Knowledge Center

Changes may be Coming October 1st, 2020 for Medicare Bad Debt

By Shawn Gretz, President of Americollect

In late May, the Centers for Medicare & Medicaid Services (CMS), proposed changes and updates to the Medicare bad debt rules and regulations[i]. While the comment period has ended, there are several changes that hospitals should be aware of as they go into effect before, on, and after October 1st as noted by each section of the IPPS rule. This article will shed a light on what some of those changes are to prepare hospitals for the implementation of the rule.

Before we dive into those changes, lets first discuss what the Medicare Bad Debt rule is at very high level as it is complex. With the implementation of Medicare Part A (Facility charges), beneficiaries (patients) where made responsible for payments of copayments and deductibles. Shortly after this implementation, Medicare recognized that beneficiaries may fail to pay a deductible or coinsurance, which could lead to non-Medicare patients bearing those costs. Because of this, Medicare introduced a program where if a beneficiary did not pay for their services, Medicare would then reimburse the hospital for the non-payment, as long as:

  1. The bad debt was related to “covered services” and derived from the deductible andcoinsurance amounts.
  2. The hospital established that “reasonable collection efforts” were made.
  3. The bad debt was uncollectible when claimed “worthless.”
  4. Sound business judgment established that there was no likelihood of recovery at any time in the future.

CMS Proposed Changes:

Retroactive – CMS is proposing that many of the rules will be “retroactive.” The reasoning is that a “retroactive effective date does not affect prior transactions or impose additional duties or adverse consequences upon providers or beneficiaries, or does it diminish rights of providers or beneficiaries.” This may create urgency for hospitals to claim “worthlessness” of accounts in the fiscal year ending September 30 if the changes below will impact Medicare reimbursements.

Reasonable Collection Efforts – Non-indigent – Several changes were proposed for Non-indigent individuals including:

