Ballad Health to reduce expenses for low-income patients, expand charity policy

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JOHNSON CITY, Tenn. (WJHL) – Ballad Health announced Monday that it is taking steps to reduce costs for low-income patients and patients with high insurance company deductibles. The health system also announced it will increase discounts for the uninsured and expand access to free and discounted care.

PREVIOUS STORY: Ballad Health announces efforts to reduce costs for low-income patients, expand free care

Effective immediately, Ballad Health officials said the discount off charges for uninsured patients at physician practices, urgent cares, diagnostics, and hospitals will increase to 85 percent.

“What we’ve announced today is that we’re increasing our discount for the uninsured to 85 percent across the board, any doctor’s office, any urgent care, any hospital, you get an 85 percent discount if you are uninsured,” said Ballad Health Chairman and CEO Alan Levine at a press conference Monday. “If you are below 225 percent of the federal poverty level, we will write 100 percent of the cost of your care off, the hospital will absorb a hundred percent of that cost.”

Levine explained that, as an example, “if you are a family of four and you make $57,000 to $58,000 a year, you’re eligible to have all of your healthcare costs written off.”

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Starting April 1, “presumptive eligibility” will be available for patients who could be eligible for free care or discounts under Ballad’s expanded charity policy.  

“The second part of the announcement that we’re going to be deploying is called ‘presumptive eligibility,'” Levine explained. “Presumptive eligibility, under our former charity policy, remember before we merged, if you were up to 200 percent of the federal poverty level, you could apply for our charity policy, and if you qualified then you were given the benefit of the discount that came with the charity policy. After we merged, we raised that threshold from 200 percent to 225 percent, which expanded our charity policy to more people. What we’re doing today is we’re announcing that we’re moving towards what’s called presumptive eligibility.”

Simply put, after April 1, 2020, patients will no longer have to apply to receive the benefit of the charity. Levine explained that Ballad Health is investing in analytics that utilizes publicly-available data, along with already-available to do what’s called “propensity modeling,” that identifies if somebody would likely qualify for the charity policy.

“What we’re finding from talking to a lot of health systems is, and it’s somewhat of a common concern, a lot of health systems have charity policies but patients, for whatever reason you either choose not to apply or don’t want to provide certain pieces of information, so they don’t want to provide financial information or whatever and that’s understandable, but if you don’t do it then you don’t qualify and therefore you can’t benefit from the charity policy, and if you don’t benefit from the charity policy then the hospitals are very likely to take steps to try to collect whatever your out-of-pocket portion is,” Levine said.

Presumptive eligibility, according to Levine, is designed to identify patients who would likely qualify, and then give them the benefit of a discount without them ever having to apply for or even necessarily being aware of it. It will apply, he continued, not just to the people who are uninsured, but also people who have insurance but who can’t afford their deductible.

If you have insurance, and you have a deductible, and you are below 225 percent of the federal poverty level, we will write off 100 percent of your out-of -pocket, your deductibles, your co-pays, we will write it off. So, the charity policy will apply on top of whatever your deductible is. If you are a single person earning $56,000 a year, you’re at 450 percent of the federal poverty level, that person will get a 10 percent discount from their deductible, so we’re tiering the discounts from free care for people of 225 percent, if you’re at 250 percent, it’s a 90 percent discount and the discount tails off as your income goes up. So, at 450 percent, it’s a 10 percent discount. So, if you’re insured, that discount applies directly to whatever your out-of-pocket portion would be. If you are uninsured, you start with an 85 percent discount because you’re uninsured. Then, wherever you are in that income bracket, we apply that discount on top of that, the charity discount on top of it. If you’re uninsured, you get an 85 percent discount, if you’re a single person, who makes $56,000 a year, you’re at 450 percent of the federal poverty level, you get an additional 10 percent discount, off of that 85 percent discount. So, if you have a $1,000 [emergency room] bill, and you’re that person that makes $56,000 a year…if you’re at 450 percent of the federal poverty level, $850 gets written off right off the top and then you get an additional 10 percent reduction from that. So, the 85 percent on your ER visit just became a $150 ER visit and the you get a 10 percent discount from that. 

Ballad Health Chairman and CEO Alan Levine

The 2019 federal poverty level guidelines for the 48 states on the continental Unites States and the District of Columbia from the U.S. Department of Health and Human Services show that the annual income for one person in one year would be $12,490. The federal poverty level for a family of four would be $25,750.

Levine explained the objective is to increase affordability for individuals, but the big concern that we have is this is not a long-term solution for this problem. 

“Our ultimate goal, in a nutshell, is to try to do what we can to help people in an environment that the hospitals didn’t create,” Levine continued to explain. “The hospitals did not create $5,000 deductibles or $3,000 deductibles that people can’t afford, but unfortunately, we’re left to have to work with the patients who are stuck with the burden of these deductibles and our folks who work in our business office, who deal with these people every single day, they’re heartbroken by it because they see these people who struggle, who want to pay their bills but can’t afford it, they bought an insurance policy, they thought they had insurance until they show up and they find out that they have this huge deductible they have to jump over, and meanwhile the hospital sits here with an average reimbursement of $10,000, where if it’s a $5,000 deductible,  we’re taking a 50 percent pay-cut. We don’t get to go to our nurses and say we’re going to cut their pay by 50 percent, we don’t get to go to the doctors and say we’re going to cut their pay 50 percent. We have to provide for those services.”

According to a press release from Ballad Health Monday, an average 17 percent price reduction for all physician practices and urgent care facilities was announced in September 2019. The reduction increased the discount for uninsured people to 77 percent, according to Ballad.

