State resolves millions of dollars of medical debt

The Access Project's Medical Debt Resolution Program worked with 187 people in the state of Massachusetts between September 2006 and April 2008 with a combined medical debt of over $2 million. Medical debt was resolved in a variety of ways—by informing people about their insurance appeal rights, and eligibility standards for public programs, and also by negotiating payment arrangements with medical providers. While some of these cases are ongoing, over $1 million of the debt was retired.

Mark Rukavina, executive director, The Access Project, says that he doesn't know of any other program that exists at the state level that helps people resolve medical debt. "I am not aware of any programs like ours. Our program is completely free, and all of the savings go to the people that we work with," he says. "We have begun work to replicate this program in other states by providing training and backup support to targeted groups, and are getting very good results." Groups in Florida, Iowa, Kentucky and New York currently are looking at the program.

A significant percentage of medical debt could be paid by private insurance or public programs, if people only knew about existing protections, says Mr. Rukavina. "There are many good existing programs that people are eligible for, but they are not enrolled in them," he says. "For a number of people, we are able to help resolve their bill by getting them enrolled in existing programs."

States can help with the medical debt problem in these three ways, says Mr. Rukavina:

  • Ensuring retroactive coverage for people who are eligible but not enrolled.

Oftentimes, there is retroactive coverage for services already received. So even if a person incurs bills they aren't able to pay, if they learn about the array of public programs that exist and get enrolled, oftentimes the bills will be paid retroactively.

  • Making sure that private insurers are paying all they are obligated to pay.

Two-thirds of the people with medical debt in a recent Commonwealth Fund study were insured, notes Mr. Rukavina. With this in mind, states can help to resolve billing disputes between provider and insurer, or insurer and patient, and by having a formal process to file grievances, he says.

For instance, some states have ombudsman programs to help resolve claims that should have been been paid by insurance claims but weren't, or consumer complaint lines to help privately and publicly insured people, Mr. Rukavina adds.

  • Encourage institutions to clarify their existing charity care policies.

"States can provide tremendous assistance for people by doing this," says Mr. Rukavina.

More are likely to be uninsured

Lisa M. Duchon , PhD, a senior consultant with Washington, DC-based Health Management Associates, believes that federal health care reforms are needed to make sure that all Americans have insurance coverage that provides true medical security. "That is the point of insurance—to spread risk, to protect people from financial hardship and ruin."

In the meantime, says Dr. Duchon, "States have options to help prevent future medical care debts for patients." They can do this, she says, by making it easier for all children and adults eligible for public insurance to get on it, and by adopting policies that make it easier to stay on coverage. States can raise eligibility rates of Medicaid coverage for low-income adults, contribute toward premium payments of uninsured workers and their families with access to job-based coverage, or help families buy into public programs.

"For a research project, I spoke to several low-income parents this year who got saddled with medical debt after losing Medicaid. They started earning a little too much money to stay on it," reports Ms. Duchon. "After working hard to earn higher wages in jobs that either don't offer coverage, or offer coverage that is low quality or unaffordable to them, they had the great misfortune of a medical emergency while uninsured."

Unfortunately, with the downturn in our economy, Ms. Duchon says states are likely to see more people qualifying for Medicaid without making any changes in eligibility—and more people becoming uninsured—at a time of shrinking revenues. "States cannot guarantee medical security for working families or the financial stability of safety-net providers without federal assistance," she says.

Contact Ms. Duchon at (202) 785-3669, ext. 15 or lduchon@healthmanagement.com. Web: www.healthmanagement.com. Mr. Rukavina can be contacted at (617) 654-9911, ext. 229 or e-mail: Rukavina@accessproject.org.