A Case for Patient Friendly Collections Tom Gavinski, Vice President, Healthcare Division I.C....

A Case for Patient Friendly Collections

Tom Gavinski, Vice President, Healthcare DivisionI.C. System, [email protected]

Medical Debt Task Force:Observations and Recommendations

Tom Gavinski I.C. System, Inc.Tina Hanson State Collection Service, Inc.Lucia Lebens ACA International

• VP, Healthcare Division, I.C. System, Inc.• VP, Patient Financial Services, Allina • VP, Human Resources Service Center, Allina• VP, Corporate Collections, Sisters of St. Francis

Health System, Indianapolis, IN. (Now Franciscan Healthcare) • President, Allina Receivable Services • MBA Certificate Healthcare Management• Chairman, Associated Healthcare Credit Union, 2001-2013• ACA International Board of Director 2012-2013 • Executive Director, National Healthcare Collectors

Association, 1993-1998• Current Past President Minnesota Association of Collectors• Recipient of The HFMA Bronze and Silver Awards

Tom Gavinski, Vice President, Healthcare Division ─ I.C. System, Inc.

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Over 20 years Past Hospital Revenue Cycle Management Experience

Allina Hospitals and Clinics, Minneapolis, MN Sisters of St. Francis Healthcare, Indianapolis, IN

Mergers Acquisitions Divestitures Closures OIG Investigations Attorney General Investigations Revenue Cycle Improvement Projects Self Pay Management Initiatives

Healthcare Experience

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Who is Allina Hospitals and Clinics?

•$2.5 Billion In Net Revenue

•11 Owned Hospitals

•1782 Staffed Beds

•63 Owned Clinics

•670 Providers

•Minnesota and Wisconsin

•$700M Accounts Receivable

The Uninsured Crises in America…What’s a Provider To Do?

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• Comprised of:

• 11 Hospitals

• 63 Clinics

• Specialty Operations

• Employs more than 22,000 people; including about 670 physicians

• In 2008:

• 2.1 million+ clinic visits

• 111,000+ inpatient admissions

• 730,000+ outpatient admissions

• 1,782 staffed beds

Allina Hospitals and Clinics Today

• I.C. System is one of the largest privately owned accounts receivable management companies in the United States.

• Established in 1938 – 75 Years Old• 800 Employees• 3 Office Locations• $50M Annual Revenue• 30,000 Clients in all

50 States

I.C. System, Inc., today

Greetings From theGreat State of Minnesota


Minnesota 60-61

Tom Gavinski, Vice PresidentHealthcare Division I.C. System, Inc.

40 years Credit/Collections Experience

• Paper Boy

• Sears

• Collection Agency

• Health Care

Medical Debt Task Force:Observations and Recommendations

Presented by:

Thomas Gavinski, Tina Hanson and Lucia Lebens

Any content included in this presentation or discussed during this session (“Content”) is presented for educational and general reference purposes only. ACA International, either directly or indirectly through speakers, independent contractors, employees or members of ACA International (collectively referred to as “ACA”) provides the Content as a courtesy to be used for informational purposes only. The Contents are not intended to serve as legal or other advice. ACA does not represent or warrant that the Content is accurate, complete or current for any specific or particular purpose or application.

This information is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel. ACA is the sole owner of the Contents and all the associated copyrights. ACA hereby grants a limited license to the Contents solely in accordance with the copyright policy provided at www.acainternational.org. By using the Contents in any way, whether or not authorized, the user assumes all risk and hereby releases ACA from any liability associated with the Content.

The views and opinions of the speakers expressed herein are solely those of the presenters and not ACA International.

Legal Disclaimer

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• How did we get here?

• Why now (or what’s going in in Washington)?

• How has the industry responded?

