April Wilson,

Now that October 1 has come and gone, it is time for hospital revenue cycle professionals to consider how the new health insurance exchanges can be leveraged to grow revenues.

Several studies have shown that the average American does not understand how the Patient Protection and Affordable Care Act (PPACA) will impact them, nor do they understand how to buy health insurance under the new exchanges. Although grants are available for hospitals willing to be navigators (meaning that those hospitals will market the new exchanges to their local communities), there are other ways that not-for-profit hospitals can help their local community understand their options.

Tip 1: Identify the patients in need

The first step is to leverage predictive analytics to understand which patients are likely to qualify for charity care under your hospital’s Financial Aid Policy. The reason that charity care continues to be important even with the new health insurance exchanges lies within the Supreme Court ruling of June 2012. That Supreme Court ruling made it a state-by-state decision whether or not to expand Medicaid. In the states that decide not to expand Medicaid, there will be no subsidies for health insurance exchanges from the government for those who live below the federal poverty level.

In short, people who can’t afford insurance also can’t afford medical care. This means that you’re still going to have a significant population of people who will require charity care or other financial assistance within your local community.

Tip 2: Reach out, beyond your patients

The second step you can take is to provide information about charity care and insurance options to people in your community that are not yet patients. Some hospitals are promoting government or state health insurance exchanges at Laundromats, churches, and even high school football games. In some cases, hospital employees even bring tablet computers to work, in order to sign people up for health insurance on the spot.

Tip 3: Know your charity spend

Finally, it’s important to audit the percentage of revenue your hospital spent on charity care in the prior year. Hospitals, particularly not-for-profit hospitals, are coming under increased scrutiny when it comes to the percentage of their income being spent on charity care.

Not-for-profit hospitals are expected to spend about 3.5% on charity care. However in some states, the guidelines are different. For example, in Texas not-for-profit hospitals are expected to spend 4% on charity care. In Illinois, there is a bill currently before the Legislature that proposes not-for-profit hospitals spend at least 8% of their revenue on charity care.

With more revenue and expense data becoming available to the public under the patient protection and affordable care act, it is expected that it will be more and more common for the press to cover whether not-for-profit hospitals are actually living up to their charter to serve their local communities.

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