Upmc's Bad Debt: A Case Study

The University of Pittsburg Medical Center (UPMC) has taken a unique approach to improving revenue and reducing bad debt. By taking “a proactive, patient-friendly approach to communicating with patients about their financial responsibility through an integrated revenue cycle model,” UPMC has increased patient payments from an average of $16 million per month in 2012 to an average of $20 million per month since March 2013 (Langford, 2013, p. 88). Additionally, UPMC has been able to “significantly reduced bad debt and enhanced patient relationships through greater financial advocacy” (Langford, 2013, p. 88). In the fiscal year of 2009, UPMC’s bad debt accounted for 52% of UPMC’s uncompensated care, and as of 2013, the bad debt accounts for 24%

(Langford, 2013, p.88). In addition to creating the patient financial services center, UPMC made identifying uninsured and underinsured patients earlier in the healthcare process a priority (Langford, 2013). The identification process “required integrating financial advocacy and counseling across the continuum of care” starting with scheduling agents who verify insurance eligibility and provide referrals to the patient financial services centers to be evaluated for medical assistance programs (Langford, 2013). During pre-arrival, “revenue cycle staff use a web-based eligibility tool developed in-house to verify insurance coverage, non-covered services, benefit maximums, benefit limitations, patient responsibility, and procedures requiring authorization,” then on the day of service, agents conduct additional brief financial assessments for patients and schedule follow-up calls with financial counselors in the customer services department (Langford, 2013, p. 89). These new processes as well as the post-service interactions have resulted in the hospital revenue cycle receiving “payments from 70 percent of its high-propensity accounts and 58 percent of its medium-propensity

Ultimately, with the ever changing environment of healthcare, it is the responsibility of health systems to “proactively inform patients about their financial responsibility for care and services received and seek out tools that enable a better patient experience” in an effort to meet the needs of their patients (Langford,