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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. (
Interviewed for this article: Patti Drolet, vice president of finance, North Shore–Long Island Jewish (LIJ) Health System, New Hyde Park N.Y. (
Bob LeWinter, vice president, Regional Claims Recovery Service, a division of North Shore–LIJ, New Hyde Park, N.Y. (
North Shore-LIJ's Financial Assistance Poster
North Shore-LIJ's Financial Assistance Application Form
Publication Date: Monday, December 03, 2012
In this Business Profile, Bruce Haupt, president and CEO of ClearBalance, discusses how a patient loan program can increase patient collections, reduce bad debt, and speed cash flow.
Patient financial engagement is more challenging than ever – and more critical. With patient responsibility as a percentage of revenue on the rise, providers have seen their billing-related costs and accounts receivable levels increase. If increasing collection yield and reducing costs are a priority for your organization, the metrics outlined in this presentation will provide the framework you need to understand what’s working and what’s not, in order to guide your overall patient financial engagement initiatives and optimize results.
In this Business Profile, Jerry Bruno, principal with Deloitte Consulting LLP, discusses the importance of choosing revenue cycle solutions that help an organization meet the challenges of a quickly evolving healthcare environment.
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Increased electronic engagement between healthcare providers and patients provides significant opportunities for improving revenue cycle metrics and encouraging patients to access EHRs. This article, written by Apex Founder and CEO Brian Kueppers, explores a number of strategies to create synergy between patient billing, online payment portals and electronic health record (EHR) software to realize a high ROI in speed to payment, patient satisfaction and portal adoption for meaningful use.
In this business profile, sponsored by SSI, Jay Colfer, vice president of sales and marketing, shares how patient access solutions are reversing the trend toward increased bad debt resulting from the rise in high-deductible consumer health plans.
Faced with a rising tide of bad debt, a large Southeastern healthcare system was seeing a sharp decline in net patient revenues. The need to improve collections was dire. By integrating critical tools and processes, the health system was able to increase online payments and improve its financial position. Taking a holistic approach increased overall collection yield by 10% while costs came down because the number of statements sent to patients fell by 10%, which equated to a $1.3M annualized improvement in patient cash over a six-month period. This case study explains how.
In this business profile of Deloitte Consulting, Matthew Hitch and David Betts explore the potential benefits of elevating the customer experience and outline strategies to change service delivery.
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Financial services staff are always looking for ways to improve the verification, billing and collections processes, and Munson Healthcare is no different. Read about how they streamlined the billing process to produce cleaner bills on the front end and helped financial services staff collect more than $1 million in additional upfront annual revenue in one year.
Effective revenue cycle management can be a challenge for any hospital, but for smaller providers it is even tougher. Read how Wallace Thomson identified unreimbursed procedures, streamlined claims management, and improved its ability to determine charity eligibility.
Before launching an energy-efficiency initiative, it’s important to build a solid business case and understand the funding options and potential incentives that are available. Healthcare leaders should consider taking the steps outlined in the whitepaper to ease the process of gaining approval, piloting, implementing, and supporting sustainability projects. You will find that investing in sustainability and energy efficiency helps hospitals add cash to their bottom line. Discover how hospitals and health systems have various options for funding energy-efficient and renewable-energy initiatives, depending on their current financial structure and strategy.
Health care is a dynamic mergers and acquisitions market with numerous hospitals and health systems contemplating or pursuing formal arrangements with other entities. These relationships often pose a strategic benefit, such as enhancing competencies across the continuum, facilitating economies of scale, or giving the participants a competitive advantage in a crowded market. Underpinning any profitable acquisition is a robust capital planning strategy that ensures an organization reserves sufficient funds and efficiently onboards partners that advance the enterprise mission and values.
The success of healthcare mergers, acquisitions, and other affiliations is predicated in part on available capital, and the need for and sources of funding are considerations present throughout the partnering process, from choosing a partner to evaluating an arrangement’s capital needs to selecting an integration model to finding the right money source to finance the deal. This whitepaper offers several strategies that health system leaders have used to assess and manage capital needs for their growing networks.
Announcements from several commercial payers and the Centers for Medicare and Medicaid Services (CMS) early in 2015 around increased efforts to form value-based contracts with providers seemed to point to an impending rise in risk-based contracting. Rather than wait for disruption from the outside in, health care providers are now making inroads on collaborating with payers on various risk-based contracting models to increase the value of health care from within.
Yuma Regional Medical Center (YRMC) is a not-for-profit hospital serving a population of roughly 200,000 in Yuma and the surrounding communities.
Before becoming a ZirMed client, Yuma was attempting to manually monitor hundreds of thousands of charges which led to significant charge capture leakage. Learn how Yuma & ZirMed worked together to address underlying collections issues at the front end, thus increasing Yuma’s overall bottom line.
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How Lucile Packard Children’s Hospital Stanford increased payments received within 45 days by 20% and reduced paper submission claims by 70% by using ZirMed solutions.
The reasons claims are denied are so varied that managing denials can feel like chasing a thousand different tails. This situation is not surprising given that a hypothetical denial rate of just 5 percent translates to tens of thousands of denied claims per year for large hospitals—where real‐world denial rates often range from 12 to 22 percent. Read about how predictive modeling can detect meaningful correlations across claims denials data.
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Getting paid what your physician deserves—that’s the goal of every biller. Yet even for the best billers, achieving that success can be elusive when denials stand in the way of success, presenting challenges at every turn. Denials aren’t going away, but you can learn techniques to manage and even prevent them.Join practice management expert Elizabeth W. Woodcock, MBA, FACMPE, CPC, to: Discover methods to translate denial data into business intelligence to improve your bottom line, determine staff productivity benchmarks for billers, and recognize common mistakes in denial management.
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Drive down costs while improving quality in a reform environment.
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