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Now, I’m quite sympathetic to their plight but my job, as I see it, is to help them. You see, people want two things more than anything else…respect from others and self respect. My job is to respectfully help them find a way to fulfill their financial obligation to the hospital and maintain their self respect.  If you show respect to all patients (not just the nice ones) and help them maintain their dignity and self-respect by giving them the opportunity to pay their obligation, they will most likely find a way to pay.

I thought it might be helpful to review the top five reasons patients have used to not pay their bill and how I showed them they could pay their bill.

Reason #1: “I haven’t returned to work after my illness/injury.”

Trixie was hospitalized for a fall at home that left her with several broken bones and a concussion. She had about another month at home before she would be allowed to return to work. As a self-pay patient, she was certain there was no way she could afford the hospital bill.

Solution: “Well Trixie, the hospital has a program where you could pay a little on your bill every month and keep your account from being turned over to collections. How does a payment of $50 a month sound?’

Trixie was thrilled to be able to pay over time and said she could afford maybe more once she returned to work.

Reason #2: “I’m paying on other medical bills and will start paying on this one when the others are paid.”

Bill was starting to make payments on several medical bills as a result of surgery. He had to pay several specialists including an anesthesiologist, radiologist, and a pathologist, as well as the surgeon who performed the surgery. It was confusing enough that these other doctor bills seemed to come out of nowhere. He never saw the radiologist or the pathologist and barely remembers the nice woman who “put him under” immediately before the surgery began. That must have been the anesthesiologist.

Anyway, Bill made it clear he absolutely wanted to pay the hospital bill but, well, that bill would have to take a back seat to these doctor bills.

Solution: “Hey Bill, would it work to perhaps pay a little less on each of your doctor bills every month and make a small monthly payment to the hospital? You don’t want your hospital bill to get so old that it is sent to collections. Making small monthly payments will keep it out of collections and you’ll still be able to pay your doctor bills, as well. Would $65 a month fit into your budget?”

Bill was able to adjust the amounts he was sending to the doctors and make a $65 per month payment to the hospital.

Reason #3: “How can I pay the hospital? I have to feed my family!”

Joanie was the mother of two grade-school age children, managing things by herself. She was insured under her company’s health insurance but it had a $3,000 deductible. She had several outpatient visits and ended up with $2,700 in out-of-pocket expenses. Her first words to me were, “This is a bill I just can’t pay right now. I have to feed my family!”

Solution: I told Joanie that I understood her situation and of course she had to feed her family! I asked her if she couldn’t pay her bill in full if she could perhaps pay a small amount every month? You see, she thought the only way of paying the bill and not being sent to collections was to pay it all at once. I explained to her that she could make payments of as little as $45 per month until the account was paid in full. She was thrilled that the hospital would take monthly payments and enrolled in the payment plan immediately.

Reason #4: “My car broke down and I either get it fixed or pay my hospital bill. I need my car to get to work.”   

When Chad told me his car broke down, I couldn’t help but have some sympathy for his situation. It was bad enough that he was recently discharged from the hospital but then to have a car break down was adding insult to injury. He said he could start a payment plan next month but said he had to borrow money from his brother to get his car fixed. Next week’s paycheck would go toward paying his brother back.

Solution: I explained how the payment plan worked, and that the first payment wouldn’t be due for approximately four to six weeks. I could hear the relief on the other end. I explained that I had an agreement that he needed to sign and return to me and after I received the agreement, he would begin receiving monthly statements about two weeks before the due date. The Midland Managed Payment Plan offers three due dates to choose from—the 10^th, 20^th or 30^th of each month and patients can choose the one that works best for them.

Reason #5: “I’m waiting on my income tax refund.”

When I called John about setting up a monthly payment plan, he said he didn’t want to make monthly arrangements. His plan was to pay it in full when he received his income tax refund. Well, the problem was I was calling in September. The soonest he could receive a tax refund was February. I knew the account would age and be sent to collections before he received his refund.

Solution:  I told John how great it was that he could pay his bill in full with his tax refund but by the time that happened, it would be too late and his account would likely be sent to collections. I asked if he could pay a little bit every month until he received his tax refund and then he could pay it in full. I explained that with The Midland Managed Payment Plan, he could pay his account in full without a pre-payment penalty. We agreed on $45 per month, which seemed to fit well within his budget. Again, he thought he had to pay the bill in full all at once. He was thrilled that the hospital would take monthly payments.

