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Managing Uncompensated Care With A Strategic RCM Partnership

Managing Uncompensated Care With a Strategic RCM Partnership

What are you doing to ensure all your patients have access to the best financial care? Are some populations inadvertently being left out? Review this infographic with your colleagues and start a conversation about what your team can do to prevent patients falling through the cracks of your eligibility program and manage your uncompensated care.

infographic on uncompensated care

What is Uncompensated Care – and Why is it a Problem for Hospitals?

Uncompensated care consists of services provided by a hospital or clinic that does not have a direct payment source.  Unfortunately, hospitals are often unequipped to efficiently and effectively manage accounts of all types – denied, uncooperative, or homeless patients; patients whose situation has changed; high-volume outpatients not being captured; family accounts; and more – without significant revenue leakage.

AHA data shows that uncompensated care represents a significant portion of hospital operating expenses – 4.2 percent of total expenses.

Pressure from shrinking margins and growing scrutiny over reimbursements are weighing heavily on financial leaders everywhere in the healthcare industry. Meanwhile, patients of all kinds are requiring greater financial assistance than ever before, exacerbating the problems with uncompensated care that many hospitals are facing.

Uncompensated Care Statistics to Know

  • $620 Billion in Revenue Has Been Lost From Uncompensated Care
    • Research from the American Hospital Association (AHA) shows that from 2000-2017, hospitals of all types have provided $620 billion in uncompensated care to their patients. Based on cost, uncompensated care increased by 73% during that same period.
  • 31% of Hospitals Have Negative Operating Margins
    • Continued cost pressure, particularly for labor and drugs, have compounded operating challenges faced by acute-care providers
  • Managing Uncompensated Care Gives Hospitals The Opportunity to Increase Operating Margins by 57%
    • Uncompensated care represents a significant portion of hospital operating expenses – 4.2% of total expenses. Better management of those costs could boost aggregate operating margins from 7.4% up to 11.6%.

How RCM Partnerships Can Help You Manage Uncompensated Care

Hospitals are often unequipped to efficiently and effectively manage accounts of all types – denied, uncooperative, or homeless patients; patients whose situation has changed; high-volume outpatients not being captured; family accounts; and more – without significant revenue leakage.

With so much at stake, it’s more important than ever for hospitals to ensure they’re capturing maximum dollars from all patients – even the difficult populations prone to slipping through the cracks of eligibility programs and ending up written off as bad debt. With the right plan (and strategic partner) in place, hospitals can avoid the growing problem of uncompensated care – and stop revenue leakage by looking for secondary sources of eligibility.

Developing strategic partnerships with revenue cycle management vendors who can help balance multiple constituents – providers, payers, and especially patients – could be the key to successfully managing uninsured and under-insured populations. In addition to revenue cycle management expertise, external partnerships can also provide experienced patient advocates with the time and persistence to guide patients through the eligibility process.

AHA data shows that uncompensated care represents a significant portion of hospital operating expenses – 4.2 percent of total expenses. Better management of those costs could boost aggregate operating margins from 7.4 percent up to 11.6 percent. That means a hospital has the potential to increase its operating margin by 57 percent.

 

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Tom Robinette

Tom is Content Marketing Manager, producing and overseeing the content delivered for all MedData service lines. Tom is an experienced journalist and marketing professional. He is a graduate of Kent State University's nationally accredited School of Journalism and Mass Communication.

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