Publication: Healthcare Financial Management
Date published:
Language: English
PMID: 17804
ISSN: 07350732
Journal code: HFM

Despite strong overall financial performance, Intermountain Healthcare, a Salt Lake City-based regional health system, had seen its uncompensated care double, from $128 million in ???3 to $255 million in 2007, with growth in bad debt outpacing charity care.

With uncompensated care levels continuing to rise, the system faced additional challenges that threatened to exacerbate the problem, including the increasing shift of healthcare costs by employers to employees (patients) and some concern from the community regarding Intermountain' s collection processes. All of these issues were a challenge to one of Intermountain's core missions: providing excellent health care to the residents of the region regardless of their ability to pay.

A 2007 analysis of the system's bad debt found that:

* Uninsured patients made up 59 percent of the bad debt

* Patient balances after insurance accounted for the other 41 percent

* A majority of the high- dollar bad-debt patients did not apply for Medicaid or Intermountain's financial assistance

* 52 percent of its bad-debt cases were treated in the emergency department

* 48 percent of the bad-debt cases had been scheduled to receive services

* Many patients had previous bad debt with Intermountain

Many physicians believed the system attracted no -pay patients who were driving up the level of bad debt for both the system and physicians. Lack of legal follow-up on unpaid bills caused some patients to perceive that there were no "teeth" in Intermountain's follow-up processes. And Intermountain's culture generally did not support asking patients for payment prior to service.

Intermountain leaders decided that a fundamental redesign of how the system interacted with patients, from a financial perspective, was necessary.

Oversight and Goals

Intermountain partnered with a consultant to design a new approach that would help create a culture of responsibility for the cost of health care for both recipients and providers, while integrating Intermountain's mission and core principles.

To begin, Intermountain convened a group of senior system leaders and key members of the revenue cycle team. This group identified the following goals for the initiative:

* Improve the patient experience in registration, admissions, discharge and collections, and ensure fair and consistent processes for all stakeholders

* Enhance compliance with Intermountain's charity care policy by clearly communicating the policy and offering comprehensive financial assistance and affordable financing options

* Ensure that patients who are able to pay do pay their fair share, thereby helping to make health care as affordable as possible for all payers

To meet these goals, the group developed an initial framework for a set of new processes, under what the group called the Financial Assistance and Improved Registration (FAIR) initiative.

A steering committee for the initiative was identified, composed of system leaders and key staff members from each of the system's departments, including nursing and physician leaders. Intermountain's executive leadership on the committee comprised the president and CEO, the CFO, the senior vice president of operations, the senior vice president of strategy, the vice presidents of clinical operations and communications, and key regional leaders.

Having this broad, interdisciplinary group involved in the formation of FAIR processes proved to be key to staff engagement and adoption throughout the implementations. For example, Intermountain needed to create a process for identifying which patients could wait for treatment until they could be connected with financial sponsorship. Members of the committee would share their perspectives and ideas, and the group would come to a consensus on the best approach.

The FAIR Approach

The FAIR approach groups patients into two categories: nonurgent or urgent scheduled patients and urgent or emergent patients who access care through the emergency department (ED). A key goal of the FAIR processes was that no urgent or emergent clinical process would be slowed, changed, or impeded.

FAIR approach for nonurgent patients. The FAIR approach for nonurgent patients with scheduled services involves:

* Establishing a scheduling data set to ensure that basic financial data, such as insurance name and policy number, were captured

* Evaluating the financial risk associated with accounts, including whether patients were uninsured or had high liability with their insurance, had failed to pay for previous care and service, or required authorization from their insurance carrier before receiving certain services

* Minimizing risk by linking patients with financial assistance, collecting deposits or previous bad debt, and obtaining required authorization from insurers before care was delivered

* Rescheduling patients, if necessary and appropriate, to allow them time to complete FAIR requirements

For nonurgent patients with insurance, the FAIR approach requires fully verifying coverage, estimating patient responsibility for payment and deductibles, and collecting appropriate payments and/or ensuring satisfactory payment arrangements are in place prior to service.

