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CMS and Insurance Providers Issue New Quality Measures

The Centers for Medicare & Medicaid Services and America’s Health Insurance Plans recently released new clinical quality measures to streamline what healthcare providers have to report to insurers and keep patient care at the forefront of their work. CMS and AHIP are part of a Core Quality Measures Collaborative of healthcare system participants that released the measures. 

“These measures support multi-payer alignment, for the first time, on core measures primarily for physician quality programs,” according to a news release from CMS. “This release is the first from the collaborative, which plans to add more measure sets and update the current measure sets over time. CMS and the partner organizations believe that by reducing the complexity for providers and focusing quality improvement on key areas across payers, quality of care can be improved for patients more effectively and efficiently.” 

Currently, physicians and other clinicians must report multiple quality measures to different entities. Measure requirements are often not aligned among payers, which has resulted in confusion and complexity for reporting providers. “This agreement … will reduce unnecessary burden for physicians and accelerate the country’s movement to better quality,” said CMS Acting Administrator Andy Slavitt. The guiding principles used to create the core measures include that they be “meaningful to patients, consumers, and physicians, while reducing variability in measure selection, collection burden, and cost.” 

The goal is to establish broadly agreed upon core measure sets that could be harmonized across both commercial and government payers. Implementation of the measures will occur in several stages. CMS is already using measures from the each of the core sets but there will be a notice and public comment rulemaking process to implement new core measures in Medicare and remove those that are redundant and not part of the core group, according to the news release. 

The collaborative will continue to meet to monitor progress, encourage more participation, and add additional measures. “Members of the collaborative have taken a leadership role in identifying measures that will drive quality improvement and outcomes for patients,” said Carmella Bocchino, executive vice president, America’s Health Insurance Plans in the news release. “This is a first step of an ongoing process to ensure both public programs and the private sector align measures and reporting especially as we advance alternative payment models.” 

More information: 


Burden of Medical Bills Affects Insured and Uninsured

Consumers with health insurance report they are having problems paying medical bills, and the problem is even worse for consumers who are uninsured, according to a survey by the Kaiser Family Foundation and The New York Times. Both groups say their medical bills impact their families and financial situations overall through spending less on basic household items and increasing credit card debt, according to the survey on the burden of medical debt released in January. 

The Kaiser Family Foundation and The New York Times surveyed 2,575 adults ages 18-64 between Aug. 28 and Sept. 28, 2015. In that survey, 1,204 consumers reported problems paying medical bills while 1,371 did not. Among respondents with health insurance, 20 percent reported problems paying medical bills in the past year before they took the survey that often cause significant financial challenges and changes in employment and lifestyle, according to the Kaiser Family Foundation. 

“As expected, the situation is even worse among people who are uninsured: half (53 percent face problems with medical bills, bringing the overall total to 26 percent,” according to the news release. “Among those facing problems with medical bills, almost identical shares of the insured (44 percent) and insured (45 percent) say the bills had a major impact on their families.”

Sixty-six percent of respondents reporting problems paying medical bills said they were the result of a one-time or short-term healthcare expense such as a hospital stay or an accident, according to the survey. Thirty-three percent said the bills amount from medical treatments that have built up over time. According to the survey, insurance may initially guard people from having problems with healthcare bills but once those problems occur the impact is similar regardless of people’s insurance status. 

“While insurance provides financial protection, that protection can be incomplete for a number of reasons, including rising deductibles and other forms of cost-sharing, out-of-network charges, the growing complexity of insurance that can leave consumers with unexpected bills, and the fact that many people have only modest financial assets to cover medical expenses,” according to the foundation. 

“In fact, people who have problems paying medical bills despite having health insurance are more likely than the uninsured with medical bill problems to say they’ve put off vacations or major household purchases (77 percent versus 64 percent), respectively,” according to the survey. More people without insurance (41 percent) said they have problems getting the medical care they need as a result of medical bill problems compared to 26 percent of insured consumers, the results show. 

High deductibles and co-payments under some employer and Affordable Care Act health insurance plans have contributed to higher out-of-pocket costs at times for consumers, according to The New York Times article on the survey. “We’re at a point where there’s been slow growth in healthcare costs and huge improvements in the numbers of people who have health insurance,” Sara Collins, a vice president at the Commonwealth Fund, a health research group said in the article. “But there is this underlying trend towards higher cost sharing that could put increasing numbers of people at risk for being underinsured.”



