Why One New York Health System Stopped Suing Its Patients – KFF Health News

Rochester, NY – Jolynn Mungenast spends her days looking for ways to help people pay their hospital bills.

Working out of a warehouse-like building in a dingy corner of this former industrial city, Mungenast gently walks patients through health insurance options, financial assistance and payment plans. Most people want to pay, said Mungenast, a financial counselor for Rochester Regional Health. Many times, they can’t do this.

“they are afraid. They are nervous. They’re upset,” said Mungenast, who worked with an elderly patient to settle a $143 bill on a recent call. “They think, ‘I don’t want this to affect my credit rating. I don’t want you to come and take my house.’

At Rochester Regional Health, that won’t happen. The nonprofit system in Upstate New York is one of the few nationally that prohibits all aggressive collection activities. Patients who do not pay will not be taken to court. Their salary will not be reduced. Liens will not be placed on their homes or they will not be denied care. And unpaid bills won’t sink their credit score.

American hospital executives often insist that lawsuits and other aggressive collections, although distasteful, are necessary to protect health systems’ finances and prevent freeloading.

But at Rochester Regional, skipping these collection tips hasn’t hurt the bottom line, said Chief Operating Officer Jennifer Esslinger. The system has also been able to shift staff from its collections department because it costs less to go after patients who have not paid.

Esslinger said the change has had another benefit: rebuilding trust with patients.

“We think and talk a lot and do a lot of strategizing about where mistrust is in health care,” he said. “We have to address this as a barrier to meaningful health care. “We have to earn the trust of the people we serve so they can get the care they need.”

‘People can’t afford it’

Rochester Regional, a large health system that serves various communities on the southern shore of Lake Ontario, is large, with annual revenues of more than $3 billion.

But in a place where powerful employers like Kodak and Xerox have vanished, finances can be challenging. In 2022, Rochester Regional faced a nearly $200 million deficit.

Patients have their own challenges. Unable to pay their bills, many people faced collections, or even lawsuits. “We will go to court,” admitted Rochester regional financial consulting head Lisa Poworoznak.

Then again, before the pandemic, hospital leaders looked more closely at why patients weren’t paying.

The obstacles became apparent: confusing insurance plans, high deductibles, and inadequate savings, Paworosznek said. “Patients have a lot of different conditions,” he said. “It’s not really as simple as demanding payment and then filing legal action.”

Nationally, nearly half of adults are unable to pay a $500 medical bill without going into debt 2022 kff poll found. Also, the average annual deduction for a single employee with job-based coverage now above $1,500,

Rather than chasing down those who did not pay – an expensive process that often yielded meager returns – Rochester Regional resolved to find ways to get patients to settle bills before collections began.

The health system made new efforts to enroll people in health insurance. New York has one of the strongest safety-net systems in the country.

Rochester Regional also expanded its financial assistance program, making it easier for low-income patients to receive free or discounted care.

At many hospitals, applying for assistance is complicated — with lengthy applications that demand extensive information about patients’ income and assets, including cars, retirement accounts and property, KFF Health News has found. Patients applying for assistance at Rochester Regional are only asked to disclose their income.

Ultimately, the health system looked for ways to get more people on payment plans so they could pay off larger bills in a year or two. Importantly, the payment plans are interest free.

That was a change. Rochester Regional, like some other major health systems across the country such as Atrium Health, used to Trust financing companies Interest was charged on it, which could add thousands of dollars to patients’ debt.

“People can’t afford it,” Paworosznek said.

Ending ‘Extraordinary Collection Actions’

Working more closely with patients on their bills led Rochester Regional to stop taking them to court.

The health system has also stopped reporting people to credit bureaus, a practice used by many medical providers that can lower consumers’ credit scores, preventing them from renting an apartment, getting a car loan or even That it becomes difficult to get a job.

In 2020, Rochester Regional adopted a written policy prohibiting all aggressive collections by the system or its contracted collection agencies.

This put Rochester Regional in select company. one 2022 kff health news investigation An examination of billing practices at 528 hospitals nationwide found only 19 that explicitly prohibited extraordinary collection actions.

These include major academic medical centers, including UCLA and Stanford University, but also community hospitals such as El Camino Hospital in the Bay Area of ​​California and St. Anthony Community Hospital outside New York City.

Except for extraordinary collection activities: University of Vermont Medical Center; Ochsner Health, a large nonprofit based in New Orleans; and UPMC, a massive system based in Pittsburgh. Like Rochester Regional, UPMC officials said they were able to eliminate invasive collections by developing better systems that allow patients to pay their bills.

Elizabeth Benjamin, vice president of the Community Service Society of New York, a nonprofit that has led efforts to ban invasive hospital collections, said there’s no reason more hospitals shouldn’t follow suit, especially From non-profit organizations, who in turn are expected to serve their communities. For their tax-exempt status.

“The value is promoting health, caring for populations, promoting health equity,” Benjamin said. “Sueing people for medical debt or engaging in extraordinary collection actions is really anathema to all those values,” he said. “Forget about your ‘cancer-mobile’ or your child’s vaccination clinic.”

Rochester Regional’s approach does not eliminate medical debt, which Burdens an estimated 100 million people In the US and the payment plans encouraged by the system may still mean big sacrifices for some families.

But Benjamin appreciated the Rochester regional ban on offensive collecting. “I give them big props,” she said. “This should never have been allowed.”

New laws in New York All medical bills will now be prohibited from being reported to credit bureaus and other collection tactics, such as wage garnishment, will be prohibited.

Many hospital finance executives nevertheless say they need options to pursue patients who have the means to pay.

“It’s probably a very specific case where there’s an issue of someone not paying their bill,” said Richard Gundling, senior vice president of the Healthcare Financial Management Association, a trade group.

But at the Rochester regional finance offices, officials say they almost never get patients who refuse to pay. Most often, the problem is that the bills are too large.

“People don’t have $5,000 to pay that bill,” Paworosznek said.

When calling patients, Mungenast tries to reassure patients on the other end of the line. “Put yourself in their shoes,” he said. “What would it be like if you were getting that?”

About this project

“Diagnosis: Debt” is a reporting partnership between KFF Health News and NPR that explores the scale, impact and causes of medical debt in America.

The series is a year-long investigation by KFF using original polling, court records, federal data on hospital finances, contracts obtained through public records requests, data on international health systems, and the financial aid and collection policies of more than 500 hospitals nationwide. based on. ,

had additional research Powered by Urban Institutewho analyzed credit bureau and other demographic data on poverty, race and health status for KFF Health News to find out where medical debt is concentrated in the US and what factors are associated with higher debt levels.

JPMorgan Chase Institute analyzed records A sample of Chase credit card holders to see how major medical expenses might affect customers’ balances. And the CED Project, a Denver nonprofit, worked with KFF Health News on a survey of its clients to explore the relationship between medical debt and housing instability.

KFF Health News journalists worked with KFF public opinion researchers to design and analyze “”.KFF Health Care Loan Survey, The survey was conducted from February 25 to March 20, 2022, online and via telephone, in English and Spanish, among a nationally representative sample of 2,375 U.S. adults, including 1,292 adults with current health care debt and 382 with no health care debt. Adults were involved. Last five years. The margin of sampling error is plus or minus 3 percentage points for the full sample and 3 percentage points for those with current debt. For results based on subgroups, the margin of sampling error may be higher.

Reporters from KFF Health News and NPR also conducted hundreds of interviews with patients across the country; spoke to physicians, health industry leaders, consumer advocates, debt lawyers and researchers; and reviewed numerous studies and surveys about medical debt.