Mnet Health News delivers the latest news and information articles for the world of healthcare.

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HFMA Releases Patient Financial Communications Best Practices

The Healthcare Financial Management Association (HFMA) recently released new guidelines for improving and standardizing how health care organizations communicate with patients about their financial responsibilities.

The Patient Financial Communications Best Practices are meant to bring consistency, clarity and transparency to the process, the association noted.  The best practices call for annual training for point-of-service staff—including patient access, financial counseling and consumer service—around patient financial communications.

The best practices also detail preferred patient financial communications in several settings—before service, in the emergency department and in other care settings.  The best practices were developed by the HFMA in conjunction with the American Hospital Association, America’s Health Insurance Plans, the American Academy of Family Physicians and the National Patient Advocate Foundation.

The complete best practices document is available on HFMA’s website, http://www.hfma.org.  The HFMA has also been working with ACA International on a separate set of best practices focused on medical debt collection.

CareCredit to Pay 34 Million Due to Claims Product Didn't Provide Details of Hidden High Interest Fees

The Capital division of General Electric has agreed to refund as much as $34.1 million dollars to bring a resolution to recent allegations of misleading consumers regarding terms for their CareCredit product offered by many medical facilities to pay for medical procedures and surgeries.

The settlement between CareCredit parent company GE and the Consumer Financial Protection Bureau is the first action to be taken by the CFPB involving medical credit cards. These cards are widely used by dentists and doctors throughout the country to pay for procedures that are not covered by insurance or to cover the self-pay portion of the patient's bill.

This settlement has come forth in tandem with a new initiative by the CFPB to scrutinize deferred interest financing that allows borrowers to refrain from paying interest for a set time period but would later adjust to extremely high rates. The CFPB has pointed out that this deferred interest plan could eventually result in much higher rates than their traditional credit card offerings.

The CFPB alleges that CareCredit signed borrowers to financing plans without the benefit of an explanation of the terms of the contract by the medical staff who facilitated the sale of the plan. They further alleged that many of the consumers who had signed up for the plan believed that they were not paying any interest at all, even though the reality was that they were paying as much as 27% interest at the end of the interest free cycle. 

Officials at the CFPB also have claimed that they have received numerous complaints about the product. To avoid paying fines, GE Capital was required to offer refunds to product consumers and to cooperate with the investigation of the CFPB. 1.2 million consumers must now be notified that they can file a reimbursement claim for fees and interest. In the future, CareCredit must contact new consumers directly within 72 hours of application of the product to fully explain the loan to them.

“Mnet Financial offers 'in service' training for clients and consultation to help them deal with the expected rise in out-of-pocket expenses being incurred by patients. Even though the reason for these expenses is often a high deductible insurance plan or the co-insurance portion of the patient's health plan; the patient often tends to vent their frustration with the medical provider and their billing process. We want the patients of our clients to be very well informed about our financial products” said Mnet Financial CEO David Hamilton.

The refund deal that GE's CareCredit has allowed the company to neither admit or deny CFPB allegations. A spokesperson for the company says that GE Capital has cooperated with the CFPB investigation and has pledged to provide more education to health care providers and their patients.

More Americans Select High-Deductible Health Plans

The percentage of Americans enrolled in a high-deductible health plan (HDHP) increased in the first quarter of 2013, according to recently released data from the National Center for Health Statistics (http://1.usa.gov/H8CtXV).

As of March, 32.5 percent of people under age 65 with private health insurance were enrolled in a HDHP, including nearly 11 percent who had a consumer-driven health plan (CDHP). The report defines a CDHP as a HDHP that is paired with a health savings account (HSA).

The percentage of Americans with a HDHP of any kind is up 1.4 percent from 2012 and up 13.3 percent from 2008. The percentage of Americans with a CDHP has also increased during both time frames. Employers have increased their high deductible offerings in recent years as well, and CDHPs could become the most common form of coverage offered by large and midsize employers in the next three to five years, according to a separate study (http://bit.ly/19YOY3b).

Though HDHPs and CDHPs are increasing in popularity, a growing number of consumers who choose high deductible plans are finding that they are unable to pay their medical bills, Kaiser Health News reported recently (http://bit.ly/19RK3ND).

Report: Insurance Exchanges Could Hurt Not-for-Profit Hospitals

The new health insurance exchanges that launched Oct. 1 as part of the Affordable Care Act could have a “modestly negative” financial effect on not-for-profit hospitals, according to a recent report from Moody’s (http://bit.ly/H8BUxs).

Risks to these hospitals include the shift of patients from commercial plans to exchange plans, which are likely to have lower reimbursement rates, and the uncertain terms and contracts between exchange plans and hospitals, as well as a growth in bad debt.

