Reimagining charity care: How Monument Health puts patients first with an innovative financial assistance program

Deepak Manmohan Goyal, MD, MBBS, MBA, executive director for revenue cycle and supply chain at Monument Health, remembers the case of a 40-year-old patient with late-stage cancer who sought care at the Rapid City, S.D., health system a few years ago before succumbing to her disease.

An earlier and unrelated care episode ideally would have flagged the patient as a candidate for Medicaid or charity care, but the screening system did not work as intended. Goyal knew mounting medical debt can cause patients in that situation to hesitate to seek care for their symptoms until it is too late.

“That got me on a path to fix this process,” he said.

After 18 months of planning, that path culminated with the launch of a presumptive-eligibility program for charity care in August 2023.

Under the traditional process, Goyal noted, cumbersome procedures and processes cause too many patients to give up on applying. The new program is designed to rectify that systemic flaw.

How it works

The impact of medical debt on personal finances and well-being has become a recurring storyline about the U.S. healthcare system.^a Policymakers are taking notice. In Minnesota, a neighbor of Monument Health’s home state, a law took effect Nov. 1 banning hospitals from pursuing collection activities before they have screened the patient for charity care.^b

Goyal thinks it would be better for everybody if hospitals were to proactively address the issue rather than await mandates or disparaging media coverage. In that spirit, he collaborated with Matt McLeod, chief client officer with Credit Collections Bureau (CCB), on developing a way to offer charity care without requiring patients to initiate an application. CCB is a Rapid City-based vendor that offers accounts receivables services across industries and generally receives accounts at around 180 days past date of service.

“We know there have to be some patients in the amount of bad debt that’s being turned over [who] should truly qualify for financial assistance,” McLeod said. “Maybe they were unable to fill out all of the financial-application information forms. Maybe they’re not getting their mail. Maybe they’re homeless.”

With data from more than 30 client companies such as utilities, telecommunications companies and rental managers, CCB had a robust line of sight into a patient’s likelihood of paying. Contracting with a third-party vendor, CCB established a scoring system to gauge which patients would have qualified for charity care had they applied. (CCB receives a payment from Monument Health for each amount scored.)

CCB alerts Monument Health anytime a patient who has gone to collections is eligible for charity care, per the algorithm, which combines an external federal poverty guideline percentage score with a customized propensity-to-pay metric. The algorithm also ensures the consumer has not made recent payments to CCB.

That patient’s bill then is waived, with the amount applied to the health system’s charity care ledger. Those patients would not know their bill ever went to a collections agency.

“They will not be burdened with the bill, and it will improve their access to care, their quality of life,” Goyal said. “And they will see the provider sooner rather than at the last stage of their disease process.”

A big impact

Following implementation, Monument Health began seeing substantial shifts of bad debt to charity care. Through the first eight months, more than 2,100 accounts had their bills waived and avoided the possibility of being subject to a drawn-out collections process.

The projected first-year increase in charity care is $7.8 million for the five-hospital system, Goyal said.

“It’s interesting we were missing that much before, but it’s just [that] so much care — especially for these people — is relatively urgent,” said Brad Archer, MD, Monument Health’s chief medical officer. “You try to give them some counseling, but it’s challenging to get all that paperwork filled out appropriately so that it meets the qualifications. Dr. Goyal’s process is just really helpful in that it simplifies and automates that process to some extent.”

Even as charity care allocations surged under the new program, the health system’s collections did not decrease. That eased trepidation among the organization’s finance leaders about a possible revenue drop from the initiative, and it also confirmed that the patients who were being helped truly lacked the ability to pay.

“The data is showing we’re identifying the appropriate people,” McLeod said.

In other words, there is no advantage to the health system or the agency from spending time and resources on seeking payment from those patients.

“It spares putting people through a collections process that wouldn’t be beneficial for them or us,” Archer said. “They’re not not paying us out of choice. They simply don’t have the means.”

Before the new system was implemented, Monument Health’s unfunded-care splits were 77% bad debt and 23% charity care. In the first eight months afterward, there was a shift of seven percentage points to the charity care side.

Goyal said the program can get the ratio much closer to 50-50 — at least 60-40 — over the next couple of years without affecting revenue. Monument Health and CCB leaders plan to consider different ways of applying data to continually ensure the right patients are getting moved over to charity care, McLeod said.

How replicable is it?

Although Monument Health surely was not the first health system to implement a presumptive-eligibility process for charity care, leaders could find no other examples to study during the planning process.

“We developed this de novo ourselves,” Archer said.

McLeod said the program may well be unique in how extensively the data on the prospective recipients is verified.

“Our algorithm actually scrubs it through our [internal] data bank, too, to best ensure that the appropriate people are qualifying,” he said. “I haven’t heard of any collection agencies or health systems taking it to that next level to get a little more accurate scrub-through just to make sure that individual doesn’t have assets or isn’t making payments recently, or really does have the ability to pay.”

