With critics around the country increasingly questioning whether nonprofit hospitals are providing enough charity care to justify their tax-exempt status, the pressure is on for nonprofits to demonstrate their charitable duties and put their financial assistance programs to work.
FierceHealthFinance talked to George Semko (pictured), vice president of Revenue Cycle at Meritus Health System in Maryland, about how the organization is serving financially disadvantaged patients in a post-reform healthcare landscape.
FierceHealthFinance: In light of Affordable Care Act regulations, how is Meritus Health System fulfilling its charity care mission?
George Semko: Basically through financial systems policies. While we do have financial systems polices, we utilize an outside company, Financial Health, to be our financial counselors. Patients can come and sit and talk to them and fill out a financial application. And they'll work with those patients--whether it's financial aid or getting them applied for medical eligibility--and look for any way we can adjudicate that claim on behalf of the patient to secure funds for the hospitals while securing peace of mind for the patient.
We apply 200 percent of the federal poverty guideline on the non-hospital side in the state of Maryland. On the hospital-side, the Health Services Cost Review Commission (HSCRC) requires us only to give 2 percent to 3 percent discounts, only because in Maryland we're billing it at a dollar amount, not at a gross charge rate.
We do have an unregulated side, which is more like the physician's offices, and more equivalent to the other 49 states, where we offer a 35 percent self-pay discount and the charity care policy for all those services as well.
But to make it easier for the patient, we give them the ability to do it online if they have that capability; we have people here on-site they can come in and spend a half hour with or whatever amount of time they need. Those same financial counselors also will go to the home and work with the patient in their home if need be.
We're being upfront with it and trying to be charitable and financially conscious at the same time.
FHF: With millions of un- and underinsured Americans struggling to afford healthcare services, what can hospitals do to increase participation in their charity care programs to avoid bad debt?
Semko: It goes back to a lot of what we've done already. You've got to make patients aware and realize the fact that yes we are going to try to collect money from you but we're really being a financial advocate to you to settle this bill
If there is a means for us to get money through a medical assistance program, or in a lot of cases there's self-pay patients who come in the hospital and they don't realize they could be charged to their homeowners insurance or it could be an auto claim or a worker's comp claim, those discussions are happening through the process.
So it's a matter of putting the programs out there but then being proactive. We can go to the homes and have that conversation if the patient doesn't have transportation--we'll actually go to the home and fill out the application with them, such as a Medicaid application, or we provide it online.
FHF: How does Meritus communicate the availability of charity care programs to patients and their families?
Semko: We're putting it out there but we're making them aware of it. We have our financial aid policy published every year. It's on our website, it's in various locations. Every registration site within the hospital or health system has our policy straight front and center, and it's also noted during the registration process and on one of our forms that financial aid is available.
Patients can apply proactively before their appointment or their surgery, or they can do it after. We're trying to catch them every which way. It's more the idea of getting the patient comfortable and that it's okay to ask for help--getting to that point is really what it boils down to.
A lot of it is pride and once patients get past the fact we're just not going after money, we're after trying to settle that bill--whether it's charity or getting another insurance to cover it--once they get comfortable with that we can go forward.
FHF: Tax exemptions for nonprofit hospitals have been coming under scrutiny. How has Meritus Health System responded?
Semko: About a year ago we completely redid our financial aid policies to become more proactive and more lenient, if you will. Prior to this, at one point it was 100 percent of the federal health poverty guideline; now we're at 200 percent of the guideline. And will that continue to grow to be 300 percent or 400 percent is to be determined.
Again, Maryland is unique compared to the other 49 states where those numbers would be 400 percent. But we bill a lot at net charges, not at gross charges, which is a big difference in that number.
We're under what we consider population health here. We're a total patient revenue facility where we're basically capitated on the hospital business. From our standpoint, it's getting what we need to get done, treating the whole population, whether they're coming in through the ED or elsewhere. Population health means we're going to take care of those patients one way or another; paid or not, we're going to do what we do best for the patient.
That whole approach is not strictly clinical. You've got to treat the patient properly, clinically and financially--that's the holistic approach.
FHF: What billing process best practices would you recommend to other nonprofit hospitals?
Semko: Every organization is different but it's trying to make your bill as clear as possible. In our case, now that we have our physicians and hospitals on the same self-pay vendor, that conversation can happen on both sides of the coin.
Most patients will come in and say 'Okay, I paid my hospital bill, why am I getting these physician bills from anesthesia, surgery.' If you can make that at least one self-pay discussion--maybe they're different bills but it's one self-pay discussion--that representative can marry all of those together and the patient will understand it then.
It's really more and more around education and having people in a customer service environment and financial counseling environment to answer the patients' calls.
In our case, when it goes to the self-pay area, those representatives have complete access to our systems where they can see the evolution of that account--they can see the patient was here for surgery, they can see it was billed to Blue Cross, Blue Cross paid x dollars and how the account got to that $100 balance.
It's that education as much as you can, but it's also that live person being able to talk to patients so they understand their bill.
Editor's note: This interview has been edited for length and for clarity.