  1. Defining “Non-indigent” as “a beneficiary who has not been determined to categorically or medically needed by a State Medicaid Agency to receive medical assistance from Medicaid and has not been determined to be indigent by the provider for Medicare bad debt purposes.” The attempt is to define who is indigent, which then defines who is non-indigent instead of remaining silent on this matter.
  2. “Reasonable collection efforts” – This has always been the standard to which a provider must attempt to collect against a beneficiary including, “using similar efforts to collect from non-Medicare patients”, “issuance of a bill shortly after discharge or death, subsequent billing, collection letter, and telephone calls or personal contacts which constitutes a genuine, rather than token, collection effort” and finally “including using or threating to use court action to obtain payments”.
    1. “Shortly after” – This has been considered too vague. A timeframe of 90-120 days would afford greater flexibility, but it would not deal with secondary payers. CMS has proposed the following – “It must involve the issuance of a statement to the beneficiary or party responsible for the beneficiary’s personal financial obligations on or before 120 days after: 1. The date of Medicare remittance advice; or 2. The date of the remittance advice from the beneficiary’s secondary payer, if any; whichever is latest.”This language will allow providers additional time to bill beneficiaries without the fear of losing out on Medicare bad debt recoveries.
    2. “120 days collection effort” & partial payments – Providers must make a “reasonable and customary attempt” to collect a bill for at least 120 days from the date of the first bill mailed(yes the regulation still says “mailed” for those that have started using “e-statements”) to the beneficiary. CMS effort is to further define what happens with a “partial payment”. The proposal is that the 120-day collection effort must renew again from each partial payment. This change has far reaching implications for claiming Medicare Bad Debt accounts and should also be considered for any “returned” accounts from collection agencies to be claimed on the “cost report”.
    3. Previously claimed Medicare Bad Debt – CMS has proposed that – “Any payment on accounts made by the beneficiary, or a responsible party, after the write-off date but before the end of the cost reporting period, must be used to reduce the reimbursable Medicare bad debt costs.” Meaning if a payment comes in before the end of the fiscal year, this payment must reduce the final bad debt claimed amount. These payments will need specific tracking. Also, if a payment comes in for a prior fiscal year, then again, you must reduce the provider’s reimbursable Medicare bad debt costs in the period it is recovered. This proposal again will apply to “before, on, and after” the effective date of this rule making it retroactive and complex for any hospital system to find those payments (if any).
    4. Similar Collection Efforts – Currently the guidance states that if a provider sends non-Medicare accounts to a collection agency, then the provider must similarly refer its Medicare accounts of “like amount” to a collection agency. “Like amount” can be used for balance limitations. If a provider does use a collection agency they have to “ensure” that the collection agency’s collection efforts is similar to the effort the collection agency puts forth to collect comparable amounts from non-Medicare patients. Finally, the fees charged by the collection agency are allowable administrative costs. Utilizing a “net” contingency model for payments from collection agencies may inadvertently have applied the contingency fees as Medicare bad debt vs where they should be classified as “Administrative fees”. This is a question you will want to ask your accountant along with your collection agency to ensure you are properly accounting for the fees they are charging for Medicare bad debt.
    5. Billing and Collection Policy – CMS has now clarified that a Billing and Collection Policy or “documentation” must be required. This should not be a large endeavor for most hospital facilities as 501r has already required this.
  3. Indigent Beneficiaries Proposed Changes
    1. Policy for Determination of Indigence – CMS is proposing changing the determination of indigence from –
      1. The patient’s indigence must be determined by the provider, not by the patient, i.e., a patient’s signed declaration of his inability to pay his medical bills cannot be considered proof of indigence;
      2. The provider should take into account a patient’s total resources which would include, but are not limited to; an analysis of assets (only those convertible to cash, and unnecessary for the patient’s daily living), liabilities, and income and expenses. In making this analysis the provider should take into account any extenuating circumstances that would affect the determination of the patient’s indigence;
      3. The provider must determine that no source other than the patient would be legally responsible for the patient’s medical bill, e.g., title XIX, local welfare agency and/or a guardian; and
      4. The patient’s file should contain documentation of the method by which indigence was determined in addition to all backup information to substantiate the determination.

These changes refer to creating a “policy for determination of indigence” which would describe the method by which indigency, or medical indigence, was determined and the beneficiary-specific documentation which supports the provider’s documentation of indigence. To me, this should be simply ensuring your Financial Assistance Policy is also your Policy for Determination of Indigence. You could also create a separate Policy for Determination of Indigence because an “an analysis of assets (only those convertible to cash, and unnecessary for the patient’s daily living), liabilities, and income and expenses” should be completed for determining indigence.

Must submit to State for Dual – CMS is proposing changes for dual eligibility to be considered a reasonable collection effort, a provider must determine whether the State’s Title XIX Medicaid Program (or a local welfare agency, if applicable) is responsible to pay all or a portion of the beneficiary’s Medicare deductible and/or coinsurance amounts. To make this determination, the provider must submit a bill to its Medicaid/title XIX agency (or to its local welfare agency) to determine the State’s cost sharing obligation to pay all or a portion of the applicable Medicare deductible and coinsurance.

4. Accounting Updates on Medicare Bad Debt

  1. Implicit price concessions – CMS is proposing for cost reporting periods beginning on or after October 1, 2020, bad debts, also known as “implicit price concessions,” are amounts considered to be uncollectible from accounts that were created or acquired in providing services. “Implicit price concessions” are designations for uncollectible claims arising from the furnishing of services and may be collectible in money in the relatively near future and are recorded in the provider’s accounting records as a component of net patient revenue.
  2. Reductions in revenue CMS is proposing for cost reporting periods beginning before October 1, 2020 that bad debts, charity and courtesy allowances should represent reductions in revenue.
  3. Contractual Allowances CMS is proposing for cost reporting periods beginning on or after October 1, 2020, Medicare bad debts must not be written off to a contractual allowance account but must be charged to an expense account for uncollectible accounts (bad debt or implicit price concession).