“The exchange-related risks center on two primary issues that will largely negate the benefits of a declining uninsured population in 2014. These issues are the level and composition of enrollment, and how insurance exchanges exacerbate revenue pressures on hospitals,” said Moody’s Associate Managing Director Lisa Goldstein.

Goldstein added, “Providers are reporting that negotiations with exchange plans range from Medicaid rates, usually the lowest rate-per-service a hospital receives and does not cover costs, to a discount off of commercial rates, typically the highest rate a hospital receives. Commercial rates subsidize losses incurred with Medicaid and Medicare and drive profitability for most hospitals.”

If exchange plans have lower reimbursement rates than commercial plans, it could reduce hospitals’ revenue growth in 2014. This analysis comes on top of an already murky economic outlook for hospitals. One recent report (http://bit.ly/1cPMjtm) indicated that expenses grew faster than revenues in 2012, while another report (http://bit.ly/1dc5Tm0) predicted future financial challenges as patient demand decreases and reimbursement cuts continue.

Premium Rate Increases Lowest in a Decade, But Expected to Spike in 2014

U.S. companies and their employees this year saw the lowest health care premium rate increases in more than a decade, according to a recent analysis from Aon Hewitt. After plan design changes and vendor negotiations, the average health care premium rate increase for large employers in 2013 was 3.3 percent, down from 4.9 percent in 2012 and 8.5 percent in 2011.

In 2014, however, average health care premium increases are projected to move back to the 6 percent to 7 percent range. The analysis showed that the average health care cost per employee was $10,471 in 2013, up from $10,131 in 2012. The portion of the total health care premium that employees were asked to contribute toward this premium cost was $2,303 in 2013, compared to $2,200 in 2012.

Meanwhile, average employee out-of-pocket costs, such as copayments, coinsurance and deductibles, increased 12.8 percent ($2,239) in 2013, compared to just 6.2 percent in 2012 ($1,984). In 2014, average health care costs are projected to increase to $11,176 per employee. Employees will be asked to contribute 22.4 percent of the total health care premium, which equates to $2,499.

Average employee out-of-pocket costs are expected to increase to $2,470. These projections mean that over the last decade, employees’ share of health care costs—including employee contributions and out-of-pocket costs—will have increased almost 150 percent from $2,011 in 2004 to $4,969 in 2014.

“There are many factors that contributed to the lower rate of premium increases we saw over the past two years that we don’t expect to continue in the long-term,” said Tim Nimmer, chief health care actuary at Aon Hewitt.“These include the lagged effect from the economic recession on health care spending, and continued adjustments as employers and insurers phase out the conservatism that was reflected in earlier premiums due to uncertainty around economic conditions and health care reform.”

Health Plans with Higher Deductibles Increase Necessity of Patient Financial Services

Obamacare is currently receiving a hefty amount of criticism throughout the country, with much of the melee surrounding the release of the new health care exchange and the technological issues that continue to arise from it.But even though the roll-out of the health care law has been anything but seamless, hospitals and surgery centers in the U.S. are finding they are faced with the reality that lower-cost insurance coverage with higher deductibles is likely to be the coverage of choice for a large cross-section of the country in the very near future.

A recent study implies that of those who are insured, one in five are likely to have problems paying their medical bills. But those percentages are expected to increase as more employees also turn to high deductible plans because many employers have shifted more health care insurance costs onto their employees. This shift is likely to result in employees choosing plans with higher deductibles to reduce their monthly expenses. 

Knowing what current studies now suggest, revenue cycle professionals should expect that about 20 percent of their patients will experience issues in paying for their medical bills. Maintaining a financially healthy hospital or medical practice will logically rely on the expertise of the medical center’s collection department or collection vendor and their effectiveness at collecting patient revenue in a timely manner.

To continue to remain financially sound, a medical center should strive to be as proactive as possible by reaching out to the patient shortly after treatment. Additionally, a provider should also choose solutions that allow them to screen patients regarding their ability to pay for services.

Patient predictive payment tools are not designed to be used to prevent patients with lower scores from gaining access to health care. However, by estimating the patient’s likelihood of paying their bill, the facility is better equipped to direct the patient toward mutually beneficial payment options.

“An array of payment options for the patient to choose from is extremely important for the financial health of a provider,” said Mnet Financial CEO David Hamilton. “Fortunately, the reality is that most patients have the ability to pay something toward their services, so it’s likely that we will have a viable solution to get the patient’s medical debt resolved,” said Hamilton.