There’s a reason the planning period lasted a year and a half, said Austin Willuweit, FHFMA, MBA, CPA, Monument Health’s CFO.

“It’s policies and procedures. It’s finding the right partner with the IT infrastructure to make it happen and then communicating it to your patients,” Willuweit said.

“For many, a lot of that will already exist because they’re using existing collection vendors,” he added. “But it’s not without some time and effort to get that working. And then you have to agree on the scoring methodology, too.”

Another concern was whether presumptive-eligibility protocols would draw attention from the IRS, given that charity care applications are supposed to be triggered by requests from patients.

A key workaround was to ensure “a consistent process that is paralleling that [traditional] process and that is being used without any discrimination,” Goyal said.

Where the payoff is found

As with other pursuits that involve looking beyond revenue optimization, establishing a presumptive-eligibility charity care program entails rethinking the notion of ROI.

“There are a couple roadblocks internally that finance departments would need to overcome in order to implement a project like this because traditionally folks are looking for an ROI, and if you’re basing that ROI solely on dollars for this, you’re probably not going to find it,” Willuweit said. “But when you pull in the community factors, we felt the full package of ROI was there.”

Indeed, said Goyal, amid increasing public and media scrutiny of NFP hospitals’ collection practices, “The good thing is we already are ahead in the game.” (See the sidebar below.)

The most fundamental benefit is the reduced stress on patients and, correspondingly, improved engagement with the health system.

“We’re in a rural community; we see the same people over and over again and provide their care,” Willuweit said. “It really facilitates a stronger and a better relationship with them when they don’t have to worry about, ‘I qualified for charity care last week; now I’m coming in again and you’re going to send me to collections again.’ We’re avoiding that whole cycle that just doesn’t need to happen.”

Willuweit said the health system’s patient experience scores have been reaching record highs in recent months. While that success cannot be linked exclusively to the new charity care program, “it definitely helps,” he said.

Sharing Monument Health’s story perhaps can inspire other organizations to take a similar step, Goyal said. He has developed a keen interest in patients’ financial well-being since joining Monument Health’s clinical staff in 2018. His work in recent years on improving financial clearance processes put him in position to spot the opportunity to make charity care work better for patients and providers alike.

“If all hospitals in the United States do that, just imagine how much charity care we would be providing as a healthcare system,” Goyal said.

“Imagine how many lives would be affected and how many patients we would be helping.” 

Footnotes

a. For a recent example, see Han, X.,  et al., “Associations of medical debt with health status, premature death and mortality in the U.S.,” JAMA Network Open, March 4, 2024.
b. Olson, J., “Minnesota hospitals barred from debt collection until screening patients for charity care,” Minneapolis Star Tribune, Nov. 7, 2023.

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Expansive charity care can counterbalance negative press

Although the goal of implementing its presumptive-eligibility charity care program was to help patients, leaders of Monument Health in Rapid City, S.D., are well aware that such an initiative also highlights a contrast with the headlines that have dogged the not-for-profit (NFP) hospital sector in recent years.

“Ten, 20 years ago, hospitals were respected a lot,” said Deepak Manmohan Goyal, MD, MBBS, MBA, executive director for revenue cycle and supply chain. “And somehow that narrative is being changed now.”

A drumbeat of research and media coverage has purported to show that NFP hospitals fail to live up to their tax-exempt status because they do not provide the requisite level of charity care, or they go overboard with collections.^a

Brad Archer, MD, chief medical officer with Monument Health, hopes the presumptive-eligibility charity care program can “raise this awareness and the discussion that there’s an awful lot of charity care out there and that, frankly, some of these attacks aren’t justified.”

The projected $7.8 million first-year increase in charity care is powerful testimony.

“[The new program] is a way of validating the work that we do every day as linked to our commitment to the community and that we really do strive not to have to send people to collections or make write-offs on bad debt,” Archer said.

Matt McLeod, chief client officer with Credit Collections Bureau, which is partnering with Monument Health on the initiative, noted that NFP hospitals and healthcare collection agencies are both under the microscope for allegedly seeking to obtain payments even to the detriment of patient and community well-being.

“We’re changing this [notion],” he said.

The program also serves as reassurance for any clinician who may have doubts about the health system’s mission, Goyal said: “It brings that feeling of compassion to medicine back that we are doing, as an organization, everything that we can to help our patient population.”

Footnote

a. For examples, see: Navathe, A.S., “Why are nonprofit hospitals focused more on dollars than patients?” New York Times, Nov. 30, 2023; and Trang, B., “Some nonprofit hospitals spend less on charity care than they receive in tax breaks, new analysis shows,” STAT, March 26, 2024.

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The prevalence of medical collections, stratified by income

The Consumer Financial Protection Bureau published a 2022 report examining the link between eligibility for financial assistance and the volume of medical collections. Among the insights they presented, as seen in the graphic to the left, was the incidence of medical collections based on income. The data were from December 2018 and came from 2,990 survey responses. Percentages reflect the share of respondents in each income category who said they had at least one medical collection on their credit report.

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