Patient Balances After Insurance Continue to Increase in 2018, Driving Bad Debt and Uncompensated Care
New TransUnion Healthcare analysis examines patient bad debt
CHICAGO, June 26, 2018 (GLOBE NEWSWIRE) -- The challenge posed to hospitals by patient balances after insurance (PBAI) has continued to grow, according to a new TransUnion Healthcare (NYSE:TRU) 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 today 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.
“It is becoming clear that patient balances after insurance is a major factor in increases in uncompensated care at the macro level,” said Jonathan Wiik, author of ‘Healthcare Revolution: The Patient is the New Payer’ and principal for healthcare strategy at TransUnion Healthcare. “Higher out-of-pocket-costs from cost sharing have made patients responsible for an increasing percentage of the bill. Most patients simply cannot afford that1, and hospitals need to make sure they’re actively engaging their patients to ensure they have funding mechanisms for the care needed. Tools like propensity to pay, charity scoring and others can help differentiate a patient’s willingness or ability to pay.”
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.
“Unpaid medical debt continues to pose challenges and the rise in uncompensated care further reflects the importance of implementing new solutions to prevent revenue leakage, which ultimately provides a better patient financial experience,” said John Yount, vice president for Healthcare. “A solution to address Medicare Bad Debt reimbursement is another critical component in a hospital’s toolkit to ensure they’re managing to the increased PBAI. The recent acquisition of Healthcare Payment Specialists by TransUnion Healthcare reinforces our commitment to investment in solutions that assist providers in protecting their earned revenue.”
Healthcare Payment Specialists (HPS) 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. The book is available for purchase on Amazon.
Click here for additional information on managing uncompensated care throughout the entire revenue cycle.
1Federal Reserve Study. https://www.federalreserve.gov/newsevents/pressreleases/other20170519a.htm
About TransUnion Healthcare
TransUnion Healthcare, a wholly owned subsidiary of credit and information management company TransUnion, is a trusted provider of Revenue Protection™ solutions that help providers collect more cash up front and throughout the revenue cycle, and identify and maximize reimbursement opportunities to reduce bad debt. By leveraging our data assets, market-leading revenue cycle management technologies, and deep insights into consumer financial behavior, our partners are better enabled to reduce uncompensated care, engage patients early and improve cash flow. www.transunionhealthcare.com
About TransUnion (NYSE:TRU)
Information is a powerful thing. At TransUnion, we realize that. We are dedicated to finding innovative ways information can be used to help individuals make better and smarter decisions. We help uncover unique stories, trends and insights behind each data point, using historical information as well as alternative data sources. This allows a variety of markets and businesses to better manage risk and consumers to better manage their credit, personal information and identity. Today, TransUnion has a global presence in more than 30 countries and a leading presence in several international markets across North America, Africa, Latin America and Asia. Through the power of information, TransUnion is working to build stronger economies and families and safer communities worldwide. We call this Information for Good. http://www.transunion.com/business
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