Outside financial aid might not be the best long-term solution to the national problem of high healthcare costs and inadequate insurance coverage, but two rural hospitals are taking innovative approaches to tapping philanthropic resources to reduce their bad debt and help patients with medical bills.
The American Hospital Association’s latest Annual Survey of Hospitals showed that hospitals provided $41.6 billion in uncompensated care in 2019. Thanks to the COVID-19 pandemic, the latest numbers are even higher, with a Kauffman Hall report showing that 47% of revenue cycles saw increases in bad debt and uncompensated care in 2020.
Here’s how Wayne Memorial and Ballad Health are using financial aid to help alleviate medical bills for their rural populations and reduce bad debt.
WAYNE MEMORIAL HOSPITAL, GEORGIA
Wayne Memorial Hospital, a small, rural community hospital in Jesup, Georgia, that partners with other regional providers to offer oncology infusion services, is using an AI-powered tool from Atlas Health to help it scour a database of more than 10,000 financial aid programs and match and enroll patients in those for which they qualify. Wayne Memorial uses Atlas for all patients who need high-cost infusions, injections, and oral medications.
Before putting this technology in place, Wayne Memorial could dedicate only one employee to manually search for programs to help patients with their out-of-pocket expenses, says its CFO Greg Jones.
“We were able to assist maybe 10-20% of our patients through a select few programs, while the remainder of the patients’ out-of-pocket responsibility was written off to the hospital’s charity or bad debt,” he told HealthLeaders by email.
That was frustrating, not only because Wayne Memorial serves patients who Jones says feel like “family” in its small community, but also for the financial health of the hospital.
“Rural hospitals can go down quickly if they aren’t attentive to these trends,” he says. “Everything counts.”
The technology uses pre-populated application forms with mapped EMR data, and once it matches patients to programs, it automates document collection and consent and application submission. It also includes tracking tools, a reimbursement workflow, and reporting module.
Within the first 90 days of implementation, Wayne Memorial exceeded its philanthropic goal by 185%, Jones says. In the next 90 days it exceeded its goal by 134%, thanks to maintaining patient involvement in the programs and enrolling new patients.
“We anticipate that we will exceed our goal for the year by at least 110% as our hospital is on track to capture over one million dollars in philanthropic aid for our patients,” Jones says. “This is for balances that would have otherwise been written off to charity or bad debt.”
For its infusion center patients, it was especially meaningful. Every patient infused at the center was screened for a program, compared to just 10-20% patients previously. And Atlas data also showed that roughly 30% of the infusion center’s patients could be eligible for the state-funded program, Georgia Cancer State Aid, Jones said.
BALLAD HEALTH, TENNESSEE AND VIRGINIA
Over the past several years, Ballad Health in rural Appalachia has updated its charity care policy and reduced its care costs. For instance, it’s raised its eligibility for full charity from 200% to 225% of the federal poverty limit, reduced charges for urgent care services by 17%, and increased self-pay discounts to 85% off charges.
It’s also entered into unique merger agreements with the state of Tennessee and the commonwealth of Virginia to transform it from a traditional health system into a community health improvement organization.
Although these changes will help patients with their new and future out-of-pocket costs, it didn’t solve the problem of patients’ existing medical debt.
That’s why Ballad Health partnered with the national nonprofit RIP Medical Debt to eliminate $277,974,370.31 of non-governmental payer medical debt for approximately 82,000 people previously served by Ballad Health.
It’s the first time that RIP purchased the debt directly from a hospital.
RIP uses donated funds to purchase medical debts belonging to financially burdened people. Previously, it has provided debt relief by acquiring accounts from the secondary debt market, such as debt buyers and collection agencies.
But in July 2020 the Department of Health and Human Services Office of the Inspector General issued Advisory Opinion #20-04, allowing hospitals and physician groups to sell or donate debts directly to RIP for the purpose of abolishing a patient’s liability under certain conditions.
Now, RIP and Ballad Health say their new agreement could serve as a test case for many other health systems nationwide.
“Nearly everyone who will receive their debt abolishment through this collaboration with RIP Medical Debt qualifies for our updated charity care policy, but for various reasons they either did not qualify at the time or did not take advantage of it in prior years,” Anthony Keck, Ballad Health’s chief population health officer, said in a statement. “By removing this burden of old debt, we hope to better engage with our patients, so they access care and other services when they need them without the fear of unmanageable expenses.”