Sue the Patient

Dan Munro

Posted 4/27/12 on Forbes

States often confer the tax-exempt status on hospitals with the expectation that certainly some services will be extended to the less fortunate with limited capacity to pay. Two of the more litigious hospitals in North Carolina are Carolinas HealthCare and Wilkes Regional Medical Center in North Wilkesboro. They each filed over 12,000 lawsuits against patients in the same five-year period. One of the controlling entities – Carolinas HealthCare System – reported annual profits of more than $300 million over the last three years. One facility, Carolinas Medical Center-Mercy (CMC-Mercy) promotes itself as a “Planetree Designated Patient-Centered Hospital.” Planetree, Inc (itself a non-profit) offers tiered designations (Bronze, Silver and Gold) for “achievement in patient-/person-centered care based on evidence and standards.” The designation appears to be loosely based on an “application review fee” ($2,500 – $5,000) and includes a “self-assessment.” CMC-Mercy’s Gold Designation status is prominently featured on the hospital’s website:

CMC-Mercy – Planetree Gold Designation

In another example of aggressive collections – this time reported by the New York Times – debt collectors are starting to appear earlier in the healthcare process – including bedside in the ER. One organization, publicly traded Accretive Health is “embedding collectors as employees in emergency rooms and demanding that patients pay before receiving treatment.” The aggressive tactics were revealed earlier this week by the State Attorney General for Minnesota who said that Federal laws may have been broken by Accretive Health employees who accessed protected health information as a part of their collection process. In some cases, the aggressive tactics by Accretive employees were rewarded with gift cards – while those that were less successful were threatened with termination. Publicly traded Accretive Health has contracts with hospitals around the country including Henry Ford Health Systems in Michigan and Intermountain Healthcare in Utah. According to the NYT article – “Accretive announced it won a contract to provide “revenue cycle operations” for Catholic Health East, which has hospitals in 11 states.”

Most hospitals have contracts with agencies for collecting payments after services are rendered, but by embedding collection agents directly into the administrative functions, companies like Accretive Health can incorporate the more aggressive approach of point-of-care payment – before healthcare services are even delivered. Patients are often unaware that the personnel are Accretive Health employees – under contract to the hospital. For services delivered through the ER this could be interpreted to violate the Emergency Medical Treatment and Active Labor Act, a federal law that requires hospitals to provide emergency health care regardless of citizenship, legal status or ability to pay.

As evidenced by this chart, according to the American Hospital Association, the financial strain of uncompensated care is mounting:

American Hospital Association – Uncompensated Care

Just last month The Office of the National Coordinator (under HHS) formed a Consumer/Patient Engagement Power Team which is designed to “assess and provide recommendations for strengthening consumer/patient engagement components.” Most of that effort appears to be designed around the technical components of Meaningful Use – and specifically the next step in that evolution – Stage 2. This is certainly an ideal time to review all aspects of consumer/patient engagement in the healthcare system – including how to approach patients for healthcare payment under tough economic conditions. As the New York Times reported late last year – there are about 100 million Americans either in poverty – or the zone just above it.

3 thoughts on “Sue the Patient

  1. Thanks for the post. I have a question about the uncompensated care numbers hospitals report. They seem to be at very inflated and fictional costs that are often 10 times the hospitals’ actual costs of uncompensated care. Am I wrong?

    1. Tom – not sure I can help with much detail because I pulled the figures directly from the American Hospital Association. Like AHIP (for payers) AHA is heavily weighted toward lobbying for the Hospital Industry. I don’t have reason to suspect that they’re purely fictional number – but you can bet they’re not using any discounted #’s. Individuals (without insurance) are not only charged rack-rate – it’s basically THE most expensive healthcare you’re likely to see (and who’s to argue it’s too high?). Point being – a very large % of uncompensated care (if not 100%) is being billed at the highest possible retail rate. We can’t really argue with the value there either since – at least in some cases – it’s truly life-saving. Better to be BK and alive versus solvent and … well … prematurely dead. Patients just don’t always realize the scope of the “fresh-start” the hospital is giving them at discharge. (sorry, probably too cynical with that last sentence).

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