These changes may require some significant updates to ensure your Medicare bad debt accounts are correctly quantified on upcoming cost reports. As always, if there are any questions on Medicare bad debt, please do not hesitate to reach out.

[i] https://www.federalregister.gov/documents/2020/05/29/2020-10122/medicare-program-hospital-inpatient-prospective-payment-systems-for-acute-care-hospitals-and-the#open-comment

Americollect Recognized as a Best Place to Work in Collections

Americollect is excited to once again be named by insideARM as one of the 2020 Best Places to Work in Collections. This is the 11th time in the last 12 years that the Ridiculously Nice team at Americollect, which was ranked top 10 in the nation for large companies (150+ employees), has been recognized.

“It’s an incredible honor to be included on this list,” said Americollect CEO Kenlyn T. Gretz. “It shows that a company that truly values culture attracts the right people, making it a Ridiculously Nice place to work.”

The program was established by insideARM, the leading independent news and information provider for the Collections industry, and is administered by Best Companies Group, which conducts over 60 local, national and industry “Best Places” programs each year.

This survey and award program was designed to identify, recognize and honor the best places of employment in the Collections industry. The Best Places to Work in Collections list is divided into three size categories: Small (15-49 employees), Medium (50-149 employees) and Large (150+ employees).

Companies from across the U.S. entered the rigorous two-part survey process to determine the Best Places to Work in Collections. The first part consisted of evaluating each nominated company’s workplace policies, practices, philosophy, systems and demographics. The second part consisted of an employee survey to measure the employee experience. The combined scores determined the top companies and the final ranking. Best Companies Group managed the overall registration, survey and analysis process and determined the final rankings.

“Our core values are centered around being Ridiculously Nice, developing talent, doing the right thing, having fun and working together,” Gretz said. “The employee survey portion of the evaluation process highlights the fact that our team lives these values every day, which leads to our success.”

Americollect partners with healthcare systems nationwide operating two divisions: one serving as a hospital’s customer service team providing Early Out services, and the other as a healthcare collection agency. By being Ridiculously Nice, they provide the best possible patient experience. 

Americollect Recognized as a Best Place to Work in Collections

Americollect is excited to once again be named by insideARM as one of the 2020 Best Places to Work in Collections. This is the 11th time in the last 12 years that the Ridiculously Nice team at Americollect, which was ranked top 10 in the nation for large companies (150+ employees), has been recognized.

“It’s an incredible honor to be included on this list,” said Americollect CEO Kenlyn T. Gretz. “It shows that a company that truly values culture attracts the right people, making it a Ridiculously Nice place to work.”

The program was established by insideARM, the leading independent news and information provider for the Collections industry, and is administered by Best Companies Group, which conducts over 60 local, national and industry “Best Places” programs each year.

This survey and award program was designed to identify, recognize and honor the best places of employment in the Collections industry. The Best Places to Work in Collections list is divided into three size categories: Small (15-49 employees), Medium (50-149 employees) and Large (150+ employees).

Companies from across the U.S. entered the rigorous two-part survey process to determine the Best Places to Work in Collections. The first part consisted of evaluating each nominated company’s workplace policies, practices, philosophy, systems and demographics. The second part consisted of an employee survey to measure the employee experience. The combined scores determined the top companies and the final ranking. Best Companies Group managed the overall registration, survey and analysis process and determined the final rankings.

As part of the 2020 Best Places to Work in Collections program, supplementary questions surrounding working at home during the Coronavirus pandemic were added to the list. Americollect employees answered with resounding positivity on several of the questions, including “My organization responded to the Coronavirus (COVID-19) outbreak in a way that demonstrates care for its employees’ well-being,” where Americollect had 94-percent of employees agreed. Americollect also scored high in “My organization responded to the Coronavirus (COVID-19) outbreak in a timely manner” (95%), “I have the technology necessary to do my job working from home” (93%), and “I have the technology necessary to do my job working from home” (96%).