Credit based health care financing, payment plan management systems, and call center accessibility are all important tools available to the health care provider of today. “At Mnet Financial, our MedDraft payment plan system secures a payment contract with the patient prior to service so the bill gets paid,” said Hamilton. “And if the patient defaults on their pay plan contract, the account is then forwarded to Mnet’s collection department to help get the patient back on track,” Hamilton said.

While it appears certain that the high cost of health insurance as well as new health care legislation will eventually cause self-pay portions of patient’s medical bills to rise, many options are still available to health care providers. By making proper use of the tools made available by a reputable financial services and collection vendor, providers can continue to thrive.

Private Health Insurance Coverage Decreased Nearly 4 Percent During Downturn

Most states saw private health insurance coverage decrease during the economic downturn between 2008 and 2010; then stabilize between 2010 and 2012, according to a recent Census Bureau report (http://1.usa.gov/15mc3bv).

Between 2008 and 2010, 45 states and Washington, D.C., had decreases in the percentage of residents under the age of 65 who had private insurance. In 32 of these 45 states, the loss of private insurance outpaced the gains in public coverage (which includes Medicaid and other medical assistance programs), resulting in an increase in the uninsured rate.

Nationwide, the percentage of Americans under the age of 65 who had private insurance decreased from 66.1 percent in 2008 to 62.5 percent in 2010. “In periods of economic downturn, the ability of individuals to access and afford private health insurance becomes more limited,” the report noted.

Between 2010 and 2012, the percentage of Americans with private insurance decreased by only 0.4 points as the economy began to improve. Most states (32) and D.C. did not have a statistically significant change in the percentage of residents who had private insurance.

Of these 32 states and D.C., 17 had increases in the public insurance rate, which in most cases caused a reduction in the uninsured rate. Nationwide, the uninsured rate increased by 1.2 percent between 2008 and 2010; then decreased by 0.8 percent between 2010 and 2012.

Between 2011 and 2012, the total number of Americans who had health insurance of any kind increased from 260.2 million to 263.2 million, according to a separate Census Bureau report released in September.

Study: Many Hospitals Slow to Prepare for Coverage Expansion

Most health systems have been slow in preparing for implementation of the new health insurance exchanges, and the newly eligible pose an enrollment challenge, according to a recent study. The study, “Health Exchanges: Open for Business,” released in September by PwC’s Health Research Institute, included feedback from more than 150 hospitals across 25 states, as well as national hospital associations and patient advocacy groups.

It found that few hospitals have developed comprehensive strategies to identify, educate and help enroll people in health plans sold through the new exchanges that opened to consumers last month as part of the Affordable Care Act. Coverage under these plans begins as early as Jan. 1, 2014.

Other key findings of the study include:

• Many providers have been slow to promote the expanded coverage options. Health systems attribute delays in their enrollment efforts to multiple factors, including: “Reform fatigue;” the need to finalize contracts with insurers; the slow trickle of information from regulators; and the desire for additional regulatory guidance, especially in the area of outreach designations and certification requirements.

• The newly eligible pose an enrollment challenge. If individuals do not understand which plan best fits their needs, it could impact the health of the patient as well as the revenue and reputation of the hospital. Many Americans do not fully understand the basics of health coverage, and exchanges will add another layer of complexity as 86 percent of individuals who purchase a health plan on the exchange will receive some government subsidy.

• Narrow networks could leave some hospitals out. Some health plans include only select hospitals and physician groups in their exchange offerings in an effort to hold down costs. This enables health plans to offer lower premiums, but also may lead to higher out-of-pocket expenses.

The full study is available at http://bit.ly/15Pwh0L.

3 Million More Americans Get Health Insurance in 2012, Census Bureau Finds

The number and percentage of Americans with health insurance increased in 2012, according to U.S. Census Bureau data released recently. The Census Bureau reported the following:

• The number of people with health insurance increased to 263.2 million in 2012 from 260.2 million in 2011, as did the percentage of people with health insurance (84.6 percent in 2012, 84.3 percent in 2011).

• The percentage of people covered by private health insurance in 2012 was not statistically different from 2011, at 63.9 percent. This was the second consecutive year that the percentage of people covered by private health insurance coverage was not statistically different from the previous year’s estimate. The percentage covered by employment based health insurance in 2012 was not statistically different from 2011, at 54.9 percent.

• The percentage of people covered by government health insurance increased to 32.6 percent in 2012, from 32.2 percent. The percentage covered by Medicaid in 2012 was not statistically different from 2011, at 16.4 percent. The percentage covered by Medicare rose over the period, from 15.2 percent in 2011 to 15.7 percent in 2012. Since 2009, Medicaid has covered more people than Medicare (50.9 million compared with 48.9 million in 2012).

