Evolving legislation related to financial assistance, debt collection practices and patient data protections can affect hospitals' revenue cycle if revenue management leaders are not vigilant and adaptive. To comply with these regulations, organizations ought to strengthen efforts to understand patients' economic realities and build empathy into billing practices.
During a RevSpring-sponsored session at Becker's Health IT + RCM Virtual Conference, April Wilson, vice president of analytics at RevSpring, discussed three key rulings that impact how providers interact with patients. These rulings underscore the importance of gleaning insights from patient data to advance payment-related engagement.
There were three main sets of recommendations:
1.) Acting transparently is paramount to ensure financial assistance is made available to those in need. To support patients of nonprofit hospitals who qualify for such assistance, which is a critical component of 501(r), Ms. Wilson highlighted the importance of:
- Facilitating financial assistance policy by making it easy to find and read. Providers should make the policy available in the languages spoken in the community and publicize it via facility signage, awareness campaigns and strategically placed links within digital patient communications.
- Applying consistent processes to screen all patients for eligibility. Instead of requiring applications, which put the onus on patients and may be incomplete or get lost, presumptive charity scoring should be considered.
- Eliminating credit-based scoring as a proxy for establishing financial need. Because around 25 percent of users lack a credit file to begin with, demographic data and past payments history, which capture about 95 percent of a community's population, are more reliable metrics.
- Providing free care to the needy. Charity care characterized as financial assistance "beats" debt accrued from unpaid medical bills. "From a nuanced perspective, it is always beneficial for a nonprofit healthcare provider to have less bad debt and more charity care in the communities they serve," Ms. Wilson said.
2.) A New Mexico-specific regulation could be a harbinger for how 501(r) may evolve in the future. The state's Patients' Debt Collections Practices Act requires that when billing New Mexico residents receiving care anywhere in the U.S., nonprofit hospitals ought to take additional steps before they refer medical debt for collection. These steps include:
- Barring third-party debt collections from any patient making up to 200 percent of the federal poverty limit. Some hospitals voluntarily raise this threshold to 250 or 300 percent.
- Providing health insurance verification and discussing public insurance options with patients before seeking payment. Many hospitals already have such processes in place, but they are often integrated at the front end (pre-service or at the point of care) and not at the back end, which is relevant in emergency situations that may not allow for upfront due diligence.
- Standardizing billing statements and receipts so that they reflect whether insurance status has been verified, and vetting for financial assistance completed, to help determine what — if any — self-pay responsibility the patient has and any payments toward the balance.
3.) Debt collection agencies must extend patient data protections through last-mile servicers. Citing a July court decision known as the Hunstein ruling, Ms. Wilson noted the importance of continuing to protect patient privacy once debt management is in the hands of collectors; this includes their commercial partners, such as letter preparation vendors and mail servicers.
Some ways to achieve data protection is by tokenizing, masking or "hashing" it — terms used to describe various ways of anonymization. Beyond purely technical solutions, however, she said providers are best protected against such risks by making sure they are "working with a vendor who's aware of the ruling and who understands the impact of it to your business."
To learn more about the event, click here.