The Overlooked Obamacare Sales Force: Hospitals

September 13, 2013

As community groups, brokers and insurers prepare to recruit members for medical plans that go on sale in October under the health law, nobody has a bigger financial stake in their success than hospitals.

And few may work harder to sign consumers up for the Obamacare insurance marketplaces than hospitals themselves.

“This is a major project for the next year,” said Craig Cooper, spokesman for Genesis Health System of Iowa, which hopes to enroll thousands of patients and substantially cut its $60 million annual bill for people who can’t afford to pay for care. “It’s important to [the CEO] and it’s important to our organization.”

Hospitals are setting up phone hotlines and planning visits to churches, child-care centers and soup kitchens to sign people up for coverage.  Like Genesis, some hospital systems received federal grants to train enrollment “navigators.”

Others are paying contractors to enroll consumers and identifying patients with high unpaid bills to make sure they’re covered for future care.

“Virtually everybody is asking for brochures and card tents that they can use in their various delivery sites — not just the hospital,” said Ellen Pryga, director of policy at the American Hospital Association. “Some of them are going to do a lot of community outreach. They’ll go to local community meetings. Some of them are likely to help out at health fairs.”

The Affordable Care Act creates online marketplaces known as exchanges where those lacking medical coverage can buy subsidized insurance.  Helping consumers buy health plans on the exchanges will differ substantially from the Medicaid enrollment hospitals and their contractors are used to.

Medicaid, the government program for the poor and disabled, allows enrollment and reimbursement for care even after it has been delivered. This will be true for people newly eligible for Medicaid, too, in the states that expand the program under the health law. But private plans sold through the exchanges won’t pay hospital bills unless patients are members upon admission.

“Hospitals are now starting to focus on outreach programs to individuals who are [frequently admitted] and try to get them signed up for insurance, so when they do present to the hospital, they are covered,” said Jeff Silverman, a vice president at  Emdeon Inc., whose business includes helping hundreds of hospitals and academic medical centers manage revenue.

Vanguard Health Systems, a for-profit hospital chain based in Nashville, hired Emdeon’s Chamberlin Edmonds division to help enroll probable Vanguard patients in the exchanges.

“We have data in our own systems to know who has come into our emergency rooms and what zip codes they live in that might be exchange eligible,” Keith Pitts, Vanguard’s vice chairman, told financial analysts in June.

Tenet Healthcare, another for-profit hospital chain that agreed in June to buy Vanguard, owns its own patient-enrollment and hospital-revenue consultancy, Conifer Health Solutions.  Working with Conifer, Tenet expects to have at least one insurance application counselor certified under ACA rules in each of its 49 hospitals, a company executive told stock analysts in early August.

Tenet declined to comment further. Vanguard did not respond to requests for interviews.

Mining patient records to get frequent customers covered is “clearly legal” for hospitals or their contractors under health privacy laws, said Mark Rothstein, director of the Institute for Bioethics, Health Policy and Law at the University of Louisville. “They are encouraging their patients who might well have financial problems to avail themselves of the health insurance exchanges so they can get access to government subsidized insurance.”

Health-law advocates welcome the effort. Given a short enrollment timetable, limited training dollars and active opposition from Republicans, they say, the more organizations involved in exchange signup, the better.

But with billions in revenue on the line, some worry hospitals could point consumers toward the insurance that’s best for the hospital, not necessarily the patient.

“It’s the tug between the concern that hospitals are going to steer people toward whichever plan might give them the best rates and getting all hands on deck to get people enrolled,” said Laurie Sobel, an attorney for Consumers Union. Among those promoting enrollment, she said, “it’s very hard for people to tell the difference between who has a conflict and who doesn’t.”

Insurance sold through health-law marketplaces cannot discriminate against those with preexisting illness and must cover certain procedures and have a minimum financial value. Nevertheless the plans are expected to vary widely in cost sharing for patients, reimbursement paid to hospitals and the size of caregiver networks.

With hospitals motivated to enroll the sickest and most expensive patients, insurers are eager to see healthier consumers sign up, too.   

“There is broad agreement that for the new marketplaces to work, there needs to be broad participation, particularly among young and healthy people,” said Robert Zirkelbach, spokesman for America’s Health Insurance Plans, an industry group.

Some patient advocates are less than comfortable with hospitals hiring contractors to help exchange members enroll.

“This is a very big business. Some of them actually get paid for a percentage of the costs they recover on behalf of the hospital,” said David Roos, executive director of Covering Kids & Families of Indiana, a nonprofit that promotes enrollment in government programs. Sometimes for Indiana Medicaid signups, he said, “the for-profit vendors were more interested in their bottom line than in making sure everybody had equal access to enrollment services.”

Along with a few hospital systems and dozens of nonprofit groups, several for-profit hospital contractors won federal grants in August to enroll exchange members.

One, DECO Recovery Management, got a $1.2 million navigator award to recruit South Carolinians into the exchanges. Concerned that its hospital business could conflict with the navigator job, DECO decided not to seek South Carolina hospitals as exchange-enrollment clients, said vice president Andy Foland.

“Putting us in a situation where we’re also getting paid by the hospital for that creates a huge mess,” he said. DECO plans to recruit exchange members for hospitals in states where it didn’t get federal navigator dollars.

Other potential concerns are enrolling patients who aren’t eligible for coverage or the kind of aggressive approach allegedly taken by Accretive Health, another hospital contractor.

Last year Accretive paid a $2.5 million settlement and agreed to cease business in Minnesota after Lori Swanson, the attorney general there, alleged that company employees approached sick patients in the emergency room to collect hospital debts. Accretive declined to comment on its plans, if any, to enroll exchange patients.

Industry officials said they would abide by strict rules in advising consumers on plan enrollment.

“We must always act in the patient’s best interest,” said Gwynne Mesimer, vice president of operations for Chamberlin Edmonds.

“It’s very important that you not make the decision for them,” said the AHA’s Pryga.

Consumer advocates promise to pay attention.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communications organization not affiliated with Kaiser Permanente.

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