• The percentage of children younger than 18 without health insurance declined to 8.9 percent (6.6 million) in 2012 from 9.4 percent (7.0 million) in 2011. The uninsured rates did not show a statistical change for all other age groups: 19 to 25, 26 to 34, 35 to 44, 45 to 64, and people 65 and older.

• The uninsured rate for children in poverty (12.9 percent) was higher than the rate for children not in poverty (7.7 percent).

• In 2012, the uninsured rates decreased as household income increased, from 24.9 percent for those in households with annual income less than $25,000 to 7.9 percent in households with income of $75,000 or more.

The full Census Bureau report is available at http://1.usa.gov/14zSZZR.

Report: Coverage Expansion to Spur Health Spending Growth in 2014

Health care prices have been growing slowly this year, but the growth rate is expected to increase in 2014 with the full implementation of the Affordable Care Act. Expected growth for 2014 is 6.1 percent, according to a report (http://bit.ly/18PnRZK) from the Centers for Medicare and Medicaid Services published in the September issue of the journal Health Affairs. That rate is about 2 percentage points higher than the projected growth rate for this year.

Much of next year’s projected increase will be due to major coverage expansions through the Affordable Care Act, the report noted. Over the long term, the growth rate is expected to be sustained more by the improving economy and an aging population requiring more care, with the health care law being less of a factor.

Between 2012 and 2022, national health spending is projected to grow at an average annual rate of 5.8 percent. During that same time, the Affordable Care Act is expected to only add about 0.1 percent to average annual health spending growth.

Another recent report also projected that the current lull in health care spending is unlikely to last. The report (http://bit.ly/19xmHx5), released in September by the Brookings Institute, found that health care sector spending is expected to continue to grow 1.2 percent above real GDP growth in coming decades.

That’s a slower rate than the recent average of 2.4 percent growth, but even exceeding GDP growth by 1.2 percent means that the health care sector will be close to 25 percent of GDP in 20 years. This means the health care cost curve is unlikely to “bend” dramatically in the near future, according to the report.

Employer Cost for Health Insurance Expected to Increase at Smallest Rate in 5 Years

The cost employers pay to provide health insurance to employees is expected to increase next year, but at the smallest rate in five years, the Wall Street Journal reported recently (http://on.wsj.com/1bScOgT). Companies that provide benefits expect to pay 5.2 percent more for each employee in 2014, according to the 2013 Health Care Changes Ahead Survey (http://bit.ly/1d4XJf5), which was released on Aug. 21 by professional services company Towers Watson.

That’s less than the 5.9 percent increase businesses expect this year, the WSJ noted. It would also be the smallest increase in five years. A recent survey from the Kaiser Family Foundation (http://bit. ly/18HKYSH) showed that premium costs for employees are also expected to increase at a lower-than-average rate next year.

Nearly all companies (98 percent) expect to maintain coverage for their employees in the next two years, but many will look at private exchanges as a potential option, the Towers Watson survey found. This would allow them to maintain their roles as plan sponsors, but outsource certain aspects of plan management to exchange operators.

Private exchanges are expected to become more popular in coming years as insurers look to offer businesses something similar to the public exchanges opening up to individuals in October under the Affordable Care Act.

Study: Employer Mandate Delay Will Have Little Impact on Coverage, Revenue

A one-year delay of the employer mandate provision of the Affordable Care Act will have little effect on coverage and revenue, according to a new study from RAND Corporation. Only 300,000 fewer people, or 0.2 percent of the population, will have access to employer-sponsored insurance in 2014 because of the delay, the study found. And only about 1,000 fewer businesses will offer coverage.

That’s in part because less than 5 percent of businesses have 50 or more employees, which is the point at which the employer mandate kicks in (smaller businesses are exempt). Of these larger businesses, 95 percent already offer health insurance to employees, according to the study.

The study also found that the financial impact of the delay does not figure to be overly significant. Estimates show that the federal government will miss out on about $11 billion in revenue, which is far less than the total revenue the law is expected to generate. However, if the employer mandate was repealed completely, revenue would fall by $149 billion over the next 10 years because of lost penalties—about 10 percent of the total spending offsets being used to support the law.

“Our simulations show the one-year delay of the large-employer mandate will not have a substantial impact on either enrollment in health insurance or financial support for the Affordable Care Act,” said Carter Price, the study’s lead author and a mathematician at RAND, a nonprofit research organization. “However, eliminating the large-employer mandate would have a significant impact on financial support for many provisions of the Affordable Care Act.”

The Obama administration announced the delay in early July. Originally, the law required that employers with 50 or more full-time workers provide health insurance by the start of 2014, or pay penalties. Now, these businesses have until 2015 to comply.

The full study is available at http://bit.ly/16shiv7.

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