New billing and collections guidelines encourage focus on racial equity

Healthcare providers are bing pushed to consider whether they’re suing people of color at disproportionately high rates, thanks to newly updated guidance on billing and collection practices.

The report, published jointly by the Healthcare Financial Management Association and ACA International, a trade group for collection agencies, updates guidelines from 2014. It recommends hospital administrators to report to their boards the rate at which they use extraordinary collection activities like lawsuits or credit reporting, and to incorporate data on patients’ race and ethnicity.

COVID-19 has disproportionately affected communities of color, and the pandemic has brought to the forefront the manner in which institutional racism perpetuates health inequities.

“That’s really important, especially with looking at structural racism and how much that affects policies and practices in healthcare and far beyond,” said Mark Rukavina, director of Community Catalyst’s Community Benefit & Economic Stability Project and a member of the task force that compiled the new guidelines. “I think that’s an important addition to these practices.”

Another big change in the new guidance is an emphasis on educating patients ahead of time. The old rules limited their scope to post-discharge, whereas the new ones emphasize having financial discussions before patients receive services and at the time of service, including providing price estimates and plain-language explanations of billing processes.

The COVID-19 pandemic didn’t prompt the guidance, but the timing is “fortuitous,” said Rick Gundling, HFMA’s senior vice president. With more patients uninsured due to job losses and others on the hook for high deductibles, hospitals will increasingly face questions about proper collection practices.

“I think it does touch more patients now than it used to,” he said. “That’s why we updated to make sure we’re listening to consumers and their issues.”

The guidance says discussions that happen before patients receive services should use the most appropriate means for patients, including outbound contact to patients before the appointment, inbound contact from patients asking about the service or when the appointment is made.

The report suggests providers have their communications staff or patient advisory councils review written communication such as financial assistance policies or explanations of their billing processes to eliminate industry jargon or other confusing language.

If the billing discussion happens at the time of service, the report recommends providers do that during registration or discharge in private locations that don’t disrupt patient flow.

For emergency department services, the report said financial discussions can occur during the medical encounter as long as it does not interfere with patient care and the patient consents to these discussions in order to expedite discharge.

“No patient financial discussions will occur before the patient is medically screened and stabilized,” the report said.

The guidance also contains a checklist of steps providers should take before reporting patients to credit agencies, selling the debt to third-party collectors or filing lawsuits over unpaid bills. For example, before taking any such actions, the report recommends providers screen patients for primary and secondary coverage, make sure their contact information is correct, make sure the provider attempted to provide information on financial assistance and verified their bankruptcy status.

The guidance also says all providers should ensure they’re compliant with a set of regulations the Affordable Care Act added to the Internal Revenue Service Code, even though only not-for-profit hospitals are required to follow them. The rules require, among other things, that providers to communicate their financial assistance policies both verbally and in writing. Notices must also be posted prominently in their facilities.

Froedtert & the Medical College of Wisconsin garnered negative press in April for suing almost four dozen patients in a matter of weeks at the height of the pandemic. The Milwaukee-based not-for-profit system has since made a big change: It will no longer sue patients, even after the pandemic ends. That meant dismissing all outstanding lawsuits.

“We’re not going to take it to that level ever again,” said Jon Neikirk, Froedtert’s executive director of revenue cycle.

Neikirk, a member of the task force that compiled the new guidance, said Froedtert undertook a cost-benefit analysis and determined the amount of money the system collected from legal actions wasn’t worth the negative perception the lawsuits generated.

“It wasn’t necessarily hard dollars, but certainly I think just the common sense test told us that it’s just not worth it,” he said.

Patients are often surprised by what they owe after medical procedures, so Neikirk said he’s glad the new guidelines emphasize educating patients before they receive services. Froedtert has the software to provide estimates and he thinks sending them early will be helpful.

The new guidance also includes sample financial assistance polices providers can use during public health emergencies like the COVID-19 pandemic. The language allows providers to add their own “additional presumptive Financial Assistance category” for patients impacted by the emergency.

Rukavina said he thinks that was a good addition to the report because it ensures flexibility around policies when something extraordinary like COVID-19 happens.

Community Catalyst has been reviewing providers’ billing practices during the pandemic, and so far has not seen widespread problems with exorbitant bills or lawsuits to date, Rukavina said.

“That’s not to say they won’t come somewhere down the road because the adjudication process can be lengthy, so it can take time for these problems to emerge,” he said.


Tags: covid-19, pandemic

Thanks! You've already liked this