Report: One in Four Americans Has More Medical Debt Than Emergency Savings

Twenty-five percent of Americans say they currently have more medical debt than emergency savings, according to a Health Insurance Pulse report from  Data from the report reflects that people who do not currently have medical debt are concerned about it. More than half of Americans (55 percent) are worried they will find themselves overwhelmed by medical debt, according to the report. Twenty-seven percent are very worried about medical debt and 28 percent are somewhat worried.  

“These results show that more than half the population feels financially insecure when it comes to healthcare,” said Doug Whiteman, a insurance analyst.  Adding to the negative sentiment, the majority of Americans (55 percent) are worried they will not have affordable health insurance in the future (versus 43 percent who were either not too worried or not worried at all).

According to the report, people in their prime earning years, between the ages of 30 and 64, worry the most about medical debt and healthcare.  Eighty percent of people earning $75,000 a year or more have more emergency savings than medical debt, while just 6 percent of these high earners say their medical debt is greater. Forty four percent of those making less than $30,000 a year say they have more medical debt than emergency savings, while 30 percent in the lowest-income group say their greater amount is emergency savings.

Medical debt remains most of what is collected in the credit and collection industry, according to surveys by ACA.

International and Ernst and Young in 2010 and 2013. Healthcare-related debt accounted for nearly 38 percent of all debt collected in 2013 and 52 percent of all debt collected in 2010.  More information:  or



Healthcare Debt Leads Collection Efforts, ACA/Ernst & Young Survey Finds

Healthcare debt continues to be the leading category of debt collection, according to a new ACA International/Ernst & Young study, “The Impact of Third-Party Debt Collection on the National and State Economies.”  Based on data from 2013, the survey provides a snapshot of national and state-level collection efforts. ACA had commissioned a similar study, released in February 2012, using data from 2010.

The third-party debt collection industry employs thousands of people as collection professionals. They collect on past-due accounts referred to them by various credit grantors, such as credit card issuers, banks, retail stores, hospitals and other healthcare services, or by federal, state and local governments.  While many associate consumer debt with typical consumer loans such as those for mortgages, cars and credit cards, survey respondents reported that the majority of debt collected was healthcare related debt.

The ACA/Ernst & Young study, released in July 2014, shows that healthcare-related debt (from hospitals, physician groups and clinics) accounted for nearly 38 percent of all debt collected in the industry. Approximately 27 percent of the total healthcare debt collected was from hospitals, while physician groups have 7.1 percent and clinics have 4.2 percent.

However, the percentage of healthcare debt relative to total debt collected declined in 2013 compared to 2010. Healthcare-related debt was 52.2 percent of the total debt collected in2010, followed by credit card/financial debt at 20 percent, according to the survey released in February 2012.  Tom Gavinski, vice president of healthcare at I.C. System Inc. in St. Paul, Minn., attributes the change in the healthcare collection rate found in the survey to the fact that the amount of credit card debt was growing at the same time healthcare debt was on the rise in 2013.

According to the survey, credit card/financial debt was 12.9 percent of debt collected in 2013.  “The healthcare market is really growing,” Gavinski said. “It has to do with more so the financial services retail market. Coming out of the recession, people cut back on their spending.  Credit card debt plummeted in 2010.  Healthcare debt is continuing to grow, but it hasn’t grown as much as credit card debt between 2010 and 2014.”

According to the Consumer Financial Protection Bureau, debt from revolving credit products (primarily credit cards) grew from $843 billion to $857 billion from the end of 2011 to May 2013.  Gavinski, whose agency collects both healthcare and credit card debt, said he wouldn’t have expected the decline in the healthcare collections rate shown in the survey.  “We’re continuing to market very extensively in healthcare because we still see it as a growing market, but also we continue to focus on credit card debt,” he said.

Early-Out and Bad Debt

Overall, the data in the most recent survey shows that the health of national and state economies in the U.S. continues to rely on the recovery of rightfully owed consumer debt. However, the data also shows that only a small percentage of outstanding consumer debt was actually recovered in 2013.  Third-party debt collectors received approximately 1 billion consumer accounts from creditor clients in 2013, with a face value of $756 billion.

