Hospitals increase charity care with customized scoring solution

Medlytix, a national healthcare consulting firm, reported success this week in reaching a key half-billion dollar milestone - the total amount of money that its hospital clients have provided in financial assistance to more than a half-million patients nationwide by doing a better job of properly classifying charity care - in less than two years.

"We're proud that each of these hospitals enhanced their bottom lines and still were able to significantly increase their level of charity care contributions," said Medlytix CEO Arvind Krishnaswami. "This is a win-win for the hospitals and the communities that they serve."

Medlytix employs predictive sciences and a custom-scoring solution that identifies a hospital's most likely "presumptive charity-care" patients. Presumptive charity care is the process of proactively classifying patients as charity-eligible on the basis of limited financial information.

Under new federal IRS rules, hospitals are required to separate their delinquent patient accounts into two categories: charity care or bad debt. Thus, hospitals run the risk of writing off thousands of dollars from misclassified patients who may have been able to pay their medical bills if given enough time and assistance. A hospital may still pursue payment from a bad-debt account but forgoes any payment from a patient designated as charity care.

In the past, hospitals have based charity-care decisions more on intuition because of little to no financial information provided by their patients. Prompted by new regulations and increasing economic pressures, more of these hospitals are exploring independent financial scoring systems, similar to those historically used by banks and the auto industry.

While many of these systems involve generic scoring solutions developed from national population datasets, Medlytix utilizes a customized model that is much more comprehensive and accurate. Its custom scoring solution draws vital information from a combination of credit data, demographic data and internal hospital financial files.

"Our charity-care score provides a much clearer picture of patient presumptive charity because of the amount of data used to develop the model," Krishnaswami said. "Also, it is highly defensible because it is custom-built for each hospital."

A leader in global information solutions, Equifax Inc., partners with Medlytix in its healthcare division to provide effective and impactful presumptive-charity scoring solutions to hospitals today.

"Our healthcare-specific scores help medical-care providers to effectively direct patients toward the charity application process," said Dann Adams, president of Equifax Consumer Information Solutions. "The goal with Medlytix is to have a process for addressing these situations where the patients' necessary documentation is lacking. Medlytix's solution is state-of-the-art in determining presumptive charity for those patients."

In addition to its high degree of effectiveness, Medlytix's custom charity-care scoring model provides an objective, unbiased methodology that is highly defensible under an audit or review of discriminatory practices, especially when carried out on the back end of patient service.

"In fact, we recommend that hospitals use our custom methodology well into their revenue cycle, just prior to making a bad-debt classification decision," Krishnaswami said. "Numerous case studies and our own clients prove that utilizing scoring at the point of service is much less effective from a cost-benefit standpoint."

SOURCE Medlytix