Parkland Renames, Expands Charity Care Program

The giant safety-net hospital responds to healthcare reform, high-deductible health plans, and concerns about equity by rebranding and expanding its charity care program.

Like many provider organizations, Parkland Health & Hospital System—the famed 968-bed, safety-net institution based in Dallas—has seen an increase in patients with high-deductible health plans over the past year.

As more patients purchase coverage through health insurance exchanges to comply with the Patient Protection and Affordable Care Act's individual mandate, the system's leadership expects that trend to continue in 2015 and beyond, says H. Gene Lawson, Parkland's senior vice president, revenue cycle.

"Thousands of people signed up for ACA plans in the first year. These are poor people who a year ago got charity care. Now they have insurance plans with very high deductibles and out-of-pocket costs, and that number will increase because a lot more people signed up this year for those plans," he says.

Making charity care more inclusive

To keep pace with this shifting financial landscape, Parkland recently announced that it is rebranding and expanding its existing charity care program to include a broader spectrum of patients. As of March 1, the system is replacing its Parkland HEALTHplus charity care program with the Parkland Financial Assistance program.

The reason for the change is threefold, Lawson says: to clarify what the program offers, to help more patients meet their financial obligations to the hospital, and to prevent patients from avoiding necessary medical care.

"The name Parkland HEALTHplus was misleading for some people because it sounded like a health plan. Some people weren't applying for ACA plans because they thought they already had an insurance plan so we needed to address that," Lawson says.

Additionally, Parkland wanted to provide some assistance to low-income patients who do have a health plan but still struggle to pay their bills. The new program has been overhauled to include more patients.

"We revamped the plan to include people who are at 200% of the federal poverty level. We don't write off their copays or deductibles, but we do take it down to a level that is based on their income and their ability to pay," Lawson says, noting that the new policy is also designed to make Parkland's charity care more equitable.

"With the introduction of the ACA marketplace plans a year ago, we realized we had some inequities in our charity care policies. We gave millions of dollars in charity care to undocumented people, but if you are legal, you had to purchase insurance and could no longer qualify for free care. What we are really doing is being consistent in our charity guidelines so that we are only charging people what they can afford to pay," he says.

Increasing access to care

Another motivation for the expansion of the charity care program is that Parkland's leaders were concerned patients would forgo care out of worries over paying out-of-pocket for medical bills.

"We were afraid that patients would not seek care because they are worried about that large expense. Our CEO is a physician, and one of his big concerns is that patients with high out-of-pocket costs will delay getting care because they can't afford it. We can't let that happen. Patients are what we are all about. They are why we are all here," he says.

"One of the things I sincerely believe is that this will help people who would otherwise delay care until they end up in the emergency room. Many times what could have been a minor condition ends up being an emergency because people don't get the care they need."

Improving the bottom line

Because Parkland is a public safety-net hospital, about 80% of its accounts receivable are charity, self-pay, and Medicaid accounts. And while it can be difficult to collect from this low-income population, Lawson says the hospital is helped by having more patients with health coverage, even if it is through high-deductible plans.

"It's difficult to collect because if you are at 200% of the federal poverty level and are paying premiums for the first time, you probably don't have much [money] to be able to pay. But, a year ago, they were charity care so we didn't get paid anything. Now with the ACA plans, we are getting paid something. I'd much rather have something than nothing."

Lawson adds that although Parkland provides emergency care whether or not a person has the ability to pay, the hospital may take a harder stance on other procedures as a way of protecting revenue.

"If it's an emergency, we are going to see them regardless, but if they don't pay their part of the copays and deductibles, elective procedures may not be scheduled."

Meeting the mission

With its new charity care plan, Parkland has shown that it is willing to adapt to outside forces, Lawson says, such as reform legislation that is creating changes for healthcare consumers.

This kind of flexibility is critical to the system's long-term financial success, he says. "A huge amount of manpower at Parkland was put into developing all of this and trying to be as fair as possible to everyone. We jokingly say our policies are written in pencil because if the external world changes, then we have to change our approach. Our mission must continue, so we have to find ways to keep our doors open."