However, only 7 percent ($55.2 billion) was actually recovered.  A majority (71 percent) of the total debt collected in 2013 was bad debt, which consists of receivables aged 90 days or more. This debt has typically been written off by the creditor as uncollectible and is then turned over to third-party agencies for collection. Early-out debt, representing 29 percent of all debt collected, consists of receivables aged 90 days or less. It typically allows the consumer a chance out of the collection process by resolving a delinquent debt before it goes into default or gets written off.

The latest Hospital Accounts Receivable Analysis (HARA) survey, based on data from the first quarter of 2014, finds that U.S. hospitals continue to improve uncollectibles’ performance by reducing write-offs, which includes gross dollars of bad debt and charity care divided by the total year-to-date gross revenue.  The benchmark goal is to limit charity and bad-debt write-offs to a combined 5 percent or less of total gross revenue. U.S. hospitals edged closer to the goal in the first quarter by reducing charity and bad debt write-offs to 5.09 percent of total first quarter gross revenue.

According to the HARA survey, U.S. hospitals are well poised to achieve the uncollectibles benchmark in 2014. Gavinski believes the majority of healthcare debt is bad debt, but there are also self-pay accounts handled by collection agencies.

According to the HARA survey, self-pay is defined as “individuals, institutions, or corporations assuming the entire responsibility for payment of hospital and medical bills that otherwise might be covered by an insurance policy.” Gavinski said, “Healthcare collections [companies] like us are going to see more and more hospitals outsource their selfpay because the volumes are increasing and they don’t have the capacity to handle it.” 

He noted that self-pay debt requires a different collection approach that is more patient-friendly.  “Self-pay will be much easier to collect because it is aged less,” Gavinski said.  “The accounts aren’t quite as old as the bad debt.” More information:


New Credit Scoring Model Reduces Impact of Medical Collections

FICO has refined its credit scoring model to include a more nuanced way to assess consumer collection information, bypass paid collection agency accounts and offer options to differentiate medical from nonmedical collection agency accounts.  In May, the Consumer Financial Protection Bureau released a white paper, “Data Point: Medical Debt and Credit Scores,” to evaluate if medical and nonmedical collections are equally predictive of consumers’ credit performance.

“The answer appears to be no,” the CFPB stated. “Our results suggest that consumers with more medical than nonmedical collections had observed delinquency rates that were comparable to those of consumers with credit scores about 10 points higher.”  In its white paper, the CFPB found that credit scoring models have not been weighing medical debt very well. It found that if the credit scoring models accounted differently for medical debt in collection and medical debt that is repaid by the borrower, the models could be more precise.

According to the CFPB, “The use of medical collections in credit scoring models has generated concerns stemming from the unique circumstances under which these debts arise and come to be reported to the [nationwide credit reporting agencies]. Among their unique characteristics is that consumers may sometimes be unaware that the medical collections exist.”  ACA International has supported efforts to reform credit reporting for medical debt, and is working to be at the table to discuss how this should work in the future.

ACA also participated in a Medical Debt Collection Task Force involving the Healthcare Financial Management Association best practices to help make paying medical bills an easier and fairer proposition for consumers.  According to an August 2014 article in Healthcare Financial Management by Chad Mulvany, the director of healthcare finance policy, strategy and development at the HFMA’s office in Washington, D.C., the CFPB has also alleged that some collection agencies report a patient’s debt to a credit bureau without issuing a statement as a way to reduce collection costs.

Mulvany said that if this practice does exist, it does not agree with the best practices developed by the HFMA and

ACA.  “HFMA’s Medical Debt Task Force found that notifying the patient in advance of reporting an account to a credit bureau is a widely adopted best practice,” Mulvany said in the article.  The best practices also include establishing policies for account resolution, ensuring those policies are followed and reporting back to credit bureaus when an account is resolved.

As the CFPB develops rules for the debt collection industry, questions about including medical debt in the process remain unanswered.  According Mulvany’s article, the CFPB’s May report is the first glimpse of its efforts to understand how medical debt impacts consumers’ access to credit.  “Although broader action will likely have only an indirect impact on providers, the report is worth noting because its findings identify potential areas of opportunity for revenue cycle improvement,” Mulvany said.  More information: and

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