“Our core values are centered around being Ridiculously Nice, developing talent, doing the right thing, having fun and working together,” Gretz said. “The employee survey portion of the evaluation process highlights the fact that our team lives these values every day, which leads to our success.”

Americollect partners with healthcare systems nationwide operating two divisions: one serving as a hospital’s customer service team providing Early Out services, and the other as a healthcare collection agency. By being Ridiculously Nice, they provide the best possible patient experience. 

Read the insideARM article here.

Paycheck Protection Program Deadline Extended

When the Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law on March 27, it included the Paycheck Protection Program (PPP), which was designed to help small businesses weather the COVID-19 pandemic. The popularity of the program quickly depleted available funds, leaving many businesses – including healthcare providers – looking for ways to cover their payroll.

On April 24, the Paycheck Protection Program and Health Care Enhancement Act, the second act that contained money for the PPP, was signed into law. It included $100 billion specifically for healthcare providers for expenses and lost revenue attributable to the Coronavirus outbreak. Many businesses were able to take advantage of this second wave of funds, but as the program was set to expire there were still funds available. Congress quickly passed an extension that was signed into law by President Trump on July 4, moving the final date to apply for funds to August 8.

Facilities that qualify for the PPP and have not yet applied now have more time to do just that. When the extension was signed into law, there was still more than $130 billion in allocated funds that remained unused.

According to a Revcycle Intelligence article, social assistance and healthcare providers received nearly 13-percent of the PPP loans through the end of June, or over $67.3 billion. Rules that were set in June will also help small providers with more flexibility to use funds on non-payroll expenses while easing rules on loan forgiveness and repayment timeframes.

If your facility hasn’t looked into the PPP previously, now may be the time.

Maintaining Collections During a Pandemic – Part 2

As hospitals across the country continue to battle COVID-19, the financial crunch is hitting as hard as the virus. In fact, an American Hospital Association report estimates that over the four-month period from March 1, 2020 to June 30, 2020, American hospitals and health systems will experience $202.6 billion in losses, or an average of $50.7 billion per month, due to the Coronavirus.

In the first article, we talked about some of the causes for the painful revenue losses hospitals and health systems are experiencing. From the cost of treating COVID-19 patients and increases in PPE prices to the downturn in elective surgeries and additional support some are providing their workers, it feels like hospitals and healthcare systems are being hit from all sides.

While the outlook may seem quite bleak, there are some factors that are working in favor of hospitals and health systems during the Coronavirus pandemic. Because many states have established stay at home orders or at least suggested them, people are not shopping like in the past. In fact, a report by the Visual Capitalist shows that between late February and mid-May, consumer spending was down nearly 30-percent year over year. With non-essential shopping closed, restaurants relying on takeout and delivery, and travel nearly nonexistent, people are not spending money at the same clip as they have before. While online shopping has increased, it hasn’t fully replaced going to the mall or their favorite store. This means in general, people have more of their income available for other expenses, such as past due medical bills.

Another positive factor is the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Hospitals and healthcare systems did receive $100 billion in funding, but workers who were forced on to unemployment are also receiving an additional $600 a week, which in many cases actually increased their take home pay.

A recent study by the Becker Friedman Institute for Economics at the University of Chicago found that the additional $600 a week received on top of regular unemployment insurance, known as Federal Pandemic Unemployment Compensation, has actually more than replaced lost wages for the majority of people currently unemployed. The study showed that 68-percent of unemployed people exceeded lost revenue and the median replacement rate across the nation was 134-percent. The additional unemployment compensation is currently scheduled to last through July 31, 2020.

What does this mean for hospitals and healthcare systems? It means that even though we are seeing record unemployment numbers, consumers are not necessarily feeling the negative impact that was expected to hit. Increased unemployment benefits and lower consumer spending means there is a unique opportunity to speak to patients about paying their past due medical bills.

