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By Jill Barton, Vice President of Revenue Cycle at Montefiore St. Luke’s Cornwall Hospital; and David Shelton, SVP, Firstsource
Healthcare providers know the financial perils of serving uninsured and underinsured patients. The high costs of bad debt, charity care, and increased accounts receivable (A/R) days can strain the bottom line significantly. Compounding the risk now is the COVID-19 pandemic, which impacts hospital revenue in multiple ways.
From the start of the pandemic through June 2020, more than 40 percent of U.S. adults postponed or skipped medical care, including urgent or emergency care, because of COVID-19 concerns, according to the Centers for Disease Control and Prevention. An American Hospital Association report predicted that declines in inpatient and outpatient volume of 19.5 percent and 34.5 percent, respectively, would lead to at least $323 billion in revenue losses to hospitals and health systems in 2020.
Hospital revenues are also affected by patients’ pandemic-related job losses and income reductions. Millions of Americans were laid off or furloughed in 2020, and four million people permanently lost their jobs and access to employment-based health insurance.
Despite optimism fueled by COVID-19 vaccines, the 2021 hospital revenue outlook is not encouraging. Moody’s Investor Service says nonprofit and public healthcare facilities will continue to see lower demand for some services until the pandemic ends. In for-profit hospitals, patient volumes are not expected to fully rebound to pre-COVID-19 levels until late 2021 or early 2022. To capture revenue during this tenuous time, hospitals must leave no stone unturned. Patient financial advocacy is a vital tool.
Why patient financial advocacy matters
The primary goal of patient financial advocacy is to help patients meet their healthcare financial responsibilities. For uninsured patients, this means identifying, verifying eligibility, and connecting patients to public benefits programs. For underinsured patients who can’t afford their high deductibles and co-pays, it can mean finding supplemental insurance and other ways to help them cover out-of-pocket expenses.
Many people in both groups don’t know what health insurance coverage they have or what they may qualify for. Of the 31.5 million Americans projected to be uninsured in 2021, 65 percent are eligible for subsidized coverage such as Medicaid, a Health Insurance Marketplace plan, or an employer plan—but they’re not enrolled. A patient financial advocate can identify potential federal, state, and local medical benefits for uninsured and underinsured patients to ease their financial burdens and maximize reimbursements for the hospital.
Elements of a successful patient financial advocacy program
The overall patient financial experience should aim to 1) give hospitals accurate financial data for every clinical encounter, 2) identify appropriate resources to help patients pay their bills, and 3) ensure providers are fully compensated for all services they deliver. Advocacy’s role is essential, especially in safety net and other hospitals serving financially vulnerable populations.
The most successful patient financial advocacy programs blend financial guidance, technology-enabled services, and funding program intelligence, and incorporate these elements:
- Hospital-specific workflows and skills to identify inpatient, outpatient, and emergency department patients who need help paying their bills
- Advanced technology to quickly identify and verify patients’ insurance and eligibility
- Expertise on common benefits programs including Medicaid, U.S. Department of Veterans Affairs benefits and COBRA, and lesser-known programs such as State Crime Victims Compensation and the Breast, Cervical and Colon Health Program
- Kind, respectful face-to-face, phone, or video interaction between advocates and patients to ease patients’ fears and ensure they understand financial issues
- Patient support throughout the benefits application and billing processes, including appeals
- Personalized patient experiences such as inpatient bedside screenings, home visits, call centers, multiple languages, and e-signature capabilities
- Good relationships and ongoing communication between advocates and healthcare teams, funding agencies and payers to facilitate applications, keep up with program changes and monitor status
- Automated reporting capabilities to track advocacy results and drive efficiencies
How to establish patient financial advocacy services
As hospitals face depressed revenues for the foreseeable future, establishing a solid patient financial advocacy program can go a long way toward meeting financial goals. These implementation practices can mitigate common challenges:
- Consider an outside advocacy partner to avoid upfront or fixed costs. Costs are incurred only when a patient qualifies for public benefits and the hospital is reimbursed.
- Engage and coordinate with patient access and/or registration teams, case management, and financial counselors, and billing staff. Confirm the hospital’s IT team can support the advocacy initiative.
- Develop written processes, procedures, and accountabilities for patient eligibility and enrollment.
- Define roles and responsibilities to ensure consistent patient screening, interviews, and education.
- Use technology to accurately capture patient eligibility information and identify and connect patients to appropriate resources.
- Train staff to deliver a dignified patient experience, including how to ask sensitive financial questions to create trust.
Benefits to hospitals and patients
There are many reasons to offer patient financial advocacy services. They enhance the patient financial experience and improve a hospital’s bottom line by securing revenue that would otherwise be lost. They can increase reimbursements and Disproportionate Share Hospital (DSH) payments, reduce bad debt, lighten the charity care burden and shorten A/R days to improve cash flow.
Financial advocacy increases a hospital’s focus on patient engagement, a key factor in patient satisfaction; and helps address the price transparency mandate by moving financial conversations from the back end of the revenue cycle to the front end. Importantly, they contribute to a patient-centered experience to cement loyalty and improve a hospital’s standing in the community—much-needed advantages during the pandemic and going forward.
Jill Barton is Vice President of Revenue Cycle at Montefiore St. Luke’s Cornwall Hospital, a hospital in Newburgh, New York.
David Shelton is SVP of Firstsource, a leader in business process management services.