For nonurgent uninsured patients, the FAIR approach requires offering patients discounts, making sure patients complete Medicaid or other applications for financial assistance, and encouraging patients to make appropriate payments and/or satisfactory payment arrangements prior to service.

FAIR approach for urgent or emergent patients. For urgent or emergent patients accessing care through the ED, the FAIR approach requires:

* Engaging patients in financial discussions at the time of service

* Using automated, real-time insurance verification to ensure accuracy in discussions with patients who already had financial sponsorship for their care

* Estimating patient financial responsibility, and coUecting payments at the time of service or making payment arrangements

* For patients without financial sponsorship, discussing eligibility for and steps involved in obtaining coverage before these patients leave the emergency department

* Ensuring that patients apply for Medicaid and/or financial assistance if they are unable to pay

For patients who are treated and released from the ED, the FAIR processes occur in the treatment room and at a checkout desk within the ED. For patients admitted to a hospital, these processes begin in the treatment room, but continue with a financial counselor in the inpatient setting.

Gathering Community Input

A month before the first pilot, Intermountain reached out to its four regional community financial services advisory councils, requesting meetings with each. Formed in 2005 to provide input on Intermountain's financial assistance policies, each of the councils is composed of representatives from large and small business, community advocates, and legislators.

To prepare for the meetings, Intermountain sent the councils information about the FAIR initiative, along with key questions for discussion, including:

* "How would you feel if Intermountain were to require patients not deemed urgent by a physician to complete a charity application before they could receive treatment?"

* "How would you feel if Intermountain were to offer self -pay patients discounts?"

Feedback from each of the groups was constructive, positive, and supportive of the FAIR approach.

Communication Channels Before and During the Project

Three months before the first pilot implementation, Intermountain began communicating about the FAIR initiative both internally and externally to key stakeholder groups. (For subsequent implementations, communications began one to two months prior to project start.)

The core message Intermountain communicated was that the project would improve the patient experience by ensuring that each patient who needed financial sponsorship would receive help in securing it, and that doing so would help ease the financial burden of health care for all patients. Intermountain made sure to underscore that this project was closely tied with the system's values.

Internally, Intermountain published a series of articles in each of its regional newsletters, starting with overview articles on the concept of FAIR, and getting more specific as the pilot projects got under way, and the processes became more defined. Once the pilot projects began yielding success stories, Intermountain leveraged those positive experiences by publishing stories from both patient and staff perspectives.

In addition, open-house-style meetings were held with physician offices to share the vision for the initiative, and to inform staff of the new policies and procedures it would require. Senior Intermountain executives also met with the system's regional boards and physician boards periodically throughout the project to share progress and success stories.

Externally, Intermountain executives spoke with leadership at community clinics and select members of the news media to make them aware of the new approach.

Staff Training and Engagement

Intermountain kicked off the FAIR initiative by conducting two six-month pilots at two hospitals-one focusing on patients receiving scheduled services, and the other on patients who came to the ED. Ultimately, the FAIR approach was piloted and implemented at two hospitals, from May 3008 to March 2009.

Beginning approximately one week prior to the start of each pilot, each staff member, both clinical and financial, received extensive group and one-on-one training on FAIR processes, and began the process of internalizing the new ways the new approach required them to interact with patients. Consultants observed workflow and processes with an objective perspective, identified where improvements could be made, and then held staff accountable for those modifications.

As the pilots progressed, staff quickly began to see the benefits of the FAIR approach. Many patients were relieved to understand up front what the cost of their treatment was going to be, and were grateful to have help applying for financial sponsorship when appropriate. In addition, the measurable benefits and increased amount of cash collections were encouraging.

These positive patient stories, along with improving financial metrics were shared throughout the organization in Intermountain's newsletters, at steering committee meetings, and at board presentations, which helped further motivate staff to adopt and embed FAIR processes, while creating excitement about the project start at other hospitals in the system.

