uninsured patients

HHS funds high risk pools; Finance execs get pay hike;

Anne Zieger — Tue, 22 Jul 2008 01:45:12 -0400

> HHS has awarded more than $49 million in grants to 30 states with high-risk pools to provide health insurance to otherwise uninsurable patients. Article

> Financial professionals saw a 4.5 percent pay hike across all industries last year, with the biggest compensation growth to be found in the treasury/finance category. Meanwhile, CFO cash compensation in healthcare organizations rose 14.1 percent between January 2005 and January 2007. Article and Article

> One rural Texas hospital may be forced to close its doors unless it finds a buyer, borne down by rising debts generated by uninsured patients. Article

>EMR vendor Sevocity will offer up to $100,000 to assist small to medium sized clinics and community health centers in Georgia and South Carolina to encourage the adoption of EMR technology. Article

And Finally... There's drunk, there's pickled, then there's this guy. Article

NJ hospitals in dire straits after charity budget cuts

Anne Zieger — Wed, 09 Jul 2008 00:09:11 -0400

While hospitals in every state are struggling to fund charity care and bad debt, things in New Jersey are particularly bad. Not only does the state have 1.3 million people without insurance--and a law in place requiring hospitals to treat anyone who visits--but also, the state now faces major cuts in the funding that paid for these impoverished patients. Gov. Jon Corzine (D) recently signed a state budget that cut $111 million from the charity care fund. Now, hospitals that were already struggling are facing even worse problems.

Hospitals say that the stage was set for the hospitals' financial weakness well before the charity cuts, in part due to patients cherry-picking from ambulatory surgery centers. Now, with half of the state's hospitals operating in the red, observers and hospital leaders expect to see many more closures.

These closures are particularly likely to occur in communities populated by high numbers of poor patients--the ones who will find it most difficult to transfer to another hospital. For example, Plainsfield, NJ-based Muhlenberg Regional Medical Center--which serves a poor, ethnically-mixed community--has begun the process of closing down its acute care beds after operating continuously for 130 years. It lost $16.8 million last year and expects to lose another $18 million in 2008.

To learn about the hospitals' troubles:
- read this Washington Post piece

Related Articles:
NJ officials say more hospital closures are OK
NJ hospitals going under as state bailout cash ends

HFMA ANI 2008: Financial, regulatory pressures broaden healthcare CFO role

Anne Zieger — Tue, 24 Jun 2008 17:26:40 -0400

The role of the healthcare CFO is changing--and growing broader--as regulatory and social pressures force CFOs to think beyond the balance sheet, according to a new study by Ernst & Young announced at the HFMA ANI 2008 conference. The consultants, who held two focus group sessions with 23 CFOs, found that the CFOs are being asked to confront health policy issues in addition to addressing challenging financial management concerns.

The healthcare CFOs agreed that seven key issues were most likely to reshape the industry (and their jobs) over the next few years:

The growing number of under- and uninsured patients are likely to have a big impact on their bottom line. Most CFOs say that improving workforce productivity may be their last chance to improve margins.
Restricted access to capital, triggered by a combination of weaker credit and tougher bank lending standards, may slow down the hospital construction explosion of recent years and reduce strategic options. To cope with this, many CFOs are looking at methods for consolidating resources and organizations.
Tighter physician relationships may prove to be key in getting ahead and surviving regulatory changes. Many believe that it's now important to attempt joint ventures with physician-owned businesses and employ physicians where possible.
A shortage of key personnel, notably nurses, is driving up the cost of labor substantially.
Pay-for-performance initiatives have called for costly investments in quality measurement, but haven't necessarily generated quality improvement. CFOs say these efforts won't work unless doctors are involved in hospital leadership and drive quality improvement.
A new technology arms race is underway, with many CFOs feeling record pressures to invest in new clinical and information systems. To pay for such systems, CFOs believe consolidations of hospitals may be necessary.
Demands for transparency and proof of community benefit are changing the industry with ongoing demands to disclose patient safety, quality of case, costs and charges. Not-for-profits must go further, explaining policy on bad debt and collections, charitable care and community benefit. CFOs say that adding these compliance demands to their plate will require great effort.

Interestingly, none of the points above address relationships with health insurers or changes in Medicaid. Oddly enough, it could be that right now, health plan reimbursement is the least of their worries.