That said, this does not mean we recommend having your collections partners double down on more aggressive collection efforts. The COVID-19 pandemic has affected everyone differently and there are patients who are unable to pay their bills, but with the majority of the workforce still on the job and a good number of the unemployed receiving benefits greater than their normal pay, it’s important to continue contacting your patients. Additionally, it is important to keep your inbound communication options strong, making it easier for patients to reach out to you with any questions or payments.

Additionally, there are steps we recommend your collections partners take to help minimize the impact health issues will have on your patients during the Coronavirus pandemic:

  • Flag Accounts – Add a notation to accounts that are suffering financially due to the Coronavirus in both your system and your collections partner(s) system. An example of this is Epic users adding a Billing Indicator to track the accounts and ensure that collection activities cease until the pandemic has subsided.
  • Credit Reporting – Have your collections partner(s) temporarily stop reporting to the credit bureaus. With so many other issues occurring surrounding this pandemic, it is not the right time to affect an individual’s credit. This will also ensure that Coronavirus-related charges do not accidentally get reported. We do not know what will happen with these charges in the future.
  • Legal Action/Garnishments – Have your collections partner(s) pause all new legal action and new wage garnishment efforts. As with credit reporting, this is simply not the right time to pursue these types of actions.
  • Insurance Check – Reviewing, identifying, and verifying that insurance was correctly applied to your patient’s accounts is another step you and your collections partners can take to help maximize your revenue. Some accounts may be payable but were not correctly covered by the insurance company. Having your collections partners help identify missing insurance and follow up on these accounts could lead to the insurance company paying, which is a major patient satisfier.
  • Explore All Avenues of Additional Reimbursement – Look for opportunities to apply for COBRA with patients who may have recently lost employment. Additionally, backdated Medicaid or disability will become a greater revenue source for hospitals.
  • Financial Assistance – More patients will qualify for financial assistance, so working to qualify these patients as efficiently as possible will be extremely beneficial. This includes Medicare patients who will also qualify for Medicare Bad Debt. 

COVID-19 has changed the way we look at our world. It is important to stay on top of local and state regulations to ensure you are staying on the right side of any new rules and laws that are put in effect. And talk to your collections partner. They should have the knowledge and expertise needed to help guide you through these ever-changing times.

 

McLaughlin Earns HFMA Certified Revenue Cycle Representative Designation

Nick McLaughlin, part of the Americollect Ridiculously Nice Sales Team, has earned his Healthcare Financial Management Association (HFMA) Certified Revenue Cycle Representative (CRCR) certification. Prior to receiving this certification, McLaughlin completed the Certified Healthcare Financial Professional (CHFP) course through HFMA and has earned the HFMA Fellowship through his financial expertise and leadership.

The HFMA CRCR certification gives holders a broad understanding of today’s revenue cycle and is the only program available that provides a national-level certification that addresses the contemporary patient-centric revenue cycle.

For Nick, the ability to understand all sides of the revenue cycle is important when working with clients.

By adding the CRCR certification to his arsenal, he is able to do that even better.

“Change is the one constant in our world,” said Nick. “The HFMA CRCR certification is an exciting addition to my knowledge base and will help me bring successful outcomes to current and future clients.”

Americollect firmly believes that everyone deserves to be treated Ridiculously Nice, all the time, no matter what. Collecting only for the healthcare industry, we utilize our Ridiculously Nice approach to open communication lines and build trust with the patient, providing the same compassionate approach that they expect from their healthcare organizations. We partner with over 130 hospitals and health systems and over 7,000 physicians to collect more money than our competition while creating an unparalleled patient experience.  

The Debate: When Will Hospital Volumes Return?

The other day when we were gathering around the virtual water cooler, the topic of hospital volumes and the impact COVID-19 has had on them came up like it has a lot lately. After a little light banter, the discussion zeroed in on when hospitals will return to normal. We imagine you have thoughts on that topic, too!

