The weakness of the U.S. economy is giving rise to an issue that hospital executives may not have paid much attention to before – qualifying indigent patients for Medicare, Medicaid or Social Security Disability.

While the proliferation of uninsured patients has been a mounting concern in recent years, the length and severity of this recession is raising awareness about this problem.

Atlanta-based healthcare services provider Chamberlin Edmonds reports that for every percentage point unemployment rates rise, the number of uninsured Americans increases by 1.1 million. The firm contends that hospitals are feeling the strain as they encounter more uninsured patients seeking care.

“The economy is driving it – the uninsured, the need for coverage and the impact on the hospital treating them,” said Chamberlin Edmonds Vice President Mary Tackbary. “Hospitals need to qualify these patients for eligibility and if they don’t do a good job, they lose money.”

There are a number of economically distressed patients who might qualify for Medicaid, Medicare or Social Security Disability benefits, Tackbary said. The dire financial climate, she indicated, has put a much heavier emphasis on the necessity for eligibility services as forward-thinking providers start to realize the importance of establishing metrics to track, measure and improve on patient eligibility assistance.

“If you’ve got 10,000 uninsured patients a year coming into the hospital and you don’t do a good job of getting them into these programs, you can’t stay in business,” said Tackbary. “Every hospital (understands) they need an eligibility program because it can mean millions.”

Yet for all its importance, few hospitals dedicate resources to eligibility qualifying. As more hospitals farm out administrative services to private contractors, she said patient eligibility qualifying and conversion is still a largely overlooked function despite potentially substantial benefits.

“As the number of uninsured goes up, so does the amount of bad debt for hospitals,” Tackbary said. “We offer this service because hospitals are not trained to handle it. There are no standardized metrics to determine their best practices or internal methods to gauge performance from year to year. ... If they can convert 30 percent of uninsured patients and generate more cash, that’s something.”

Mending the ‘safety net’
Financial managers at major provider organizations in Illinois and Florida both report enhanced performance since they outsourced the eligibility function to Chamberlin Edmonds seven years ago.

Keith Eggert, vice president of revenue management for Orlando (Fla.) Health, says his organization recognized the importance of eligibility qualifying a long time ago and that outsourcing has helped maximize its effectiveness.

“We’ve been dealing with eligibility as a business process for 20 years,” he said. “The growth among the uninsured and indigent became so voluminous that we had to turn it over to Chamberlin Edmonds. Things aren’t easing up with the economic downturn.”

Eggert said the main problem with uninsured patients – especially those who could qualify for federal, state or local assistance – is not that they represent revenue leaks for the hospital, but rather their precarious position in the societal safety net.

“We are patient advocates first,” he said. “We need to get paid for the services we provide, but patients need professionals to help them get through the eligibility process.”

Rush University Medical Center in Chicago acknowledged the same situation among its patient base and took the same steps with Chamberlin Edmonds, said Chuck Behl, vice president of revenue cycle at Rush.

“Many of our patients have chronic illnesses, so we need to get them Medicaid coverage in order to come back to Rush in the future for the care they need,” he said.

“All the forms and documentation required to secure Medicaid can be daunting,” he added. “It is a challenge for the average person. Being able to outsource and rely on Chamberlin Edmonds’ expertise helps us focus on other aspects of our business.”

Benchmarking eligibility
Chamberlin Edmonds is conducting a benchmarking project for its hospital clients, gathering feedback through a “customer council” comprised of about 40 to 50 hospital clients and a task force organized to set measurement standards.

“There is overwhelming interest and support for benchmarking among council members,” Tackbary said. “Industry best practices are starting to emerge, but there needs to be comparison with others.”
For hospitals to measure their performance against their peers, there needs to be a standard set of definitions, which is the task force’s main assignment. Tackbary says the variations that exist need to be made uniform.