The challenge posed to hospitals by patient balances after insurance (PBAI) has continued to grow, according to a new TransUnion Healthcare analysis. The analysis revealed that PBAI rose from 8.0% of the total bill responsibility in Q1 2012 to 12.2% in Q1 2017. Specifically, commercially insured patients experienced a PBAI increase of 67% from $467 to $781.
This trend led to an 88% increase in total hospital revenue attributed to PBAI over the 5-year period. The analysis was released at the 2018 Healthcare Financial Management Association’s (HFMA) Annual conference in Las Vegas.
As costs continue to rise for patients, uncompensated care—a combination of bad debt and charity care—is also rising. According to the American Hospital Association’s 2017 Hospital Fact Sheet, uncompensated care increased by $2.6 billion dollars in 2016, the first increase in three years. The continued trend of increased PBAI has amplified bad debt exposure to providers, thus significantly contributing to the rise in uncompensated care.
Turning to Medicare, according to data from the Healthcare Cost Reporting Information System (HCRIS), the analysis indicated that Medicare Bad Debt, which is the result of Medicare patients not paying their deductibles and co-insurance, increased from $3.14B in 2012 to $3.69B in 2016, a 17% increase. The trend indicates that hospitals continue to experience reimbursement pressure that can be tied directly to the increase in patient responsibility.
Healthcare Payment Specialists (HPS), which was recently acquired by TransUnion, helps healthcare providers maximize Medicare reimbursement by focusing on payment areas where superior technology and deep domain expertise can drive significant improvements, including:
- Medicare Bad Debt (MBD): Automates the MBD review process to help hospitals accurately and efficiently identify bad debts that are reimbursable
- Medicare Disproportionate Share (DSH): Helps hospitals serving low-income populations maximize their DSH reimbursement by integrating multiple data sources to identify DSH-eligible patients and patient days
HPS also has complementary solutions to TransUnion Healthcare in the areas of Transfer Diagnosis-Related Groups (DRG) and Indirect Medical Education/Shadow Billing.
Wiik will be signing copies of his book at HFMA Annual on Tuesday, June 26th at 11 a.m. PT at the HPS booth #1022.