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In a program delivered October 10, 2001, HFMA identified ten self-pay activities consistently practiced by better performing hospitals. Among these, the utilization and outsourcing of Medicaid and alternative state funding application processes. For years, Medicaid eligibility vendors like The Midland Group were charged with the heavy lifting that was–and still is–the Medicaid eligibility process for uninsured patients. While uninsured patients needing Medicaid application assistance is still a small percentage of the total patient population, the 80-20 rule generally prevails on several levels:

• 80 percent of the uninsured patients would not be able to start and/or complete a Medicaid application on their own;
• 80 percent (or more) of a hospital’s revenue cycle staff time is spent on 20 percent (or less) of insured accounts–difficult accounts with big dollars attached, leaving little time to help uninsured patients with their Medicaid application;
• Considering all admission types (inpatient, outpatient and emergency), there is an 80 percent chance that an uninsured patient will need follow up care and perhaps readmit for the same diagnosis.

Over the last few years, some hospitals have attempted to take the eligibility process in house. The results, although anecdotal, have not been inspiring, causing some hospitals to re-hire the very vendors they let go when they thought they could do it themselves.

So, here are my three reasons why Medicaid eligibility vendors are still essential for hospitals:

Resources.

Well-established Medicaid eligibility vendors are connected to a variety of outside resources needed to get the job done. An example would be the staff at the rescue mission who knows that a certain discharged patient sleeps under a certain bridge at night and occasionally comes in to the rescue mission when the weather is bad. Can’t find that patient with the $140,000 bill? Medicaid eligibility vendors use private investigators to find patients who are needed to sign an application. They do not come cheap. Then there are the case workers who approve the applications. Does a particular patient’s case need special attention due to a need for expedited discharge planning? Medicaid eligibility vendors have established relationships with case workers and are well-versed on the bureaucratic procedures within the agencies.

Consistency.

Can hospital staff locate and screen patients, process the necessary applications with all required documentation (oh, and pay for that documentation when necessary) and follow up with the Medicaid case worker after the application has been submitted? What about appeals? It is not uncommon for Medicaid case workers to make inaccurate denials on pending applications. Does hospital personnel have the knowledge and persistence to challenge the decision–or does the account get written off?

Can they do all this–and much more–consistently, 7 days a week, 365 days a year?

Technology.

The typical public benefits eligibility specialist can manage about 100 to 120 cases at a time. However, that is not without the technological tools needed to maximize call tracking, manage and notate cases, prioritize tasks, as well as create and document written communication with patients, physicians or case workers involved with the eligibility process. To reach a large volume of patients in a timely manner following discharge, a progressive VoIP telephone communication system is essential. On top of it all, databases, communication and call centers have to be managed by people who are experienced with the nuances of healthcare and all the rules that come with it, i.e. HIPAA.

These tools do not come cheap. A public benefits eligibility vendor with many hospital customers can utilize economies of scale and absorb the cost of these technologies into their overhead. Managing the tens of thousands of patients from multiple hospitals is less expensive on a per-patient basis compared to a few hundred from one hospital.

On the surface, it is understandable why hospitals would desire to take control of eligibility cases. It is not always obvious to hospitals the amount of work, expertise, support staff time and overhead that goes into the process.

And, let’s face it, not all eligibility vendors are good…just like not all doctors are good. But, that doesn’t mean you don’t find and use good doctors when you need them.

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One of my favorite stories (second only to the 10 circus performers who were in a Chevy Citation when they had a fender bender) involved Arlen (not his real name, of course). Arlen was apparently traveling back to his home in Imperial, Nebraska. He had enjoyed a long weekend fishing with some buddies near Elk City,Oklahoma, where he grew up. He had more than 25 pounds of frozen fish in his car and knew he was on a short timeline for getting the fish back home before they went bad. He was making his way through Kansas on the long and unbelievably tortuous route back to Imperial.

On the way home, Arlen had an issue. About the time he was making his way past Dodge City on US-283, he came upon a long line of cars and trucks backed up behind what had to be the biggest combine he had ever seen. Being from Nebraska, that was saying something. Anyhow, after about 45 minutes of 12-mile-an-hour driving, Arlen thought he smelled something…fishy.

I suppose what happened next is typically called “road rage.” Arlen didn’t care that there was a car ahead of him. He stepped on the accelerator, perhaps thinking he could just push the cars ahead of him out of the way. That didn’t work out so well. After rearending the vehicle in front of him, Arlen involuntarily enlisted the assistance of the Ford County Sheriff.

The people in the car he hit were lucky. They were buckled in and nearly at a complete stop when they were hit. But Arlen ended up doing time…in the hospital. And that is where I came in. As a professional hospital accident lien specialist, I reviewed the facts of this case:

• The patient was at fault
• The patient lived in Nebraska
• The accident happened in Kansas, AND
• The patient had an Oklahoma policy.

Is there a case for a lien, or not?

