Even under ACA, hospital bad debt could mount

Despite millions of Americans gaining insurance coverage as a result of the Affordable Care Act, hospitals may still have to more effectively manage bad debt.

Many individuals who purchase coverage through the health insurance exchanges are likely to purchase the lower-cost bronze health plans, which have higher out-of-pocket costs, including for ER visits and hospital stays, according to the Nashville Business Journal,. The publication cited data linking higher out-of-pocket cost plans to higher levels of uncollected debt.

Worries about the long-term prospects of hospitals have concerned ratings agencies, such as Standard & Poor's. As a result, some hospitals beefed up their collections processes ahead of the rollout of the ACA early next year.

"They are really stepping up their point of service collections, training and educating their frontline staff in a way they really hadn't done previously for how to ask for money," Bill Hannah, a principal with the consulting firm DHG Healthcare, told the Business Journal. "We are seeing folks being much more creative in how they will set up payment plans, offering point of service discounts on self-pay portion where they can, utilizing new technologies to try to identify deductibles, co-pays, what those are."

On the government payer end, the cost of providing care is outstripping reimbursements, forcing some hospitals to cut expenses. Baylor Health Care System, one of the largest providers in the Southwest, has plans to reduce expenses by $275 million both this year and in 2014, after already trimming them by a combined $250 million in 2011 and 2012, reported the Dallas/Fort Worth Healthcare Daily.

To learn more:
- read the Nashville Business Journal article
- here's the Dallas/Fort Worth Healthcare Daily article

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