“I think if you go around the country, you could probably count on one hand, if any, the number of health systems who have actually reduced their pricing, but we did that because we wanted to make healthcare more accessible in the primary care setting and in the urgent care setting, which is part of a larger strategy of trying to have patients get care in a lower-cost setting than go into an emergency department,” Levine said Monday.

Over the last few years, Levine said that “there’s been a massive shift in the insurance industry to shifting these deductibles onto patients, and it’s been brewing for several years, and so there’s been a lot of stories nationally about health systems and actions they’re forced to take to collect money from patients, I think those are very regrettable stories, some of them I was frankly surprised to see how far some of the health systems go, Ballad is not one that has gone as far as other health systems have gone but this is obviously an issue that’s not going to go away.” 

According to Levine, if Ballad Health doesn’t solve the problem of “shifting of costs to patients, who have bought insurance, who can’t use the insurance, then that result is that the problem is just going to keep compounding” and the steps taken Monday, are intended to help people locally who are affected by this.

The steps that Ballad Health is taking aim to help patients that have insurance but also help patients who do not have insurance.

“Our board feels an obligation to try to do something to help the people that live here,” Levine said. “The reality is there are people that are lower-income that have deductibles beyond their reach, and we feel that we want to do something, and we have to do something structural and systemic so that it’s fair, it’s easy to understand and that it’s easy to actually apply. This is a systemic approach. We have millions of patient contacts a year and so we’ve got to have a process and procedure that is relatively similar for every patient we deal with, and that’s why we try to create a structure that’s tied around the various percentages of poverty so that we try to fit it and we try to target it towards the people that need it the most. We have a fiduciary responsibility to collect from folks who have the means to pay, it’s not fair to people who do pay their bill, for us not to try to collect from other people who could pay their bill but choose not to.” 

What we don’t want is for people to not seek care who need it because they’re afraid of the out-of-pocket cost. 

Ballad Health Chairman and CEO Alan Levine

Levine mentioned that the solution to the problem of patients not being able to pay their medical bills is not to simply shift the cost of healthcare to individuals who are low-income, which is seen nationally with hospitals who sue their patients.

“Our policy about how we collect bills has not changed,” Levine emphasized. “Our charity policy has become more liberal, I mean, after we merged, we went from having the 200 percent threshold to 225 percent,  but our approach to how we collect has never changed. What has changed is over the last six or seven years these deductibles have skyrocketed and the shift of liability to patients has gone way up, and so that’s why you’re seeing all over the country, I think this crept up on hospitals in a way they didn’t quite understand it.”

The reality is, Levine explained, that most of the lower-income patients in our region are unable to pay their medical bills, “so why put them through the agony of a collections process that we all know they’re not going to be able to pay?”

“Our mission as a health system is to be accessible to people who need us and we’re extremely sensitive to the fact that there are people out there who are not able to pay what their insurance companies have imposed on them, and we’re going to do what we can to help, but we’re imploring on the insurance industry, and our federal lawmakers to sort of step in and realize that this is not what the purpose of insurance was. Insurance is intended that when you pay a premium, you have a reasonable out-of-pocket participation, but when you’re brought to the ER with a heart attack, you expect that you’re not going to be stuck with a $5,000 bill and I don’t think that’s an unreasonable expectation for patients to have, so that’s why we’re doing this and our board feels pretty good about it,” Levine said.

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“What we’re doing is very different but in the near-term, I think we’ve taken the quality question very seriously,” Levine continued. “There are two things that people have said happen when mergers occur, pricing goes up and quality deteriorates…We’ve increased our discounts, we’ve expanded eligibility for these discounts to more people, so I think we’re taking the proper steps to not let what people pay to go up higher than what it would’ve gone up otherwise, and in some cases, we’ve actually decreased the total cost of care.”

Ballad Health also announced Monday it has updated its chargemasters to align them between its legacy health systems. The press release sent out on Monday said chargemaster for the system is posted on the Ballad website and consists of tens of thousands of codes and charges.

Every hospital nationwide is required by law to post its chargemaster publicly.

Changes to the Ballad Health chargemaster have been reviewed by the state Certificate of Public Advantage monitor and have been determined to be in compliance with the provisions of the COPA intended to limit the prices Ballad Health may charge.

“Hospitals are required to publish chargemasters, meaning we have thousands of charges that we have to publish on our website, which we do, and some organizations have chosen to take those charges and compare it with other organizations’ charges in the competitive marketplace. Contrary to popular opinion, Ballad is not a monopoly, we do have a competitive marketplace,” Levine said Monday. “Those chargemasters are extremely complex documents that take into consideration all of the care that’s provided in a hospital to people who are uninsured, people who have Medicaid where the reimbursement doesn’t cover the cost, the charge structure has to take those things into account and so some organizations that don’t have that same responsibility will then use those charges which are misleading because we don’t get paid what those charges are, they use those charges to compare themselves and unfortunately for folks who don’t do the homework, they may end up paying more.”

In a recent meeting of the Southwest Virginia Health Authority, the release said, the independent monitor employed by the authority reported that hospital chargemasters are “not terribly meaningful,” because a chargemaster is an accounting tool intended to capture all of the costs experienced in the health system; yet, almost no patient, employer or insurance company pays what is in the chargemaster.

“My advice to people is when folks are out there advertising charges, it’s really beneficial to people – call us. Tell us what your situation is. If you need diagnostics, you may very well qualify for low cost, free care or you may qualify for a discount that’s so substantial, you will pay less than if you go to a diagnostics outside center, where you do not benefit from our charity policy,” Levine said.

For more information on financial assistance, click here.

“This is a work in progress. We’re learning as we go, but our fundamental objective is to make sure that we do everything we can to continue to hire nurses and to support our nursing staff to make sure people feel that they can access the services when they need it,” Levine assured.

Patients with questions about billing practices should call 423-431-1700 or 423-408-7400.

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