The first thing we did was set up a PIP (Personal Injury Protection) claim. Even though it was an intentional act, the patient was not trying to harm himself, so PIP coverage on this patient account would apply. Being in regular communication with the hospital patient accounts staff, I found out they received calls from Arlen about every other day. They deal with thousands of hospital patient bills, but this one seemed unusual. He seemed to be focused on the bill…an itemized bill.

My insticts told me something was very wrong.

I called the insurance company. In speaking with the adjuster, I learned that she, too, had received a call from Arlen. Arlen requested to be paid directly and that he indicated he would pay his hospital bill…he promised! After all the years I had been doing hospital accident liens in Kansas, as well as many other states, I knew that Kansas insurance companies normally pay providers directly unless the patient requests otherwise. And while liens on PIP claims are rare, they aren’t unheard of. Arlen, as it turned out, must have been an insurance adjuster in a previous life. Most patients are unaware that if they have an auto accident in Kansas they have PIP coverage, regardless of the state their policy was written in.

I filed a lien on the PIP coverage and protected the hospital’s interest on this claim. If I had not filed a lien, the PIP money would have been paid directly to Arlen and, while I would love to believe that Arlen would have paid the hospital for their services, I think the hospital was relieved that they didn’t have to find out otherwise.

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Every hospital CFO or patient accounts director has had vendors come through their door touting how great they are. The statistics they may throw around are likely to sound impressive. They may even say something like, “If your current vendor isn’t converting x percent of self-pay patients to Medicaid, they aren’t doing their job,” in hopes of unseating the current vendor. But, as the saying goes, there are three kinds of lies: lies, damned lies, and statistics and there is plenty to cause suspicion when a vendor starts throwing numbers around.

The key question regarding evaluating the effectiveness of a Medicaid eligibility program is what data is most meaningful and how is it calculated? Do you have a set of key indicators that allow you to measure and determine the success of the program for both the patients and facility? If your Medicaid eligibility vendor provides those metrics, do you know how they are calculated?

As the Song Goes, Let’s Start at the Very Beginning

So, let’s set the record straight. In order to honestly measure the effectiveness of the Medicaid eligibility services being provided, whether provided by in-house staff or outsourced to a Medicaid eligibility vendor, start at the beginning. The beginning is total number of uninsured patients registered at your facility. Sure, there will be a few that will be classified as self pay who are covered. People are people—they can’t remember; they forget their insurance card; they don’t know. But, these numbers are (or should be) relatively low. By using the total number of uninsured patients registered at your facility as the starting point, we are making the assumption that whoever is responsible for screening these people are actually tasked with screening all of them. Does your facility carve out certain patient types before referring them to the eligibility vendor? High dollar cases? NICUs? Labor and delivery cases? If so, your beginning starts with the balance of what is left. Whether you do or don’t carve out patient types isn’t as important as being able to document the final number that the vendor is charged with screening. THIS is the beginning.

When is Being Accepted a Bad Thing?

The next step in the Medicaid eligibility process is finding the right balance of case acceptance. Does your current vendor take all cases? Do they take only the high dollar cases? Do they cherry pick the obvious? They shouldn’t be doing any of the above and here’s why:

They take all cases: They’re completing applications on people who haven’t a prayer of qualifying for Medicaid. They throw Medicaid applications at the county case workers like Carlos Carrasco* throws pitches at terrified batters—pitches that are worthless, a waste of time and are likely to hurt. Why is this bad? Well, while those cases are in suspension waiting for a decision, they’re on your books and likely not being worked for charity assistance or being put into a patient payment plan. And it doesn’t do much for your relationship with the county case workers, either.

 While taking cases that are not going to qualify for benefits may make the vendor’s acceptance rate look good, if they are reporting their success rate honestly, it will be reflected in a dismal success rate.

Cherry picking high-dollar cases:       A Medicaid eligibility vendor that chooses to focus on  high dollar cases at the expense of lower dollar cases is doing so for workload reasons. The low dollar cases are just as much work as the high dollar cases but there are a lot more of them, requiring more staff resulting in lower margins per case for the vendor. The bad news for the hospital is there is a lot of money being left on the table when lower dollar cases are not worked.

Cherry picking the obvious: Again, like the high-dollar cases, a vendor may cherry pick the obvious and easy cases for workload reasons leaving a lot of money on the table that the hospital could recover.

The point is a vendor should be taking cases with merit, period. And a really good vendor will push the envelope and take the cases that are iffy and work like heck to get them approved. It is those cases where the vendor really earns their money and can truly call themselves a patient advocate. And remember, the local market demographics and economy will also have a bearing on the merit of the cases being considered.

