Hospital’s ‘menu of opportunities’ helps many self-pay patients
Reduced-fee assistance program targets newly defined working poor’
The hospital’s status as the only business in the world that cannot turn people away — regardless of whether it gets paid — is a fact of life that is being underscored more dramatically than ever as the nation’s uninsured population grows by leaps and bounds. Dealing with this unique challenge, points out Stuart Schiffman, assistant vice president for patient business services for Marlton, NJ-based Virtua Health, means balancing "a social agenda on one hand and fiscal reality on the other."
Virtua’s standard of values — illustrated by a star with the patient in the middle — adds even more weight to its health care mission, he explains. "The five points of the star are caring culture, resource stewardship, the best people, excellent service, and the highest clinical quality and safety.
"That is what our culture is all about," Schiffman adds. "We are reviewed based equally on performance and how we measure up to those values."
With that in mind, Virtua launched an initiative, well in advance of the rash of publicity that has surrounded the subject in recent months, to offer "a whole menu of opportunities" for the self-pay patient population, he explains. That menu includes a comprehensive plan for the indigent, as well as for those who are making a decent living but either can’t afford health insurance or choose not to buy it.
The goal is to meet patients’ needs and, at the same time, keep the not-for-profit health care organization financially viable "so we can reinvest in the community," Schiffman notes.
Charity care revisited
Recent changes in the formula the state of New Jersey uses to allocate its funds for indigent health care made it viable for Virtua Health to take a more proactive role in documenting and going after reimbursement for charity care, he continues. Virtua’s hospitals have received fewer than 11 cents on the Medicaid dollar for the charity care they provide, but that figure may be increased to as much as 43 cents, he says. While that reimbursement is relative to a limited pot of state money, Schiffman adds, the change "gave us much greater incentive and ability to document" the care.
Another motivation, he says, was the desire to reduce the organization’s bad debt — much of which actually was undocumented charity care.
To spearhead the effort, in September 2004, Virtua brought in Armanti Financial Services, a Bloomfield, NJ-based company whose forte is dealing with self-pay accounts, Schiffman says. "They have on-site staff working on our behalf, and they have become almost our financial counseling staff."
Armanti Financial follows up with every patient who is designated "self-pay" at the time of admission, assisting the person in-house and after discharge in the process of attempting to obtain coverage. "If necessary, [Armanti staff] will actually go to people’s homes, scan the necessary documents, such as pay stubs, help them complete the paperwork, and work to get them enrolled," Schiffman explains.
"Charity care is the payer of last resort. If [the account] is listed as patient pay,’ Armanti assesses whether or not there is insurance — sometimes we miss it, and they find it — and secondly, they see if the person is eligible for Medicaid," he adds. "Finally, if [the patients are] not eligible for anything else, they go to the charity care program."
Striving for 50-50
As of the first quarter of 2005, Virtua’s ratio of bad debt to charity care has virtually flipped, Schiffman notes. At the end of March, it was 36% bad debt and 64% charity care. "Last year, it was almost the exact opposite. Our goal for 2005 is to be 50-50," he says.
Before the program with Armanti was implemented, says Diane Mastalski, corporate multisite administrator for patient business services for the 1,034-bed system, self-pay patients presenting at the five different Virtua facilities were screened first for Medicaid and then for charity care by financial counselors/charity care representatives at each location. The pattern was that when "the patients were noncompliant, we sent letters, but they didn’t come back [to complete the process]," she adds. "When they got the third or fourth letter, we started to see a little bit of compliance — not with all but with some."
Now there are Armanti representatives at each location who handle all self-pay accounts from the start, Mastalski notes. "When a registrar creates a registration and the patient says he [or she] has no insurance, the account automatically goes to Armanti." If an account is accidentally designated as self-pay, Armanti reps "follow up and then give it back to us," she explains.
When Armanti came on board, some of the Virtua financial counselor/charity care reps left the hospital’s employ and began working for the vendor, Mastalski says. Those who couldn’t fill those positions were given similar jobs within the organization, in such areas as insurance verification and preadmissions, she adds, noting that no one was terminated involuntarily.
One of the biggest challenges during the transition had to do with the technology side — making sure that Armanti was set up to use not only the vendor’s own in-house system, which had to be linked to the Virtua billing system, but also the hospital information system, Mastalski notes.
Training was an issue as well, she points out. "[Armanti staff] had to learn our billing and registration system. The training was done using a train-the-trainer approach. We trained a couple of their core people to bring them up to speed on our hospital information system, and they, in turn, trained the remainder of their employees."
Since the Armanti employees already understood the insurance pathways, "it was a very straightforward training session," Mastalski adds.
