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Charity care: Find balance between internal budget, patient needs

Patient Access Weekly Advisor, May 30, 2007

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You're a small, rural hospital with no immediate competition, and you'd like to simplify your charity program for your loyal patient population. This may include an easier application process with less paperwork, less uncomfortable-and sometimes embarrassing to the patient and family-financial-profiling, and wider access to those who fall between the cracks.

Think twice, advises Jeff Shutak, PFS director at The Memorial Hospital (TMH) in North Conway, NH. Shutak, who has served as the PFS director at TMH for 10 years, has employed several charity programs at the 25-bed facility nestled in the Mount Washington resort area. However, he believes that TMH has finally developed a program that suits both the needs of the patient population and the hospital's charity budget.

TMH's first unique idea has holes in it

Test out a few different programs to see how your community will respond to them before committing to one plan. In July 2005, TMH made the mistake-albeit one with altruistic intentions-of committing to a plan that made charity care available to everyone who said they needed it. This idea came only after TMH realized that it was under budget for three of the previous five years and that not enough of its needy population was applying for assistance. "We decided we'd open the door to whoever needed it. We took our patients at face value," Shutak says.

TMH asked patients to fill out a simple, one-page form, which asked for basic demographic information and the patient's income.

"We'd print up a card, I'd sign it, and they'd receive full services," says Shutak. But this no-questions-asked approach came with a steep price.

"We basically had to shut down the program after six months," Shutak says, because too many people requested assistance. TMH's costs doubled that of its charity care budget.

TMH redirects its efforts

When its simplified charity care program failed in December 2005, TMH went back to its lengthy application process and again required documentation, such as bank statements, car registrations, tax returns, and pay stubs. The patients who enjoyed the previous no-hassles approach didn't understand the change. "We just explained that in order for us to meet the needs of the truly needy, we had to tighten things," Shutak says.

This, however, was just a temporary bandage for TMH until it could find a better solution for its population. Now the facility is taking another stab at a customer-friendly approach to charity care. This time, TMH is widening the reach of its charity care program with more flexible eligibility requirements.

Beginning on July 1, anyone with $200,000 or less in assets would qualify for the assistance program. Before July 1, only those with $100,000 or less in assets qualified. Additionally, those with $300,000 in net assets qualify for a 30% write-off, and those with $400,000 qualify for a 15% write-off.

TMH also expanded its net income guidelines. Right now, TMH is offering the assistance program for those at 200% of the federal poverty guidelines (FPG). Starting on July 1, TMH is expanding that to 250% of the FPG. Those at 300% of the FPG qualify for 30% off their bill, and those at 400% get a 15% discount.

TMH decided to rethink its charity requirements after completing statistical analyses on the people it had denied during the previous fiscal year. "We found that more and more people were falling into that percentage cap. We just didn't come up with an arbitrary figure," Shutak says. "We wanted to help everyone, even the people with insurance who are caught in the middle."

Shutak is conscious about not overshooting TMH's internal budget. "We'll cut it off once we reach a certain dollar amount," he says. "We have a very generous [charity] budget, so I hope that never happens."

Sample financial assistance application

Date _________________

1)Patient's name ____________________________________________________________________________________

LastFirstMiddle

Date of birth _______________________________________________________________________________________

2)Patient's Social Security number ______________________________________________________________________

3)Patient's mailing address ____________________________________________________________________________

4)Patient's residence address ___________________________________________________________________________

5)Patient's telephone number __________________________________________________________________________

HomeWork

6)Name of guarantor _________________________________________________________________________________

Last FirstMiddle

(Guarantor is the person responsible for the payment of the bill)

7)Guarantor's mailing address _________________________________________________________________________

8)Guarantor's residence address ________________________________________________________________________

9)Guarantor's phone number __________________________________________________________________________

HomeWork

10)Patient's employer _______________________________________________________________________________

a)Address ________________________________________________________________________________________

b)Telephone number ______________________________________________________________________________

c)Type of work ___________________________________________________________________________________

d)Weekly wages __________________________________________________________________________________

e)Length of employment __________________________________________________________________________

f)Previous employer ______________________________________________________________________________

g)How long at previous employment? ______________________________________________________________

11)Guarantor's employer ____________________________________________________________________________

a)Address _______________________________________________________________________________________

b)Telephone number _____________________________________________________________________________

c)Type of work ___________________________________________________________________________________

d) Weekly wages __________________________________________________________________________________

e) Length of employment __________________________________________________________________________

f) Previous employer ______________________________________________________________________________

g) How long at previous employment? _______________________________________________________________

12)Total monthly income for household

Name ____________________________________________________________________________________________

$ _______________ Wages ____________________________________________

$ _______________ Alimony ___________________________________________

$ _______________ Child support ______________________________________

$ _______________ Pension/annuity ____________________________________

$ _______________ Disability __________________________________________

$ _______________ Public assistance ____________________________________

$ _______________ Workers' compensation _____________________________

$ _______________ SSI/Date of first payment ____________________________

SSI eligibility date __________________________________

$ _______________ TOTAL

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