Self-pay patients' ability to handle bill determined at POS at Southern Regional

Timely credit-worthiness check increases collections, workflow consistency

Putting in place technology and processes to determine the financial resources of self-pay patients at the point of service (POS) has helped increase collections, reduce bad debt, and ensure accuracy of patient identification at Southern Regional Medical Center (SRMC) in Riverdale, GA, says Tracey Frederick, senior systems analyst.

Other payoffs include more workflow consistency and a variety of efficiencies gained through automation — ranging from the streamlining of the charity care application form to the ability to store key data in an easily accessible form, she adds.

Going into the project, SRMC's main goal was to identify patients who qualified for charity care early, before the accounts went to collection agencies. "We wanted to bring down bad debt expenses," Frederick says.

Central to the turnaround, she says, was implementation of the Healthcare Revenue Cycle Platform (HCRP) from Chicago-based TransUnion, one of three national credit bureaus.

"We signed a contract [with TransUnion] in August 2004 and implemented the system in October 2004," adds Frederick. "We were the first Georgia hospital to sign with them, so we had to get all the Georgia Medicaid applications built into the system. We also built in our [existing] long-form charity application and [added] a short-form charity application."

Also built into the TransUnion system was SRMC's administrative adjustment form, used to write off balances, as well as approval and denial letters that are sent to the patient upon completion of the charity care process, she notes. "That additional programming took more time, but it was still a quick implementation."

The hospital's successes came not just from putting in the tool, but also from changing processes, Frederick points out. Before the system was put in place, she says, money was being collected only in the main cashier areas, located in the emergency department (ED) and inpatient admissions, and by financial counselors.

"We did not have registrars collecting," Frederick adds, "so POS collections were low."

Other problems to be addressed were lack of consistency in how incoming patients were identified and the fact that "everything was manual," she says. "There was lots of paper and we had to take the patients' word on identity and ability to pay. We had Equifax on the back end in patient accounting if we were going to sue [for payment] or had questionable data — anything that was red-flagged — but that was hit or miss."

Before, one employee might qualify a borderline charity care case — because he or she felt sorry for the person — while another employee would deny it, Frederick says. "We had policies and procedures, but no tool to check [on how they were applied]."

Now registrars are collecting payments at the point of service, and patient accounting staff are trained to ask for payment of balances on any open account when patients call or come in to talk about or get a copy of their bill, she says.

As part of the process workflow redesign, everyone who collects money receives four to six hours of training, including scripting and role-playing, Frederick adds.

"Once we went live with the system, we had people walking around to help [employees] with the system and listen to how they were doing with the script," she says. "There is no cut-in-stone way. You have to play with it, watch and see how [patients] react, and flow with how the conversation goes. You don't want to sound like you're reading something."

'We know more about patients'

Because of the TransUnion system, she says, "we know more about the patients — where they live, the correct Social Security number — for identity theft [prevention]. It takes what we put in and compares it to what is out there in databases."

While SRMC chose to send only its self-pay population through the system, the vendor offers the option of using it for all patients, Frederick notes. The system can go out automatically and get the data or — as is done at SRMC — wait to be triggered by staff. "You can pick and choose how you want it. We chose not to have it 'ding' until we ask it to, and then it is a matter of seconds, but it can be done immediately," she says.

If a patient tells the financial counselor that she makes, for example, $500 a month, and the system comes back with the information that she does, in fact, make that amount, Frederick says, the employee takes the person through the new short-form charity application.

The hospital instituted that practice after putting several cases through a manual check, using the long-form application, and comparing the results to those obtained through the TransUnion system, she adds. The outcomes were "very close," Frederick says.

Information that has already been gathered by the hospital — as from the admission/discharge/transfer (ADT) system — is automatically populated onto the form, she notes. "Once it's been keyed in on one form, if needed somewhere else, it pulls through."

At that point in the short format, if the information has matched up, the application is done and the system prints an approval letter, Frederick says. "We chose not to give the approval letter to the patient right away. For internal audit purposes, we chose to have an extra person involved.

"The person who does the charity application process is not the person who writes off [the bill]," she adds. "The one who writes it off, sends the approval letter to the patient."

The hospital's long-form charity care application — formerly used for all applicants — is now used if the patient does not have a Social Security number and so cannot be checked through the TransUnion system, Frederick says.

The long-form interview is also done if the patient gives his or her monthly income as $500 and the system comes back with an income of $2,000, she adds.

When you're looking at a patient's address, Social Security number, and credit information and the person doesn't know it, it can lead to some interesting conversations, Frederick points out.

During training sessions, she says, "We kept trying to stress [to staff], 'Don't let the patient know you have his credit information in front of you.' Instead, say, 'Our system shows [fill in the blank].'"

The concern, Frederick adds, was that patients "might freak out" if they knew hospital employees were looking at their credit history.

In one instance, she recalls, an employee ran a Social Security number offered by a patient through the TransUnion system, and it came back highlighted in red, indicating the person associated with that number was deceased.

The employee told the person there seemed to be a problem with the number and asked the patient to repeat it, and when he gave the same number, she pretended to re-run it. "She said, 'Our system is still showing that this number is not good.'"

