MARSHALL - Bad debt is a growing problem at Fitzgibbon Hospital. It is money a hospital expects patients to pay, but never receives.
"Bad debt is defined by a patient knowing what they owe for 120 days and not setting up a payment plan, not contacting us and not paying us, and then it goes to bad debt," Fitzgibbon Hospital Chief Financial Officer Roberta Nienhueser said.
According to the hospital's IRS 990 tax forms, bad debt has increased from more than $4 million in 2009, to more than $5 million in 2010, to more than $6 million last year.
"This last year, our bad debt was like 14 percent of our revenue, which is very difficult to manage," Nienhueser said. The hospital is trying hard to identify patients who need assistance early in the process so they can at least be classified as financial assistance care rather than "bad debt," she said.
"We will allow them up to 24 months to pay it off with no interest. If they can't pay it, we ask them to fill out financial assistance forms... We try and work with them," Nienhueser said.
Fitzgibbon is far from the only hospital in the state experiencing high levels of patients unable to pay their bills. According to the Missouri Hospital Association, hospitals across the state are holding about $480 million in bad debt.
Capital Region Medical Center in Jefferson City has also seen its bad debt on the rise in the last few years. Bad debt there has increased 27 percent since 2010, Director of Patient Financial Services Debby Froebel said. Fiscal year 2010 saw $5,095,496 in bad debt. The current fiscal year is trending toward above $7 million.
Although Fitzgibbon is a not-for-profit hospital, there is only so much uncompensated care it can provide. There is no set limit on charity care, and it varies from year to year. Nienhueser estimates Fitzgibbon sees about five people in the hospital's emergency room each day who don't have insurance. The ER is also the most expensive area of care the hospital provides.
"When [patients come into the emergency room] for care, their condition is so much worse than it would have been had they gotten regular primary care or maintenance on a chronic condition," MHA spokesman Dave Dillon said. "The costs are just very, very high."
Fulton resident Missy Taylor said she has gone to the emergency room on several occasions because she does not have insurance coverage. She and her husband run an invisible fence business out of their house.
"I'm not employed, so therefore I don't have any insurance whatsoever," Taylor said. "I had back surgery and knee surgery last year." Taylor said her medical bills are stacking up, and she needs insurance coverage.
Having insurance does not always mean patients can pay their bills. Fitzgibbon's Neinhueser said high-deductible insurance plans have played an increasing role in bad debt growth.
With some plans requiring patients to pay the first $5,000 of a medical bill, for many, there is little difference in not having any insurance at all.
Froebel said CRMC has also been tracking bad debt write-offs. "We see that it is growing in the people who owe co-pays and balances after insurance faster than true uninsured," Froebel said. "Those who have insurance basically due to increased higher deductibles and co-insurance owe this."
There is hope that the Patient Protection and Affordable Care Act, also known as Obamacare, will provide another option for people who do not have employer-provided insurance. It would establish state-run exchanges where people could shop for more affordable insurance plans. Plans would vary by the amount of coverage required:
• Bronze policy: 60 percent coverage
• Silver policy: 70 percent coverage
• Gold policy: 80 percent coverage
• Platinum policy: 90 percent coverage
The Silver policy would be the benchmark policy in most states, meaning the one most people will choose.
Dillon said the MHA is not sure what will happen when the ACA goes into effect. "The Affordable Care Act is not fully implemented... Most of the provisions that relate to insurance will probably kick in in 2014," Dillon said.
Fitzgibbon Hospital also said the act's effect will depend on future health insurance exchange rates. More insurance coverage could mean fewer bad debts, but more individual coverage under the act might not mean only good things for the hospital.
"We'll be expected to do more for more people with less money is our expectation," Nienhueser said. "Hopefully, we're wrong."