Financial Counseling

When Patients Decline To Buy Exchange Coverage

May 12, 2016 9:53 am

Most health systems extend financial assistance to patients who decline to get coverage through an insurance exchange or Medicaid, despite being eligible. But they take a variety of approaches to offering that assistance.


About 12.7 million Americans selected a health plan or were automatically re-enrolled through or a state insurance exchange when the third open-enrollment period ended on Jan. 31. But some 10 million individuals remain uninsured despite being eligible for subsidies to buy insurance through the exchanges.

Leaders from three health systems share their policies for extending financial assistance to uninsured patients who decline to obtain coverage.

Advantages of Financial Assistance

HealthAlliance of the Hudson Valley, a three-hospital system based in Kingston, N.Y., provides financial assistance on a sliding scale that ranges from a 100 percent discount for families with incomes at or below the federal poverty level (FPL) guidelines to 25 percent for families with incomes between 251 percent and 300 percent of the poverty level. The discounts are applied on top of HealthAlliance’s general self-pay discount.

When uninsured patients are admitted HealthAlliance’s financial counselors go to bedsides to help patients apply for Medicaid or insurance coverage via an exchange.  Kelly McGinnis, revenue cycle director, always hopes for Medicaid eligibility because it will cover the services being rendered, as opposed to exchange coverage which will start at a subsequent date.

“Not only will Medicaid help them with their hospital bill, but when they leave the hospital, it’s going to help them be able to get their meds, and it’s going to help them get a physician who is willing to see them,” she says. “That is more of an all-encompassing ‘let’s take care of the patient as much as we can from a financial standpoint.’”

If patients do not qualify for Medicaid and decline to obtain coverage through the insurance exchanges, HealthAlliance does allow individuals to apply for financial assistance. Patients can apply within 120 days after a bill has been referred to a third-party collection agency.

McGinnis points out that the dollar amount of a health system’s financial assistance in a given year is used to calculate Disproportionate Share Hospital (DSH) payments and Electronic Health Record (EHR) Incentive Program allocations.

“So there are advantages to allowing patients to resolve their accounts using charity care if they qualify by the guidelines rather than just saying, ‘We’re going to disengage from you and classify you as bad debt,’” she says.

Financial Assistance Decisions

University of Vermont Health Network (UVM Health), a four-hospital system based in Burlington, offers financial assistance on a sliding scale, ranging from 100 percent for patients at or below 200 percent of the FPL guidelines to between 85 and 55 percent for patients between 351 percent and 400 percent of the FPL guidelines. 

UVM Health financial advocates work with uninsured patients before service or during their inpatient stay to qualify them for an exchange program or Medicaid during the enrollment period. The advocates also work with underinsured patients who struggle with high deductible health plans; if no other funding source can be identified, they seek to help qualify the patient for financial assistance.   

During each year’s open enrollment period, UVM Health allows uninsured patients to apply for financial assistance but it delays decisions until coverage is obtained and/or after the enrollment period has ended. For 2017 coverage, that period will be from Nov. 1, 2016, to Jan. 31, 2017.

“We absolutely expect the patient to enroll for insurance through the healthcare exchange or enroll in Medicaid if they are eligible,” says Shannon Lonergan, director of patient access.

Here’s how UVM handles patient accounts based on patients’ responses.

Patients decline exchange coverage. If patients decline to obtain coverage during open enrollment, they can apply for financial assistance again after the enrollment period ends. UVM Health provides assistance if patients qualify under the policy. “Realistically, if the patient cannot pay, our organization has chosen to grant the financial assistance rather than send the account to bad debt,” she says.

Patients obtain exchange coverage. If patients obtain coverage through an exchange, historical balances are not affected. UVM Health allows those newly insured patients to apply for financial assistance to help address the old balances. “To say that you are not eligible for assistance for historical balances even though you clearly meet the poverty guidelines is not something we want to do,” she says. “If the patient cannot pay the bill, we want to offer the help.”

Patients can’t pay deductibles. If patients obtain coverage through the exchanges and cannot meet deductibles or coinsurance incurred when they receive services, UVM extends financial assistance if patients qualify based on their FPL guideline status.

Routine Financial Assistance Memorial Sloan Kettering Cancer Center (MSK) in New York extends financial assistance on a sliding scale to uninsured and underinsured patients with household income up to five times of the FPL guidelines.

Ruth Lande, senior vice president-patient revenues, says MSK financial counselors meet with all uninsured patients to determine if they qualify for Medicaid or coverage through insurance exchanges.

However, the cancer center does not require that patients apply for exchange coverage before they can receive financial assistance. Some patients cannot afford the premiums for an exchange plan, even with subsidies.

“Maybe they should qualify for financial assistance because that exchange plan is really not affordable,” she says. “We need to work with people.”

Because cancer care is so expensive, even insured patients often have trouble with the out-of-pocket responsibility associated with their treatment. Indeed, the majority of patients who receive financial assistance from the cancer center are insured.

Charity Care and Coverage Eligibility

Although insurance coverage via federal and state exchanges is reducing the nation’s uninsured rate, many exchange-eligible patients remain without coverage. Health systems may benefit from updating their financial assistance policy to specify whether and how charity care is extended to those patients.

Interviewed for this article: Ruth Lande is senior vice president-patient revenues, Memorial Sloan Kettering Cancer Center, New York, N.Y., and a member of HFMA’s Metropolitan New York Chapter.

Shannon Lonergan is director of patient access, University of Vermont Health Network, Burlington, Vt., and is a member of HFMA’s New Hampshire-Vermont Chapter.

Kelly McGinnis is director of revenue cycle, HealthAlliance of the Hudson Valley, Kingston, N.Y., and a member of HFMA’s Hudson Valley New York Chapter.


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