Local CEO surprised by Kline’s review of hospital tactics

ORIGINALLY WRITTEN DON RATZLAFF
When Kansas Attorney General Phill Kline announced last week he was investigating whether nonprofit hospitals are using unethical or heavy-handed practices to collect money owed on unpaid medical bills, at least one nonprofit hospital administration was surprised.

Mike Ryan, chief executive officer of Hillsboro Community Medical Center, said he thinks Kline’s initiative may be more motivated by political gain than a quest to correct injustices against the poor.

“I’ll be surprised if he gets much of anything out of this investigation,” Ryan said. “I think he’ll spend a lot of time and money, but I think it’s kind of a sensational, political sort of thing. I really don’t think he’s going to find much.”

Ryan speaks from his experiences with various nonprofit hospitals across Kansas, including HCMC.

“By in large I feel pretty good about Kansas health care and Kansas hospitals and the job they do-and even the collection agencies (they use).

“(Kline) is trying to make us seem like ‘the evil hospital’ out to gouge the uninsured,” he said. “Nothing could be further from the truth, for the most part.”

Every effort to assist

If anything, nonprofit hospitals, including HCMC, go out of their way to accommodate people who are unable to pay their hospital bills, Ryan said.

Marion Regier, chief financial officer, said the procedure at HCMC is similar to most hospitals.

“We make every attempt to identify those patients who are low income, and we try to assist them in getting a Medicaid application if we feel they qualify for Medicaid assistance,” she said.

But staff assistance doesn’t always translate into action.

“We can help them complete (the form), but we cannot force them to sign it and to deliver it to the SRS office, which is sometimes where it falls through,” Regier said.

“We will make every effort to find the right insurance coverage,” she added. “But if they aren’t willing to provide us with the right information, we have no option but to consider them a delinquent account.”

Collection efforts

Regier said HCMC waits 90 days before it turns a past-due account over to a collection agency.

“Once the collection agency finds (debt holders) make no effort to contact them, they’ll do a credit check to see if they have the ability to make payments,” she said.

“If they do own assets, or have the ability to make payments, then the collection agency may file a judgment against them.”

To reclaim the debt, the collection company may garnish wages or file a lien against the debtor’s house.

“They never foreclose on a house-ever,” Regier said. “But in the event the house is sold, then the portion of what they owe us can be subtracted from the sale.”

Better alternatives

HCMC has kinder and gentler alternatives for patients who are unable to pay their bill, including a charity-care program.

“If someone’s income is 150 percent of the federal poverty level, and they don’t have a lot of assets, they will qualify for full charity care,” Regier said.

Over the past year five years, HCMC has written off $465,360 in unpaid medical bills.

“Some of that was through charity care, but a lot was people unwilling to contact us regarding us giving them charity care,” Regier said.

She estimated only about 15 percent of the amount written off was true charity care.

If the full amount had been received as payment, HCMC would have been profitable in each of the past five years, Regier said.

Interest-free payments

People who don’t qualify for charity have the option of making extended, interest-free payments on their bills, according to Regier.

“If they’re unable to make that payment, we definitely will work with them to set up payment they can afford. But again, they have to provide us with the information to substantiate the fact they can’t afford to pay.”

Keeping the doors open

The fragile economic health of small rural hospitals like HCMC underline the importance of making sure bills are paid, according to Ryan.

“We have a duty to all of our community to aggressively collect patient accounts,” he said. “That’s part of our business to do that. If we didn’t collect accounts, that makes the cost of health care higher for those who do pay.

“I think the majority of community members expect us to try to collect what we bill.”

Ryan said he has worked in large-city hospitals where up to one third of their billings end up as bad debt. That’s a far cry from the local situation, where only about 1.4 percent of HCMC’s total gross revenue ends up as bad debt.

“Marion County and the people we serve are pretty conscientious about paying their bill or being insured,” Ryan said. “We’ve even had churches help people with their bills.”

Non-incentives for nonprofits

Ryan said he’s surprised the attorney general is focusing on nonprofit hospitals, who have even less incentive to coerce people into pay their bills than for-profit institutions do.

“If we collect money or don’t collect money, it doesn’t go into our own pockets,” he said. “We don’t answer to investors.

“There’s nothing evil about for-profit health care,” he added. “All hospitals try to make money so they can replace their plant and buy new equipment. We need to do that, too, to keep the doors open. But we’re not out to make ourselves wealthy.

“So we don’t have the incentives there might be for a for-profit hospital on collection activities. We’re doing it for the good of the community.”

More from article archives
Tabor tennis team stopped by Nebraska and Bethany
ORIGINALLY WRITTEN STAFF The Tabor College tennis team found the going tough...
Read More