To facilitate the exchange of information once the program was under way, notes Armanti project manager Tricia Tracy, "we developed a mechanism whereby we transmit all of our daily activities back to the Virtua system. The information is uploaded on a weekly basis to make sure the hospital is informed, so that [accounts] don’t fall into a black hole," she explains.
"It’s so we can bring up an account and say, Oh, this person is self-pay, and still waiting on documentation,’" Mastalski adds. "We can see all of that detail."
Field work is important
One of the big advantages of the partnership with Armanti is the vendor’s ability to, if necessary, send employees to patients’ homes to complete the Medicaid or charity care application process, she says. "We didn’t have the staff or the ability to do the field work, so if the patient was noncompliant, we didn’t have a way to follow up."
Noncompliance on the part of the indigent population is understandable, Schiffman notes. "The truth of the matter is a population that has no assets and minimal or no income understands there is no recourse [on the provider’s part]. We have to help them be compliant," he adds. "These people have a lot of dignity and a lot of integrity, but often do not have the resources to cover the cost of care," Schiffman says. "Many times, they’re embarrassed about their inability to pay, so we want to do anything we can to help them. We also want to do what’s financially right for our institution."
Armanti’s field work is done selectively, Tracy points out. "We try to do it smartly, typically with the higher-balance accounts — not with patients who have a $100 balance. We have three or four full-time employees out to the [Virtua] patient base on any given day."
Field representatives carry scanners so they can scan patient documents and download them at the main office, she notes. "So the information is maintained in document imaging."
The company not only sends staff to patient homes to help with charity care applications, she notes, but will transport patients back and forth to the county Medicaid office to complete those applications.
Helping the working poor
Another selection on the Virtua self-pay menu is targeted to people traditionally known as the "working poor" — those who earn enough money to fall between the cracks of programs such as Medicaid, but still can’t afford to buy health insurance, Schiffman says. In some cases, this segment of the population may be making a decent salary, but for whatever reason — perhaps they’re young and have other priorities — choose not to carry insurance, he points out.
In the summer of 2004, Virtua put in place its own reduced-fee assistance program, he notes. "Basically, what we’ve done is expand the charity care program. If qualified, the person receives a 79% reduction on our charges."
The criteria are simple:
- The person must have no insurance coverage at all — the discount doesn’t apply to copays or deductibles.
- The person doesn’t qualify for assistance from Medicaid or state charity care.
- The gross annual income — whether there’s a family of one, two, or more — must be less than $94,711.
"We’re not asking about assets, what’s in the bank account, or whether they rent or own," Schiffman says.
As for the fairly high-income cut-off and the seemingly random figure, he adds, "we looked at the criteria for Medicaid eligibility, and $94,711 was the bottom line — albeit for a family of eight. Our goal was to reach as many people as possible."
Providing relief to a segment of the population that doesn’t meet Medicaid or charity care guidelines, but is unable to afford the high price of health care, was the major impetus behind the program, Schiffman says. Another important consideration, he notes, is the increased scrutiny on not-for-profit hospitals, even though Virtua was working on its program before the flurry of national attention to organizations’ self-pay policies. "We don’t market this, but we do put the information on our web site to let people know it’s available," Schiffman says.
"It’s all done at the back end," Mastalski adds. "We don’t [initially] offer that program. There are other billing options for those who don’t meet charity care guidelines."
As with Virtua’s other self-pay initiatives, Armanti administers the reduced-fee assistance program, but it requires a certain amount of finesse, Tracy says. "There really is an art to it."
Patients who call the 800 number printed on their bills and say they can’t afford to pay are transferred to an Armanti representative who discusses a number of ways the bill can be paid, she explains. "We float it all out there — the prompt-pay option, the GE credit card. Virtua is very innovative as far as payment plans are concerned. I can honestly say they have more ways for people to resolve a bill than any [organization] we’ve worked with."
If the patient has been offered five different ways to settle the bill and still says he or she can’t pay, the reduced-fee option is put on the table, Tracy says.
Results have been very positive, Schiffman says. "There’s no question that we’ve increased customer satisfaction. And to date, we’ve been moderately successful in reducing our bad debt."
"Most patients truly want to pay their bill," adds Mastalski. "Only a very small percentage doesn’t want to pay. So the more options we can offer, the better for our patient population."
[Editor’s note: Diane Mastalski can be reached at (856) 248-6369 or by e-mail at [email protected]. Stuart Schiffman can be reached at [email protected]. Tricia Tracy can be reached at (856) 355-2141 or by e-mail at [email protected].]
The hospitals status as the only business in the world that cannot turn people away regardless of whether it gets paid is a fact of life that is being underscored more dramatically than ever as the nations uninsured population grows by leaps and bounds.
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