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Safety Net Hospitals Brace for Medicaid Expansion

Rene Letourneau, for HealthLeaders Media, January 13, 2014

While treating more patients that have coverage through the exchange or Medicaid sounds good in theory, Burnette says it is also a potential financial hazard, because these newly covered individuals may now be responsible for out-of-pocket expenses that they can't afford.

A New Source of Bad Debt
"For safety net providers, there is a concern about the impact on bad debt… At the end of the day, it may be that [patients] have an out-of-pocket that they can't pay. In the past, that would have counted toward our disproportionate care, but that is no longer the case because they are counted as being insured. That is bad debt now that the hospital is going to have to pick up," Burnette says.

To mitigate its bad debt risk, Denver Health has a financial counseling program through which it educates patients about their liability and works to find payment solutions.

"When we identify someone with a high-deductible plan, we look at how upfront payments can be structured. Is there an amount that can be paid in advance? We are working with that patient from day one. We also do a lot of checking on our own to see if that patient has any benefits that they are not aware of. We make sure we completely understand what their benefits are," Burnette says.

Additionally, Denver Health has a program dedicated to educating its community about the financial implications of health reform.

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