Win or Lose…but We Never Lose

Win rates, or the number of cases that are approved for benefits compared with the number of cases accepted, can be telling. A vendor that wins 100 percent of the cases they accept should be suspect. Every vendor has situations where the case becomes impossible to win. Patients disappear (homeless), become uncooperative, or decide they do not want to apply for benefits, which is their choice. Aside from these situations,  a perfect record or near perfect record almost always indicates that the vendor is cherry picking or not reporting accurately. Conversely, a low win rate may indicate problems in other areas, such as accepting too many cases without merit. But, it could also mean that there is an issue with the agency responsible for making the Medicaid eligibility determination.

Getting Down to Brass Tacks: the Conversion Rate

The conversion rate is the number of patients whose applications for Medicaid benefits were approved divided by the total number of patients who were screened for benefits. In other words, if the conversion rate is 33 percent, it means that one of every three uninsured patients who walks through the door of the hospital is converted to a patient with insurance coverage. This number is the most important. And it is a number that can vary widely. A conversion rate of 20 percent might be excellent considering the demographics and economic conditions of the local market. The same 20 percent conversion rate in a different market might indicate a problem. It also depends on the patient mix. Inpatient only? Outpatient/Emergency only? All patient types?

But, back to Brian, the patient accounts director. He kind of felt sorry for the vendor after he politely tossed a few inquiring questions back at him. Do you have a set of key indicators that allows you to measure and determine the success of the program and how those indicators are calculated?

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On the other side of town, sitting in his office, working through lunch, is the business office director of Bunny’s hospital. The hospital that Bunny was transported to after her accident. The one that keeps sending Bunny those pesky envelopes. His name is Kevin and today, Kevin is not happy. The phone conversation with Acme Insurance did not go well. The nice lady at Acme had just finished explaining to Kevin that, unless there is an accident lien filed, the payment goes directly to the patient and it is up to the hospital to seek reimbursement from the patient. The sick feeling in Kevin’s stomach is justified. He knows that once the payment on an accident claim goes directly to the patient, the likelihood of getting the patient to pay their hospital bill is remote. He also knows that filing liens is far from simple and Bunny’s account is just one of many for Kevin’s hospital, which has the distinction of being a Trauma 1 facility on a major interstate. What is he going to do about the never ending parade of accident accounts that come through his office? Accounts worth millions in charges. Kevin ponders his options…and opens a fresh bottle of his new best friend, Pepto-Bismol.

While accident/liability claims may be a small percentage of a hospital’s total patient revenue, the benefit of filing accident/liability liens on these claims is clear: reimbursement usually goes directly to the hospital and, as a percent of charges, is exceptional—usually 90 to 100 percent. But hope is not a good strategy for recovering charges from accident/liability claims and a good lien specialist is worth their weight in gold—or reimbursement—when it comes to the nuances of getting to the final payment.

Meet Carmen. Carmen is a lien specialist—and she weighs a lot. Well, not in pounds but in terms of the amount of reimbursement she brings in for her hospitals. Carmen has some tips for hospitals with aspiring lien specialists:

1. Don’t leave additional accounts incurred after the initial date of service off the lien. Review the system daily for new accounts associated with an accident for which a lien has already been filed. To include additional accounts on a lien that has been filed, you must amend the lien to include those accounts and you must do so before it settles!!!
2. If a lien isn’t applicable in a situation, you may be able to file a claim (not a lien) on Medical-Payments (med-pay) insurance, PIP (in certain states), or underinsured/uninsured motorist, all coverage options available to the auto policyholder. Payment for medical bills may also be requested from the liability carrier in the event that the patient has settled his bodily injury claim before the carrier receives all medical bills. This type of reimbursement is often called “Meds Incurred.”
3. Depending on the circumstances, it may be necessary to file a med-pay claim, an underinsured motorist claim and a lien for an accident account. These claims can be filed with the insurance company for the at-fault party, the patient’s insurance company and if the patient was a passenger in a motor vehicle, with the driver’s insurance company as well. You can also file two liens if each insurance company will only accept a percentage of liability.
4. Once the claim settles, it can be a challenge to get the settlement from the attorney or patient—even in situations where the hospital’s name is on the check. Persevere and continue to work with these entities until payment is received. In some cases, hospital counsel (or vendor counsel if liens are outsourced) should contact them for payment of the lien that was filed.
5. When the patient’s bills exceed the limits of liability, the hospital must be present at an Interpleader or risk the possibility of coming away empty handed. Remember, it is likely that many parties will have an interest in all or part of the final award. Legal representation at the Interpleader is necessary to ensure that the hospital’s interests are protected.
6. If the patient changes legal representation, the lien should be amended with the name of the new attorney of record. Therefore, it is imperative that you maintain contact with the patient and/or the patient’s attorney.

The moral of this story is that every hospital needs a Carmen—a knowledgeable, persistent and resourceful lien professional—because like it or not, every hospital has a Bunny, or two. And because of people like Carmen, hospitals get paid, fewer sports cars are sold, and sick stomachs are a thing of the past.

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