In 2006, almost 5,000 hospitals across the United States provided $31.2 billion in care they were never paid for. According to the American Hospital Association, the majority of that total came from taking care of charity cases or taking losses from assistance programs.
Think about your employer, the business you work for, or any company for that matter. With losses like that, how long would they stay in business? That's one reason why almost 20% of hospitals have begun checking patients' credit scores before they are admitted.
The question on patients' minds is whether they will be denied care if their credit score is too low.
What is a Credit Score?
If you are unfamiliar with how credit scores work, here are the basics: When you use credit, whether it's a credit card, an auto loan, a mortgage, or even an overdraft protection on your bank account, then your track record for payment and adherence to the payback agreement you made gets recorded by several different credit score companies such as Equifax and Transunion. Then, they apply formulas to the plusses and minuses of your track record and arrive at a score. A high score (800+) is an indicator that your credit track record is very good. A low score (below 725) is an indicator that your track record is not very good.
How Will Hospitals Use Credit Scores?
Because many hospitals are mandated to provide care, most claim they will not use credit scores to determine who will get treated, or not treated. Instead, they will use credit scores to determine who can or can't pay, and therefore which people to put pressure on when bills come due.
According to Karen Godfrey, a revenue manager at Baptist Health South Florida, hospitals are looking at the scores like this:
- Patients who have the highest scores will likely pay without being pressured. Therefore, the hospital won't have to commit its personnel to making phone calls and writing letters to pressure them, nor will they have to spend the money to turn over these people's slow payments to a collections agency.
- Patients who have the lowest scores probably can't afford the care anyway. Therefore, the hospital won't commit its resources to chasing them down, either. It would be a futile effort.
- Patients who have the scores in the middle are worth the chase. So for those patients, the hospital will commit personnel and energy to apply pressure to get bills paid.
Should Patients Be Concerned?
Organizations can't stay in business if they don't make enough money to support their mission. Therefore, as consumers, we should be able to understand why hospitals would begin looking at credit scores and financial information to help them slow down their income losses.
Consumer groups are concerned that hospitals will misuse the information by denying care or even reducing the amount of care a patient receives, such as discharging a patient early. They also point out that some hospitals might review a patient's potential for tapping home equity or lines of credit, then suggest the patient use those resources to make payments toward hospital bills.
What Should Patients Do About Hospitals' Access to Financial Information?
If you are concerned about whether a hospital should have your credit score, or access to your financial records, make sure you carefully review any papers you are asked to sign. According to the Federal Trade Commission, any organization, including a hospital, needs your permission to obtain information about your credit. Don't sign any credit requests if you are uncomfortable.
Depending on the hospital, you may forfeit care if you choose not to sign credit score requests. It is unclear whether this can happen. If the hospital is a private hospital, it has more rights that regard a patient's ability to pay than a public hospital does.
If you are not sure what your credit score may be and you are concerned it could raise question marks, then you can learn more about obtaining that score from the About.com Guide to Credit.
If you have questions about your finances and an upcoming need for hospital services, you may want to check with the hospital's admissions department prior to your admission date to ask about what papers will need signatures. That will help you make decisions about your upcoming hospital experience and whether your financial situation will negatively affect it.
Finally, regardless of whether a hospital uses your credit and financial information or not, be advised that your medical and payment records will be provided to the Medical Information Bureau (MIB) if the MIB makes such a request. Those requests are not used for care determinations; rather for making decisions about health or life insurance for those who apply for coverage.
Sources:
Rubenstein, Sarah, Why Hospitals Want Your Credit Report The New York Times Page D1 08 March 18.
Irby, LaToya, About.com Guide to Credit What Your Credit Score is Made Of.
