If you cant beat it, profit from it. Thats what Nashville-based HCA has been doing with self-pay patient accounts by way of a subsidiary, National Patient Accounts Services. Based in Louisville, Ky., NPAS (commonly pronounced EN-pass) is an outsourcing company that primarily exists to manage and collect on patient accounts in the first 90 to 120 days after patients leave a hospital.
Several hospitals do this work on their own in centralized efforts, and HCA appears to be the only hospital selling its services in that arena to others, although Tenet Healthcare Corp. executives have considered this strategy as well.
For HCA, the idea is to use its collection expertise to allow other hospitals to focus on what they do best. The other hospital systems want to focus more on patient care instead of back office, so thats where their money is going, said Curtis Warfield, NPAS chief executive officer.
The so-called early-out accounts that NPAS is targeting are not considered bad debt, at least not at the point that NPAS handles them, Warfield said. Currently, about 10% of NPAS business involves handling these accounts for hospitals that are not part of HCA. The subsidiary began marketing its services in early 2006.
At a time when hospitals are clamoring for relief from the burden of self-pay accounts, finding a way to earn income from handling those accounts for other hospitals is either ironic or ingenious, depending on your point of view.
Whatever privately held HCA makes from NPAS external business is small potatoes compared with its bad-debt write-offs. The subsidiary handles about $5.3 billion in accounts receivable, including both uninsured patients and the copayments and deductibles owed by insured patients, Warfield said. HCA does not provide financial results for NPAS, but Warfield said it earns a percentage of what is collected from the external, or non-HCA, accountsabout 10% of the $5.3 billion total. Industrywide, self-pay collection rates vary from about 10% of the billed amount for uninsured patients to 30% to 60% for copays, deductibles and other patient financial responsibilities. For the nine months ended Sept. 30, HCA reported $2.22 billion in bad-debt expense.