OHH Promotes Traditional Medicare As Losses Mount
Olney Hamilton Hospital officials are stepping up efforts to persuade Medicare patients to reconsider Medicare Advantage plans as the hospital works to reverse operating losses and improve collections.
Interim Administrator Stasha Siegert told the OHH board of directors on Sept. 25 that the hospital posted an operating loss of $256,000 in August, bringing its year-todate operating loss to just over $2 million. The hospital recorded a net loss of $299,000 for the month and a year-to-date net loss of about $1.9 million.
At the same time, patient activity is growing. Gross patient revenue for the first half of the fiscal year reached $34.3 million, an increase of $2.7 million, or 8 percent, over the same period last year. But deductions from revenue increased by about $3.3 million, or 16 percent, leaving net patient service revenue about $364,000 below the same period last year.
Hospital officials said improving collections and reducing contractual adjustments are among their biggest financial priorities.
Ms. Siegert said one focus is Medicare Advantage, the privately administered alternative to traditional Medicare. OHH is a critical access hospital, and traditional Medicare reimbursement plays an important role in the hospital’s finances.
Traditional Medicare patients accounted for 41.7 percent of the hospital’s Medicare business this year, compared with 41.3 percent last year, Ms. Siegert said. Although the increase is only four-tenths of a percentage point, she said the difference can become significant when applied to millions of dollars in patient revenue.
“A lot of my focus right now is turning that curve on Advantage,” Ms. Siegert told the board.
The hospital is also encouraging Medicare Advantage patients who want to return to traditional Medicare to get help understanding their options. Ms. Siegert said a hospital employee works individually with Medicare Advantage patients who are interested in making the change. Even converting one patient a month back to traditional Medicare helps the hospital financially, she said.
Ms. Siegert said Medicare Advantage also creates billing complications when patients do not realize their coverage has changed. Some patients continue presenting their Medicare cards after enrolling in an Advantage plan, she said. The hospital may initially bill traditional Medicare only to discover that the patient is enrolled in Medicare Advantage and that the treatment may have required prior authorization.
By the time the claim is rejected, she said, it can be too late to obtain that authorization, potentially affecting how much OHH is paid.
OHH is installing a new electronic insurance- verification system that is expected to go fully live in October. The system can identify a patient’s actual coverage at the time of service and can also search for insurance coverage among patients initially listed as self-pay.
Ms. Siegert said an early test already found insurance coverage for five of 12 patients who had been listed as selfpay.
Hospital officials are also working to submit cleaner claims more quickly, noting that older accounts become increasingly difficult to collect. Board President Dale Lovett said even correctly filed insurance claims can face delays or denials, making accurate and timely filing critical.
Despite the financial pressures, Ms. Siegert said several operating indicators are moving in the right direction. Admissions are up 6 percent, the hospital’s average daily census was 9.3 patients in August, emergency room visits have begun increasing, and X-ray and MRI use is also growing.
The hospital’s Facebook page and website are currently prominently directing visitors to information headed “Get the Facts Before Committing to Medicare Advantage.”