Hospitals To Pay Insurance Premiums For Patients?

thinkBy: Anthony Brino

Uncompensated care was supposed to be a thing of the past, but it’s persisting in many states not expanding Medicaid eligibility. As an alternative, for some high-cost uninsured patients, hospitals are turning to a new option.

In his 32 years working in insurance operations at Forrest General Hospital in Hattiesburg, Mississippi, Pat Riley has seen the problem of uninsured patients ebb and flow — with poor health outcomes for individuals and uncompensated costs for the health system — and the Great Recession brought another surge.

Now director of insurance at Forrest General, the 512-bed flagship of Forrest Health, Riley is optimistic about the potential of the Affordable Care Act. While Mississippi, like 23 other states, isn’t expanding Medicaid eligibility to low-income childless adults, those earning above 100 percent of the federal poverty level can get premium and cost-sharing subsidies for exchange plans — a message that Riley and Forrest Health try to hammer home to the residents of greater Hattiesburg through participation in health fairs, town halls, public service announcements and outreach to patients.

“It became obvious very early on that people who were eligible for the subsidies automatically assumed that they couldn’t afford a plan,” Riley said.

Federally certified as a marketplace application counselor, Forrest Hospital focused on enrollment assistance for uninsured patients being treated, building off prior work trying to figure out if uninsured individuals were eligible for any type of public assistance, whether Medicaid or disability coverage.

During the first open enrollment period, the hospital and their vendor, Emdeon company Chamberlin Edmonds, used previous data from those encounters to identify and reach out to about 2,0000 patients earning between 100 and 400 percent of the federal poverty level, those now eligible for exchange subsidies.

Riley said the hospital was able to help a range of low-income residents enroll in good health plans with fairly affordable premiums, but that there are many who still remain uninsured. In Mississippi and the 23 other states not expanding Medicaid eligibility there are still people who are simultaneously too poor to qualify for exchange subsidies and too rich for Medicaid, or excluded from it (such as childless adults).
“I’ve talked to probably 50 or 60 people who fell into that category,” Riley said.

In treating the neediest uninsured patients, though, one option remains for Forrest Health and other providers in similar predicaments: paying patients’ insurance premiums.

“We’ve discussed this in length and talked with our attorneys and it does appear that we could do that if we so choose,” Riley said. “And we’re still considering that. We’re trying to work on a way to identify certain types of patients — someone like an uninsured patient who’s been diagnosed with cancer. We have not done it yet.”

Among a confluence of challenges in provider reimbursement are poor uninsured patients and patients with high deductible health plans who can not always pay in full for thousand-dollar-plus out-of-pocket bills. Also, health plans sold through public insurance exchanges are required to offer a three month grace period for members who fail to pay their premiums, but they can pend or deny provider claims after 30 days.

That prospect has led the American Hospital Association and Catholic Hospital Association to raise the option of third-party payments, via nonprofit foundations, to help patients pay for health insurance — and they’ve gotten a tentative okay from the feds.

Last fall, then-Health and Human Secretary Kathleen Sebelius advised the organizations that such payments are not necessarily considered kickbacks under federal healthcare law and could be permissible in certain cases, while also noting that they could also be barred as part of insurer-provider contracts.

Insurance advocates have pushed back against the idea of permitting healthcare business-affiliated charities to make third-party payments, as opposed to non-profit publicly-funded organizations like Indian tribal groups and the Ryan White HIV/AIDS Program, from whom insurers must take payments. “It is a conflict of interest for hospitals and drug companies to pay patients’ premiums and cost-sharing for the sole purpose of increasing utilization of their services and products,” Karen Ignagni, president and CEO of America’s Health Insurance Plans, said earlier this year.

But, Sebelius said that the option is a legal one: Third-party payments of premiums and cost sharing “made on behalf of Marketplace QHP enrollees by private, not-for-profit foundations…are not prohibited by HHS’s rules,” she wrote.

Unless the Governors in states not expanding Medicaid eligibility, including much of the South, decide to participate in the program, the problem of uninsured patients seems bound to continue for hospitals like Forrest General, along with the demand for third-party payment options.

“I do not see a solution at this point that’s really going to help these folks,” said Pat Riley. “I hope our state looks at expansion or some time of plan.”