The Coronavirus has had a major impact on our healthcare systems. According to a May report from Crowe, current inpatient admissions are more than 30-percent below normal levels when compared to January 2020. Emergency room visits are down 40-percent, observation services have seen a 47-percent decline, and outpatient ancillary services and surgeries are down 62- and 71-percent respectively, in the same time period. 

As we continued to talk about when hospitals would return to even 75-percent of their previous caseloads, two voices started to rise above the others. These two had extremely different opinions, about as far apart on the spectrum as you can get, like just about everything else they start talking about. We’ll call them Mr. Optimist and Mr. Pessimist. (And yes, you know he’s a pessimist if he’s ok with being called “Mr. Pessimist.”)

Mr. Optimist and Mr. Pessimist disagreed on how soon hospitals would see an influx of patients for nonemergent/elective surgeries and other visits. Both had arguments to back up their sides and why they were right. When it comes to when hospitals will be back to 75-percent of their caseload, Mr. Optimist believes that will happen sometime in August or September. Mr. Pessimist believes it will happen in November-December, if not later. Here are just a few of their arguments:

Mr. Pessimist

1) The elderly utilize a large percentage of healthcare and they are the most at-risk. The elderly will be the last to seek non-life-threatening treatment since they are the “tough it out” generation.


2) Even when healthcare providers are allowed to begin performing elective procedures, the majority of the population will not have elective surgeries done until significant progress is made against COVID-19.

3) Common appointments like dental, vision and dermatology visits will continue to be postponed until there is herd immunity, the virus is under control, or testing is widely available.

4) With sports being canceled and people are generally out less, there will be fewer non-Coronavirus emergencies for hospitals to deal with. This will also lead to a decline in common illnesses like influenza.

Mr. Optimist

1) The elderly like to see their physician more than any other age group. Not because they’re necessarily sick, but because they want to be told they’re healthy. Those routine physician visits give them the mental confidence that they are healthy. Mr. Optimist’s mom wants to get this confidence back and he is sure others do to.

2) Pain is pain and people that have tried to hold off on surgery may not be able to do that much longer. They’ll want to reschedule as soon as possible. Plus, employers may want their furloughed employees to take care of these surgeries before coming back to work when things open up.

3) For many people, staying on top of their overall health is important. That includes dental, vision and/or things like dermatology. As soon as they can, they’ll be back to see their doctors because they believe in finding problems before they start.

4) While there may not be sports and travel causing injuries, staying at home can be just as dangerous. Cooking, honey-do lists and even trying to make a funny TikTok can cause plenty of problems!

Both Mr. Optimist and Mr. Pessimist have their arguments, but what do you think? Join our water cooler discussion and let us know in the poll below when you believe we will see hospital volumes returning to at least a 75-percent case load and why.

Americollect “gives back” to teammates by helping local businesses re-open

Americollect recently distributed over $7000 in Chamber Bucks and gift cards from locally owned restaurants to its teammates as a way to say thank you and provide a much-needed boost to local businesses.

The gesture not only helps teammates who may have experienced a hardship within their family during this time, it will also help the community as local businesses begin to reopen.

“We wanted to help our Americollect families while also supporting local businesses,” said Kenlyn Gretz, CEO of Americollect. “Use the gift card at a favorite small business in your community because they need our patronage now more than ever.”

“During this challenging time, Americollect has been fortunate enough to continue our business operations because of the work-from-home capabilities we had in place prior to the Safer at Home order,” said Shawn Gretz, Americollect President. “We can’t thank our teammates enough for the efforts they have made to keep us operating with little to no interruption.”

Americollect’s corporate office is located in Manitowoc, Wisconsin and the company employs approximately 300 people.

Shawn Gretz Earns Fellowship Designation from HFMA


Shawn Gretz, President of Americollect, has become a Fellow of the Healthcare Financial Management (FHFMA).