At that point, Frederick says, the patient brought out the card bearing that number, and the employee said, "Our system shows this person is deceased." The patient, visibly upset, replied, "I just bought this Social Security card down at the flea market."

In another case, she says, a patient told staff he didn't have the money to pay for his hospital care, but the credit check revealed he had one car that cost $30,000, another worth $40,000, as well as a mortgage of more than $4,000 a month.

"I'm not sure how [the employee] worded that," Frederick adds, "but the person did end up paying the co-pay."

Credit card technology, formerly available only at the inpatient and ED cashier posts, has been installed, and to do the credit card swipe, SMRC is using "an inexpensive web-based product," she says. That product was bought before the hospital decided to go with the TransUnion system, adds Frederick, noting that the vendor can build that functionality into the system.

If a patient says that he or she will pay, for example, $100 by credit card, that information is put into a database — created by SRMC staff — that prints out two receipts, she says. One, automatically numbered and assigned with the person's name, goes to the patient, Frederick says, and the other goes into an envelope with the money that has been collected.

That envelope is put into a drop safe to which only the main cashiers have access, she adds, "and they do all the posting and deposits. We were going to allow [staff] in the different areas to do it, but they already were worried about just taking money."

Along with the credit card technology, SRMC put a process in place whereby staff can interview patients at the bedside and key information into the computer system, Frederick notes. "We bought laptops on mobile workstations, and they have credit card swipes. We were trying to take care of every excuse [not to pay] that we could. If they say, 'I can give you a credit card,' we're ready."

Emphasis on FICO score

Instead of doing follow-up on self-pay accounts from its mainframe computer, SRMC chose to run reports through the TransUnion system. The emphasis is now on the FICO score — whether the person has the means to pay — rather than the age of the account or its dollar value, she adds.

"We get the credit scores and go after those who can pay, and let collection agencies go after those who can't pay," Frederick says.

As a "proof of concept," she notes, a TransUnion representative took 8,681 SRMC self-pay patients and put them through the platform to see how the system would report on their credit worthiness. (See breakdown.)

More accurate identification of patients and their financial resources has resulted in dramatic improvements to the SRMC bottom line quite apart from substantial increases in POS collections, Frederick says.

For the first time, the hospital qualified for disproportionate share hospital dollars for indigent care, she says, receiving $8.6 million in fiscal year 2005 and $7.5 million in FY 2006. By FY 2006, Frederick adds, the upper payment limit from Medicare had increased to $3.8 million — up from $2.7 million in both 2004 and 2005.

As for POS collections, the largest monthly total in 2004 was $100,000. By 2005 the peak month's total was $140,000, and in 2006 that figure reached $190,000.

One of the most significant outcomes, she notes, was the shift in the percentage of charity care written off during the accounts receivable (AR) phase compared to that written off after reaching the bad debt column.

Prior to 2004, the majority of charity care was written off after reaching bad debt classification, Frederick says. Before implementing the TransUnion system, SRMC had begun trying to identify accounts that qualified for charity care earlier in the process, she adds, but the manual task was "overwhelming" and results varied depending on who was doing it.

In December 2004, the peak month for that year, there was just under $2 million in charity care, with a little less than $1 million identified in the AR phase, and right at $500,000 designated after reaching bad debt.

In February 2005, the peak month for that year, the total charity writeoff was $2.5 million, with $1.5 million written off during AR, and a little more $500,000 after reaching bad debt.

In June 2006, the peak month for that year, $2.7 million in charity care, was written off, $1.3 million during the AR phase and a little more than $1 million after reaching the bad debt designation.

HIPAA protection in place

It's important from the standpoint of HIPAA compliance, notes Marty Callahan, vice president of health care solutions for TransUnion, that the data used in the HRCP are always accessed in a "soft inquiry."

"No one else ever sees that we have accessed those data — just the [client] and TransUnion," he adds.

Based on the financial data in the report, two things — minimum income and family size — are estimated, Callahan continues. Those data are compared to the federal poverty guidelines established by the Centers for Medicare & Medicaid Services and to the hospital's own internal charity policy to see if the patient qualifies.

If the patient doesn't qualify for those options, the system looks at whether he or she qualifies for another federal, state or local assistance program, he says.

At Southern Regional, a catastrophic plan — for those with good financial standing who have a tragic accident and find that their bills have overcome their income — is also built into the process, adds Frederick. "We also have Victims Compensation, a Georgia program, built into our system."

"We're really increasing the ability of the hospital to segment the population of patients who are truly charity [cases] by objective criteria," Callahan adds.

The system gives the facility the ability not only to get the patient into an assistance program, he notes, but to track where an individual is in terms of completion of the application, which is important from a patient compliance standpoint.

"If I came in, but never completed the application," Callahan says, "the next time I come to the hospital, the tool will tell the financial counselor that I was here before, but still need to bring in my W-2 form, or as a follow-up item, will prompt the financial counselor to place a call to deal with that."

[Editor's note: Tracey Frederick can be reached at tracey.frederick@southernregional.org. More information on TransUnion is available at (888) 396-8361 or on the web at www.transunion.com.]