Mission Possible: A Financial Assistance Policy
By Dina Maas
Finance
As the number of uninsured and underinsured patients continues to increase in the United States, financial assistance policies in health care organizations are playing an increasingly important role in making sure patients receive the care they need with little or no financial burden. If these policies are going to work, however, all staff must be well-educated about them and patients must have easy access to both policy information and the application process.
Alegent Health, a not-for-profit health care system based in Omaha, Neb., operates nine acute care hospitals in Nebraska and southwestern Iowa. The system has created a financial assistance policy that ties in closely to its mission.
“The mission of Alegent Health is to further the healing ministry of Jesus Christ,” explains Scott Wooten, senior vice president and chief financial officer for the system. “We see all people as children of God and deserving of dignity and respect at all times, including when accessing health care. Our financial assistance policy is one way we live this belief, allowing individuals and families without the necessary resources to pay for their health care by receiving care at a lesser cost or no cost, depending on their circumstances.”
When first developing its financial assistance policy, Alegent Health wanted a design that worked directly with patients to find solutions. Tim Meier, chief financial officer at Alegent Health Bergan Mercy Medical Center in Omaha, was part of the team that designed the policy. He says, “We used a combination of what we felt were best practices across the nation and what we felt worked best for our patient population.”
For instance, when the policy was first revised in 2001, Alegent was using the federal poverty guidelines. However, Catholic Health Initiatives, which is a sponsor of Alegent Health, was using HUD geographic low-income guidelines, so Alegent decided to adopt that practice into its policy.
“We felt it was a better fit with our mission,” Meier says. “HUD Guidelines are not based on a ‘one-size-fits-all’ solution and [they] allow Alegent Health to get specific income levels for our service area. We also added a catastrophic clause, which is a unique aspect of our financial assistance policy.”
The catastrophic clause limits the amount of a patient’s bill to no more than 20 percent of his or her income. For example, a former patient at Alegent Health had an annual income of $150,000 and had good health care coverage. However, he needed some medically necessary services that were not covered by his particular health plan, and ended up with a bill of $100,000.
Therefore, the catastrophic clause went into effect and the patient was only responsible for $30,000 of the bill. The clause also allows Alegent Health to work with patients to set up a bank loan with an interest rate that fluctuates with the prime rate. While the catastrophic clause is not used often, it provides an important safety net for patients.
Beyond the catastrophic clause, patients qualify for the policy’s assistance for medically necessary procedures based on their income levels and HUD guidelines. The policy works on a graduated scale covering a 30 percent to 100 percent write-off. This scale is also based on family size, which means the more people there are in a family, the more income that family can make and still qualify for assistance.
An interactive application process can be found online, which is one of the more unusual aspects of the plan. Patients can complete the online form and immediately find out whether they qualify for financial assistance and, if so, at what percentage. The process is very similar to that of online mortgage calculators.
And, since Alegent Health must have proof of income before approving financial aid, the online process allows patients to upload scanned documents that provide proof of their income and savings.
Meier also stresses the importance of staff education about the policy at every level of the organization, in both hospitals and clinics. He says the policy will not accomplish its purpose unless everyone in the organization can talk knowledgeably about it.
Alegent Health has also spent a considerable amount of time ensuring that patients are well-informed about the policy, what it might mean for them and how to use it. Brochures and application forms are available at every point of registration, and the policy is built into the preregistration process.
Financial assistance information is also printed on billing statements and anyone calling Alegent Health for information will be able to speak immediately to a knowledgeable employee.
Setting up or revising a financial assistance policy can be a complex process and the board needs to understand it. “It is very important for the board of directors to get involved and stay involved,” Meier advises. “They need to continue to monitor the policy even after it is established to make sure it is meeting the changing needs of the patient population.”
Lawrence J. Beckman, Alegent Health’s board chair, says, “Our board is fully cognizant of the ever-growing population of uninsured and underinsured [people] in our communities. We feel it is essential that this population receive a discount similar to what we give contracted payers. Our financial assistance policy is an extension of our mission and a reflection of our commitment to promote community health.”
Through continued monitoring of its patient population, Alegent Health also realized that some patients who didn’t qualify for financial assistance did not have insurance coverage, so last May, the system added a self-pay discount clause to its existing policy.
Funding a financial assistance policy is yet another challenge. Alegent Health does not fund its financial assistance policy per se; rather, it is budgeted for in aggregate. Some states maintain funds to help hospitals fund their financial assistance policies, but neither Nebraska nor Iowa have such funds.
The biggest challenge the nation’s health care system faces is its cost. Alegent Health’s CEO, Wayne A. Sensor, says, “As we focus on the future of health care, we must not lose sight of the underserved in our communities, who need our help now. The proactive approach we take with our financial assistance policy is just one example of our commitment to assisting patients with high medical bills. No one who comes through our doors is denied access to the high-quality health care that they need—no matter their ability to pay.”
Dina Maas is coordinator of corporate communications for Alegent Health, Omaha, Neb. She can be reached at (402) 398-5653 or at dmaas@alegent.org.
This article 1st appeared in the December 2099 issue of Trustee Magazine.
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