To get a copy of the report:
- visit Ernst & Young's website

Updates on regulatory risks

Anne Zieger — Thu, 19 Jun 2008 10:23:28 -0400

Because everyone uses healthcare, regulators take a shot at the system from time to time to prove that they're paying attention. Still, things are particularly intense this year, with tax issues and financing questions looming larger than they have before. With tax exemptions for non-profit hospitals under scrutiny, the use of tax-exempt bonds being examined, endowment use being questioned, and the ongoing carnival of changes that is Medicare reimbursement, you'll see a fair amount of discussion at the show around agency rule-making.

Among hospital types, expect to see some furrowed brows over the impending Form 990, Schedule H, in which not-for-profit hospitals will report on their charitable activities to the IRS. Given that some Congressional hospital critics, like Sen. Chuck Grassley (R-IA), have questioned whether some hospitals deserve not-for-profit status at all, filling out the Schedule H will be a high-stakes exercise. (As we've mentioned elsewhere, the June 25th educational session on how to cope with the new Form 990 is likely to be a standing-room-only affair.) Of course, the trade show exhibit floor will feature quality time with consultants like Grant Thornton, who are offering to help with the problem, too.

While you're at the show you may also wish to check out the buzz on what's happening in patient collections in your colleagues' home states--as it seems that state legislatures are pretty interested in how hospitals deal with uninsured and self-pay patients. In Illinois , for example, the legislature is considering a bill that would set limits on what hospitals would be allowed to charge and collect from some uninsured patients. And the Minnesota legislature recently passed a bill (later vetoed by the governor) that would have banned providers from collecting, using or sharing medical debt information to qualify patients prior to providing elective services. It seems likely that other states are going to get involved in these issues in coming months, too.

Helping to qualify the uninsured

Anne Zieger — Thu, 19 Jun 2008 03:43:01 -0400

Despite the fact that it's critical for hospitals to qualify uninsured patients for charity care programs ranging from federal and state insurance to institutional programs within your own organization, sometimes it just doesn't happen. However, there will be many vendors at this year's show who hope to improve your track record. One eligibility services vendor who will be attending is Advanced Patient Advocacy, which boasts that it can achieve a minimum of 35 percent reduction of uncollectible receivables. Others, like MedAssist and Eligibility Plus, offer eligibility help as part of a suite of A/R management services. Some companies focus largely on Medicaid and other state programs, while some, like DECO, also extend their services to helping patients pay for care from sources like SSI/SSDI and funding for victims of crime in addition to state and federal insurance programs. Given the bad debt hit most hospitals are taking these days, I suspect these vendors will get an enthusiastic hearing. If given a choice between pursuing self-pay patients on their own, and discovering a better-financed party who will pay for that patient, hospitals would be crazy not to consider choice two.

Equity firms partner for $100M buyout of eligibility firm

Wed, 11 Jun 2008 06:59:55 -0400

In a move that further underscores the industry's renewed determination to get patients registered appropriately for state and federal medical programs, a group of private equity firms have partnered to acquire Chamberlin Edmonds & Associates of Atlanta, which provides specialized eligibility determination services to hospitals. It helps hospitals qualify patients not only for Medicaid and federal and state programs, but also, SSI, Society Security Disability and charity care programs, and even crime victims compensation funding.

Chamberlin Edmonds guides uninsured patients through the process of applying for reimbursement for uncompensated care, particularly federal and state disability programs. It has more than 160 customers in 27 states. Chamberlin Edmonds' top executives should remain with the company. The private equity firms involved in the buyout include New York's Charterhouse Group, Highlander Partners and MTS Health Investors. The deal is valued at about $100 million.

To learn more about the deal:
- read this Modern Healthcare article (reg. req.)
- read the equity firms' release

Related Article:
Study: Uninsured ranks could be much lower

IL considering bill limiting charges to uninsured

Wed, 04 Jun 2008 06:59:56 -0400

The state of Illinois is considering a bill that would set limits on what hospitals would be allowed to charge and collect from eligible uninsured patients. Under the terms of the bill, which was passed by the state House and is expected to pass the Senate, hospitals could charge no more than 135 percent of the costs for medically necessary care for eligible patients. To meet the criteria, the patient would have to be a state resident and make no more than six times the federal poverty level, or half of that in rural or critical-access regions. For patients who met these conditions, the hospital would be prohibited from collecting more than 25 percent of a patient's income each year unless he or she had assets exceeding the income levels in the eligibility guidelines.

To learn more about the bill:
- read this Modern Healthcare piece (reg. req.)

