Patient Balances After Insurance Continue to Increase in 2018, Driving Bad Debt and Uncompensated Care
June 26 2018 - 6:00AM
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.
1 Federal Reserve Study.
https://www.federalreserve.gov/newsevents/pressreleases/other20170519a.htm
About TransUnion
HealthcareTransUnion 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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Contact |
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Dave Blumberg |
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TransUnion |
E-mail |
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dblumberg@transunion.com |
Telephone |
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312-972-6646 |
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