patients, many hospitals are evaluating their discounting and collections policies and practices for services to the uninsured and underinsured. The Patient Friendly Billing project has just published a new report, Hospitals Share Insights to Improve Financial Policies for Uninsured and Underinsured Patients. The report explores seven key questions that hospital leaders may find useful to keep in mind when reviewing their financial assistance policies. It also provides tools and practical ideas to help hospitals and health systems revise their policies and procedures and implement those revisions quickly and effectively.
Key Questions to Address When Evaluating Policies
Hospital leaders must address numerous significant issues when reviewing or changing current policies and practices related to discounting and collections for care provided to uninsured and underinsured patients. Following are some questions hospitals can use as tools to guide this process. By addressing these questions, hospitals can develop responsible, balanced policies and practices:
- Who qualifies for discounted or free care?
- What services are discounted?
- What discount levels are offered?
- How are policies communicated?
- How are unpaid patient accounts resolved?
- What structures and systems are in place to implement and administer policies effectively?
- What is the relevant legal and regulatory context?
Lessons Learned by Hospitals that Have Revised Their Policies
Interviewed hospitals that recently have made changes to their policies offer the following advice for other hospitals contemplating policy changes.
Policy Characteristics:
- The most effective policies are simple and clear and written with the patient in mind.
- It is helpful if the policies allow some flexibility; for example, permitting a discount when a patient's recent pay stubs indicate income slightly over the guidelines, but the patient says his work hours have recently been reduced.
Involvement of Others:
- Including the community in the process can lead to success.
- Hospitals that involve eligibility vendors, collection agencies, and other process stakeholders in designing policies and procedures have fewer implementation problems.
Training, Implementation, and Monitoring:
- Implementation plans need to allow sufficient time to develop and test patient education materials and to conduct necessary staff training.
- Hospitals that train front-line staff to discuss payment before the patient leaves the hospital (particularly for prescheduled services) can minimize the need for collection activities.
- An extended business office can focus on self-pay accounts, be responsive to uninsured patients' needs, and promote effective policy implementation.
- Hospitals may find it helpful to track and analyze the impact of policy changes; automated solutions can support this process.
Effects on Patients:
- Hospitals can increase the insurance coverage available to patients by helping them apply for third-party coverage.
- Hospitals can help patients not eligible for governmental health insurance programs obtain COBRA coverage or may consider paying COBRA premiums for patients, although hospitals should check with their counsel first to ensure that such action would not violate state laws.
- Hospitals can better help patients through the process if patients believe that bills and payment arrangements are reasonable.
Importance of Action:
- All hospitals should recognize that this is an important issue; if hospitals do not act responsibly, lawmakers may act for them.
This Patient Friendly Billing project report was developed through interviews with hospitals and health systems and input of state hospital associations. The information provided is anecdotal and based on the experiences of the hospitals interviewed for the project. Individual hospitals should use the report and tools within the context of their own institutional and community circumstances.
SOURCE:
Hospitals Share Insights to Improve Financial Policies for Uninsured and Underinsured Patients: A Report from the Patient Friendly Billing Project.
Additional Resources
- The online version of Hospitals Share Insights to Improve Financial Policies for Uninsured and Underinsured Patients: A Report from the Patient Friendly Billing Project includes extensive cross-references to useful tools and information available on the Internet.
- The Patient Friendly Billing project web site.
If you have questions or comments about HFMA Wants You to Know, contact editor Laura Noble at lnoble@hfma.org.
HFMA Wants You to Know ISSN: 1540-0697. Volume IV, Issue 2. Copyright 2005, Healthcare Financial Management Association. All rights reserved.