Related Articles:
St. Louis hospitals give uninsured discounts
Catholic Healthcare West uninsureds get 35 percent refund
MN health systems pay back uninsured patients
SC court examines discounts for uninsured

Tough challenges on the horizon

Wed, 21 May 2008 06:59:59 -0400

I hate to be a downer, but from where I sit, next year's shaping up to be pretty scary for providers.

For one thing, several leading health plans have vowed to raise premiums in 2009. As we've discussed here previously, this is sure to drive some employers to cut benefits and others to drop health coverage entirely. Ultimately, this means more bills patients can't pay.

Meanwhile, with financial markets still recovering from subprime losses, providers haven't been able to count on investment income this year to cover the gaps in their own income. Next year may not be much better.

Then, there's the gridlock that's likely to take effect after the presidential election for at least the first six months or so, regardless of which party wins the day. Lobbyists are doubtless hoping to get their final licks in now--on critical issues like the planned 10 percent Medicare cut for doctors--but there's only so much they can get done before November.

The only real question mark here, in my view, is whether federal officials will spend more money in the near term to help hospitals and doctors pay for electronic medical records.

They might. After all, the Bush administration is terribly gung-ho on the subject. That could at least provide some welcome capital for a critical, capital-intensive project most hospitals have underway or planned for the near term.

Otherwise, as I see it, this is a time for living on a shoestring for a while if there ever was one. Disagree? Drop me a line and let me know what you think. - Anne

Study: Uninsured ranks could be much lower

Wed, 14 May 2008 06:59:56 -0400

I know, you do everything you can to qualify patients for government programs when they're uninsured and need care. Despite that, uninsured patients continue to generate high bad debt levels for providers; in fact, according to the American Hospital Association, the industry provided $31.2 billion in uncompensated care in 2006.

Millions of patients are slipping through screens designed to hook patients up with government programs, according to research by the National Institute for Health Care Management Foundation. For example, one in four who are eligible for Medicaid or the State Children's Health Insurance Program aren't enrolled, a total of about 12 million people.

Of course, the problem doesn't lie just with the provider's eligibility screening process. Often, the uninsured are overwhelmed by the administrative requirements involved in applying for such programs, while current enrollees frequently are dropped when they don't fill out renewal forms. Meanwhile, a 2005 law requiring applicants to show proof of citizenship to be eligible has also led to delays in enrollment for many citizens, foundation researchers said.

To learn more about the report:
- read this InsideARM article

Related Articles:
In 2007, bad debt rising for hospitals
Study: Better records could boost self-pay collections
EDs seeing more affluent patients, less uninsured

Not-for-profit financial successes raise questions

Wed, 09 Apr 2008 06:59:57 -0400

According to a December 2006 Congressional Budget Office report, U.S. not-for-profit hospitals get $12.6 billion in tax exemptions and $32 billion in federal, state and local subsidies. That's a pretty sizable chunk of change, though perfectly acceptable if the hospitals use these moneys to fulfill their charitable mission. The problem is, critics increasingly are saying it's too good--and contending that some of the hospitals seem to be spending less on charity care than they're taking in in benefits. Of late, perhaps the most vocal and visible critic has been Sen. Chuck Grassley (R-IA), who has been on a mission for years to force not-for-profits to account for themselves. He may yet succeed in his campaign to force not-for-profits to pay at least 5 percent of annual patient operating expenses or revenues to charity care.

Of course, some not-for-profits are struggling terribly, particularly those in inner cities that take in a large number of uninsured patients. However, critics are drawn to some of the more successful not-for-profit hospitals, which are raking in revenue at a rate that beats even their for-profit rivals. According to data from the American Hospital Directory, 77 percent of the 2,033 not-for-profit hospitals in the U.S. come out ahead financially, as opposed to 61 percent of for-profits. Meanwhile, according to data from the AHD, the combined net income of the 50 largest not-for-profit hospitals in the U.S. went up by a factor of 8 from 2001 to 2006, hitting $4.27 billion.

Certainly, as such hospitals begin to roll out their first Schedule Hs for Form 990, critics will at least have a better idea of where the money is going, and that will hopefully defuse some bad feelings. But in the mean time, it seems not-for-profit hospitals will have a lot of explaining to do if they're coming up with an excess income regularly. Better that than more regulations, right?

To learn more about this trend:
- read this Kaiser Daily Health Policy Report item

Related Articles:
Feds to crank up not-for-profit charity demands. Charity care report
AHA makes headway on community benefit reporting. Community benefit report
IRS to investigate nonprofit hospitals. IRS report
VHA: Charity policy must come from the top. VHA report