Hospitals, patients wrestle with uncompensated care

The million or so uninsured Illinoisans expected to enroll in President Barack Obama’s signature health care law could help hospitals statewide mitigate the escalating costs of caring for needy patients, health care experts said.

But in McHenry County, Centegra Health System has already intensified efforts to recoup some money for providing care for the uninsured or underinsured who either don’t have the ability to pay for their medical care or, in some instances, are unwillingly to pay for their care.

Centegra in recent years has increased collection efforts, financial counseling and assistance to better identify patients’ ability to pay and put them on affordable payment plans that can guarantee Centegra some compensation for services.

Those efforts will continue in the future, as Centegra has seen uncompensated care rise by $12.98 million since 2010, said Chris Westerkamp, Centegra’s vice president of revenue cycle. Centegra’s uncompensated care this year totaled $64.4 million.

“We’ve invoked more discussion, and we are getting more collaboration from the community, as we’ve educated them and offered more extensive payment plans,” Westerkamp said. “We are trying to be more creative on how we can partner with the patients in the community to take care of their financial piece of their health care.”

Uncompensated care costs for hospitals in Illinois and across the country has steadily risen since the economic recession in the late 2000s and as the number of uninsured patients increase.

Illinois hospitals alone tallied more than $1.5 billion in uncompensated care in 2012, according to figures from the Illinois Hospital Association. Hospitals throughout the United States racked up $41 billion in 2011, a near $2 billion increase from 2010, according to the latest figures from the American Hospital Association.

Unpaid hospitals bills also was the number one cause for bankruptcy filings this year, according to a summertime study from NerdWallet Health, a price comparison website that analyzed national health care data. Roughly two million Americans were estimated to file for bankruptcy because of unpaid medical bills.

Uncompensated care for hospitals generally falls between bad debt and charity care. Bad debt involves situations where the hospital may have expected payment for services, but never received it because of a patient’s unwillingness to pay or the hospital’s failure to identify the patient’s financial situation.

Charity care offers free or discounted care to those patients who financially cannot afford the care provided to them. Patients will work with the hospital on repaying services under charity care, even though the hospital never expected to receive payment because of the patients’ inability to pay.

At Centegra, the effort to try to recoup some of its uncompensated care costs has involved the group’s financial counselors more accurately identifying a patient’s financial situation to ensure they apply and receive charity care.

Officials so far have seen success, Westerkamp said. Bad debt accounted for 64 percent of Centegra’s uncompensated care costs in 2010 and through increased consultation, officials have decreased it this year to 46 percent.

Centegra will try to diminish that percentage further through increased collection and consultation efforts, Westerkamp said. The effort also will help Centegra maintain its profitability as a community health care provider.

“We want to remain a viable organization, and we need to make sure that we are collecting as much or all of the dollars that patients or insurance carriers have the ability to pay,” Westerkamp said.

Across Illinois, hospitals totaled roughly $900 million in bad debt and $600 million in charity care in 2012, said Danny Chun, a spokesperson for the Illinois Hospital Association.

Like Centegra, many hospitals are intensifying consultations and assistance programs to ensure that patients are receiving charity care, he said. Many patients included in those bad debt figures are eligible for charity care but may be reluctant to admit their inability to pay, Chun said.

The escalating trend in uncompensated care also will likely diminish, as uninsured patients start to enroll in the expanded Medicaid program and subsidized insurance exchange offered in the Affordable Care Act, Chun said.

The association expects 700,000 to 1 million of the 1.8 million uninsured Illinoisans to enroll and receive coverage from the landmark law. But the association doesn’t yet know the exact number, since the law’s online enrollment has been plagued by malfunctions.

“We don’t know how much and when,” Chun said. “Theoretically, though, more than half of the uninsured in Illinois will get coverage and that will decrease the cost of unreimbursed care.”