Blog | Medical Debt

Perspective matters when it comes to media scrutiny of health system collection practices

Blog | Medical Debt

Perspective matters when it comes to media scrutiny of health system collection practices

  • Modern Healthcare reports that a whitepaper by the Community Service Society found that over a five-year period, hospitals in 26 counties in New York State filed 31,000 collections lawsuits.
  • HFMA’s Chad Mulvany says 31,000 lawsuits may seem like a lot but adjusted to an annual basis and compared to the population that actual number is smaller than one would anticipate.
  • HFMA’s Healthcare Dollars & Sense reports, is a compilation of industry-consensus recommendations and best practices to help hospitals and health systems close gaps where patients may fall through the cracks when it comes to patient financial assistance.

In its coverage of a recently released whitepaper, Modern Healthcare reports that the “Community Service Society found that over a five year period, hospitals in 26 counties in New York State filed 31k collections lawsuits.”

The Community Service Society whitepaper calls into question both the collection processes of a number of hospitals and whether they should qualify for the state’s Indigent Care Pool funding. In addition to providing the number of lawsuits filed by the “top 25 hospitals” in the 26 counties over a five-year period, the paper supports its contention that not-for profit-hospitals are not providing adequate charity care funding by offering a handful of anecdotes about individuals who might have qualified for charity care if it had been offered. But instead they were sued by the providers.

Takeaway

As always with these things, perspective helps, but I’m not sure it matters in the court of public opinion.

Missing perspective: A little perspective here is helpful … 31,000 lawsuits seem like a lot, but 31,000 lawsuits averaged over five years is a smaller number … 6,200. Then think about the fact the counties analyzed include the five boroughs, Brooklyn, Bronx, Queens, Manhattan, and Staten Island that comprise New York City  — which by itself is home to more than 8.5 million people. Once you add in the population of all 26 counties well … 31k on that denominator becomes a pretty small percentage. Nowhere in the Modern Healthcare article or the whitepaper is the total population mentioned.

The report lists the number of lawsuits filed per 10k people per county. The county with the most lawsuits has 263 per 10k, Queens is 12. However, the report artificially inflates the rate by calculating the rate per 10k people for five years instead of calculating the average number of lawsuits per year per 10k. When you adjust and calculate the average per year per 10k of people per county, the county with the highest is 52 per 10k and Queens drops to 2 per 10k .

Finally, the report takes it a step further and singles out the hospitals that filed the most lawsuits. I will freely admit that I don’t know what the “right” percentage (if there is a right percentage) of lawsuits is for a hospital to file. But on average, the 25 hospitals with the highest volume of lawsuits over a five-year period filed lawsuits for .8% of their discharges,  once you adjust it to an annual basis and compare it to Medicare discharges from the most recently available cost report. The percentage of patients sued is even lower because my back-of-the-envelope analysis doesn’t even consider outpatient activity. So we’re talking about an incredibly small fraction of patient encounters that result in a lawsuit on an annual basis.

Scrutiny will continue: The report does not appear to be an accurate portrayal of accounts resolution practices for most, if not all, of the hospitals in the counties reviewed in the whitepaper.

However, if patients did fall through the cracks in being offered financial assistance, it’s probably a flag for health systems to review their systems for screening and connecting qualified individuals with financial assistance.

HFMA resource to help close the gaps: HFMA’s Healthcare Dollars & Sense reports is a compilation of industry-consensus recommendations and best practices for meeting consumers’ rising expectations, helping consumers make better healthcare decisions and improving the patient financial experience. It can provide processes and strategies to help close gaps where patients may fall through the financial assistance workflows. 

About the Author

Chad Mulvany, FHFMA,

is director, healthcare finance policy, strategy and development, HFMA’s Washington, D.C., office.

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