To be awarded the FHFMA distinction, applicants must be credentialed as a Certified Healthcare Financial Professional (CHFP); be an HFMA member for at least five years; complete a bachelor’s degree or 120 semester hours from an accredited college or university; and volunteer in HFMA or the healthcare industry. More than 1,700 HFMA members nationwide have achieved this accomplishment in the organization’s 68-year history.

Shawn has been an HFMA member since 2003, including Wisconsin Chapter President in 2016-2017 and Region 7 Regional Executive since 2017. He was recently appointed to the HFMA National Advisory Council (NAC) which began June 1, 2020. In April, Shawn also became a Certified Healthcare Financial Professional, allowing him to qualify for this coveted recognition.

“It is a bittersweet moment for me as I earn my Fellowship from HFMA. As much as I have volunteered and given to this great organization, I have received so much back,” said Shawn. “I have created friendships that will last a lifetime. I have watched and learned from great leaders of their respected organizations. And I have received world-class education on the business of healthcare.”

Earning the HFMA Fellowship attests to one’s financial expertise and leadership. HFMA Fellows act as ambassadors to the profession by raising the standard of practice through consistent participation in professional development activities and service to the healthcare finance industry.

Funding COBRA for your Patients during the COVID-19 Pandemic?

Funding COBRA for your patientsIn early May, the U.S. Department of Labor announced that the April unemployment rate reached 14.7-percent, and a Forbes article claimed that number could grow to 30-percent as a result of the ongoing health crisis. In addition to lost wages, these same people are finding themselves without health insurance during the Coronavirus pandemic, leaving them struggling to find ways to continue paying healthcare premiums through COBRA or other offerings.

This is impacting hospitals that are trying to stretch every dollar to stay solvent while dealing with COVID-19, which is not an easy task. Combine that with patients who are finding themselves newly unemployed with no insurance, the level of care can decline – but it doesn’t have to.

Some patients may be eligible for Medicare or Medicaid, which can provide some coverage, while others could qualify for plans under the Affordable Care Act (ACA). Hospitals may also bill the patient in the hopes that they elect to pay for COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage.

But what if none of these options work or the patient is unable to afford their COBRA payments? Hospitals may consider helping cover these costs through their foundation or other charity entity to ensure a higher payout from the commercial insurance company. Paying a few thousand dollars to receive several times that amount for care can be a way to stay closer to the black. An article by BLR titled, “COBRA Continuation Coverage: Who Pays?” laid out several examples where someone other than the beneficiary pays premiums, including hospitals and Medicaid. In the article, it states that,

“Although COBRA does not require that employers pay for COBRA coverage, COBRA also does not require that a qualified beneficiary actually be the one to pay for coverage–that is, someone else can pay for the qualified beneficiary’s coverage.”

This is not to say you should start paying for every person that walks through the door. To the contrary, you need to review each situation to ensure you are following the correct path. In a Linkedin article, Brent D. Magers, Executive Associate Dean, Texas Tech University HSC School of Medicine, says that,

“any provider that wishes to pay the health coverage premiums for an individual should consider the type of health care coverage, the legal structure of his or her entity that is seeking to provide such payments, applicable state laws and insurance contract terms. Finally, tax-exempt entities should also think of private benefit issues.”

He also gives further advice on having clear policies and procedures to guide the entire process while also securing the approval of legal and compliance professionals before starting this practice, so be sure to work with your legal department to avoid trouble later on.

At Americollect, we understand that a larger segment of your patients may be dealing with COBRA coverage for the first time. We reviewed our already Ridiculously Nice COBRA information and added new training for our staff designed to help first-time COBRA patients better understand their rights and how it works. By taking the time to talk with them, we hope to maximize the use of COBRA during the COVID-19 pandemic, which will positively impact your bottom line.

There are many things to consider when it comes to paying COBRA premiums for your patients, but as COVID-19 continues to impact our world, it may be worth your time to consider this option when working with patients that unexpectedly find themselves without insurance coverage.