Agenda

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March 2013 Bitter Pill: Why Medical Bills Are Killing UsBy Steven Brill

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Medical Bill Problems Among Working Aged Americans

In 2012, 75 million (41%) working aged American adults experienced medical bill problems

• Problems paying or unable to pay medical bill

• Contacted by a collection agency for unpaid medical bill

• Changed way of life in order to pay medical bill

• Medical bills being paid off over time

Source: The Commonwealth Fund Biennial Health Insurance Survey (2012)

Consumer Pain Points

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In 2012, 32 million American adults were contacted by a collection agency for unpaid medical bills

Source: The Commonwealth Fund Biennial Health Insurance Survey (2012)

Medical Bill Collections

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• More than half (52%) of accounts in collection are medical bills

• More than one-third (36%) of medical collections had balances due, when reported, of $100 or less

An Overview of Consumer Data and Credit Reporting, Avery et al Federal Reserve Bulletin, Summer 2003

Medical Collections and Credit Reports

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Medical Billing Confusion

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• One out of ten medical claims is processed inaccurately by health insurers, according to an American Medical Association survey

• Nearly one in three Americans (31%) let a medical bill go to collection because they did not understand the bill or explanation of benefits statement, according to an Intuit Health Survey

• Hospitals and other healthcare providers must collect hundreds of billions of dollars in deductibles, co-payments, and co-insurance directly from patients

• Denial management systems must be put in place to effectively address claims that are rejected or denied

• Hospitals provided $41 billion in uncompensated care in 2011

• Aforementioned media attention

Healthcare Provider Pain Points

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A Convergence of Issues…

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Consumer Trends:•Increased Use of HDHPs•Tighter Lending Standards

Consumer Trends:•Increased Use of HDHPs•Tighter Lending Standards

Environment Ripe for

Legislative/ Regulatory

Action

Provider Challenges: •Non-Standardized Account Resolution Processes•Opaque Pricing•Challenges Accessing Financial Assistance

Provider Challenges: •Non-Standardized Account Resolution Processes•Opaque Pricing•Challenges Accessing Financial Assistance



• How has HFMA and the industry responded?

Agenda

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Why Are We Here: What Is the Message in DC

•Small Medical Debt Numbers are Growing

•Credit Reporting Issues

•Need to Help Jump Start the Economy

•People Don’t Ask to Get Sick/Have an Accident

Current Environment

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Medical Debt Responsibility Act of 2013 – S. 160

•Introduced by Senator Merkley

•7 co-sponsors

•August 2012 – Senators Merkley, Schumer, Brown and Menendez sent letter to Corday asking CFPB to address impact of medical debt and consumer credit

•House companion bill (HR 1767) introduced by Ranking Financial Services Member M. Waters

Congressional Legislation

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Accuracy In Reporting Medical Debt Act

•Introduced by G. Miller (R-CA) along w/ C. McCarthy (D-NY)

•Challenges:– Will make letters longer given the required language, which

can increase costs.

– If debt is disputed in writing, no credit reporting for 120 days.

– Since it's under the FDCPA, still have the threat of litigation i.e. stray from the required language or miss a timely dispute.

Congressional Legislation – Cont.

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Accuracy In Reporting Medical Debt Act – Continued

Opportunities:

–The language regarding the credit reporting notice is mandatory on all medical debt letters.

–You can still submit the account for credit reporting if you don't receive a dispute within 30 days.

Congressional Legislation – Cont.

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Proposed Rule - IRS 501r

•US Dept. Treasury and IRS Proposal

•Seeking revisions for charitable hospitals and their tax exemption status

•Concerned it will cause duplicative federal, state and local financial assistance requirements

•Should be shared responsibility between providers, payers and patients in making eligibility determinations

•Coordinated messaging between ACA, AHA, AHAMM & HFMA

Proposed Regulation

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• Created under Dodd Frank Act of 2010• Treated as an independent federal agency• Mission to make markets for consumer

financial products and services work for Americans

• Has rulemaking, supervisory and enforcement authority

• Tasked with monitoring and responding to consumer complaints regarding consumer financial products or services

Consumer Financial Protection Bureau

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• How has HFMA and the industry responded?

Agenda

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• Coordinated HFMA & ACA Partnership

• Key Industry Stakeholders Involved

• Goal to Develop Best Practices / Guidelines

• Proactive Approach to give CFPB / Congressional leaders steps to improve process

Medical Debt Task Force

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• Various healthcare providers: profit, non- profit across the country

• Consumer advocacy and non profit healthcare association representatives

• Credit Bureau

• Debt Collection Agencies

• Early Out providers/Data scoring provider

• Representative from ACA International

• HFMA staff leading and organizing the process

The Approach: Cross functional teams representing all aspects of the cycle

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• Discuss the issues that exist today• Break into cross functional teams• Brainstorm an ideal world• Map out the process• Present back each teams’ diagram• Select the best processes from each• Develop one plan incorporating feedback from outside

sources (To Date Here is Where We Are In the Process)• Review and finalize with the team, respective associations• Publish for feedback• Address any roadblocks identified

Task Force: The Process

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• A high level outline of the process from the time of dropping a bill to resolution/write off to bad debt

• Incorporating the best practice in all the steps

• Keeping in mind the various laws not only in practice today but looking ahead in anticipation of future legislation

• Keeping the Patient experience as the number one priority

• Incorporating technologies, laws, best practices and expertise to identify any roadblocks that need to be addressed

Task Force: The Result

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Draft Post Discharge Account Resolution Process

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A Clean Bill Is Sent to Patient for Their Portion of the Financial

Responsibility for Services Rendered1, 2, 15, 16

Provider Account Resolution Efforts 1, 3, 11

(includes "Early Out") 3, 4, 5, 6, 7, 8, 10, 12

● Insurance Verification/COBRA Eligibility ● Eligibility for Public Programs ● Eligibility for Financial Assistance ● Bankruptcy Screen ● Data Scoring ● Presumptive Score Review ● Calls/Letters ● Installments 1.a.i

● Third Party Loans

Patient Does Not

Pay 1

Patient Pays

Patient Pays

Small Balance Resolution Options: ● Resolve the Account Internally (see Provider Acct Resolution Efforts)● Send to early out business associates● Write off account

Patient 's Account Is Screened for1.a.i :● Primary/Secondary Payer for Billing,● Accurate Payment Made/Posted from Primary Payer ● Discounts for Necessary Care Provided to the Uninsured ● Eligibility for Public Programs● Charity Care is Granted Based on Provider's Financial Assistance Policy Is Applied

Step for Exploration:“Full File” Provider

Reporting17

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Provider Options

Account Goes to Collection Agency 4, 9, 10,15

Patient Pays 12

Patient Does

Not Pay 1

Patient Pays 12

Closed and Returned to Provider 3

IF REPORTED:Remove Credit Bureau Report 7

Bad Debt Write Off 1, 3, 6, 11, 15

Collection Agency Efforts 9, 10

Depending on Provider Board Approved Policy Options May Include: Screening or Scrubbing : ● Insurance, Charity Care Eligibility, Bankruptcy Deceased ● Data Integrity, Propensity to Pay, Verify Assets

Continued Efforts to Resolve Account 1, 2, 3,9, 10

Optional Extraordinary Collection Activity: ● Report to Credit Bureau 6,7,13,14

● Legal Actions as Necessary: ·Wage Garnishment ·Liens

Debt May be Sold by Provider 1, 3, 4, 6,7, 9, 13, 14, 18

Stop All Collection Activities

Second Placement with Collections 1,3,4,6,7,9,13,14


Reporting17


Reporting17

Draft Post Discharge Account Resolution Process (cont.)

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Patient Does Not

Pay 1

Patient Pays

Patient Pays

Small Balance Resolution Options: ● Resolve the Account Internally (see

Provider Acct Resolution Efforts)● Send to early out business associates● Write off account



Reporting17

Draft Example: Shelia

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Provider Options


Patient Pays 12

Patient Does

Not Pay 1

Patient Pays 12





Depending on Provider Board Approved PolicyOptions May Include: Screening or Scrubbing : ● Insurance, Charity Care Eligibility, Bankruptcy Deceased ● Data Integrity, Propensity to Pay, Verify Assets



● Legal Actions as Necessary: · Wage Garnishment · Liens





Reporting17


Reporting17

Draft Example: Shelia

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Patient Does Not

Pay 1

Patient Pays

Patient Pays

Small Balance Resolution Options: ● Resolve the Account Internally (see Provider Acct Resolution Efforts)● Send to early out business associates● Write off account



Reporting17

Draft Example: Jeff

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Provider Options


Patient Pays 12

Patient Does

Not Pay 1

Patient Pays 12





Depending on Provider Board Approved Policy Options May Include: Screening or Scrubbing : ● Insurance, Charity Care Eligibility, Bankruptcy Deceased ● Data Integrity, Propensity to Pay, Verify Assets



● Legal Actions as Necessary: · Wage Garnishment · Liens





Reporting17


Reporting17

Draft Example: Jeff

• 1st bullet

• 2nd bullet

• 3rd bullet

Next Steps…

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Thank You!

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A Case for Patient Friendly Collections Tom Gavinski, Vice President, Healthcare Division I.C....

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