Implementation and Metrics

All FAIR processes are systematic and thoroughly documented to ensure a consistent experience for both staff and patients. Intermountain personnel received extensive training, support, and feedback through audits to ensure FAIR processes became embedded into daily operations. Patient account services personnel were trained to promote patient friendly interactions and to educate patients on their financial responsibilities and financial options. Preregistration and registration staff were trained to ask patients for deposits and to explain financial assistance requirements.

In addition, the team established metrics to benchmark FAIR processes and monitor process performance. Metrics and performance are reviewed at weekly and monthly meetings to track the effectiveness of the solution and its results. Key metrics include:

* The percentage of scheduled patients who are financially compliant

* The extent to which financial responsibility is resolved before scheduled patients receive care

* The volume of uninsured accounts that are screened in the ED

* The amounts that patient account services representatives collect up front

Improved communications between financial and clinical staff, as well as clearer procedures and information system enhancements, encouraged their collaboration in rescheduling nonurgent services to allow patients to participate in Medicaid or Intermountain's charity care program. This collaboration often resulted in increased teamwork on other initiatives as weU.


As noted previously, the two pilots of the FAIR approach were conducted from May 2008 through March 2009. During this time, substantial improvements were noted (to view a report showing some of the findings of the pilot initiatives, go to

For nonurgent, scheduled patients, these improvements included:

* A $57,000 increase in monthly cash due to improved Medicaid links

* A 4 percent improvement in overall patient payments

* An 11 percent decrease in bad-debt expense

* A 40 percent increase in charity care approved

For urgent or emergent patients accessing care through the ED, improvements included:

* A $56,000 increase in monthly cash due to improved Medicaid linkages

* A56 percent improvement in point-of-service patient cash collected

* A 2 percent decrease in bad-debt expense

* A 110 percent increase in charity care approved

Post-implementation audits have reinforced the importance of consistently following FAIR processes across hospitals to ensure the same outcomes. Sharing patient stories with front-line staff also has helped them understand the positive impact of the FAIR processes on the communities Intermountain serves and has reinforced their commitment to implementing these processes across the system.

A full-time dedicated team from Intermountain, including managers and supervisors from Intermountain's patient access, patient account services, and central training departments, worked side-by-side with the consultants throughout the pilots and early implementations. This internal team will roll the FAIR approach out to all remaining Intermountain hospitals by the end of 2012.

Lessons Learned

One reason that the FAIR approach has been successful is that it was built on the strong foundation of a solid revenue cycle. Intermountain had already worked with a consultant to ensure the efficiency of the revenue cycle processes before working to implement the approach, and without this strong foundation, implementing the approach would have been difficult.

Because the FAIR project required embedding new work processes and culture change, it required not only time and devoted resources to implement, but also a clear, consistent, and continuing commitment from top leadership. It has also been important throughout the process to continually communicate the ways that the FAIR project supports Intermountain's values and mission.

Another key to the ongoing success of the project will be for staff to consistently implement FAIR processes. Achieving such consistency can be a challenge in an organization as large as Intermountain, but one worth undertaking. In an analysis of the bad- debt accounts from the hospitals where the FAIR appraoch has been implemented, the majority of bad debt could be traced to FAIR processes not being followed.

The Real Bottom Line

Beyond increased revenue, the FAIR initiative addressed the root causes of Intermountain's rise in uncompensated care. Intermountain now has a way to address the needs of uninsured and underinsured patients and to better understand their impact on the system's bad debt. Patients are educated about their financial responsibilities. The community benefits when all patients pay their fair share. Finally, and most important, the FAIR approach supports Intermountain's core mission in ways that meet the needs of all of its stakeholders. Implementing FAIR processes has resulted in successful practices in all of these areas and contributes to a better and more affordable patient experience.

Intermountain has been internationally known for high-quality clinical care based on best practices delivered consistently. However, the best clinical care does not mean much if it is not affordable.

Author affiliation:

About the authors

Bert Zimmerli, CPA,

is senior vice president and CFO1 Intermountain Healthcare, Salt Lake City, and a member of H FMA's Utah Chapter.

Todd Craghead ,

is vice president, revenue cycle organization, Intermountain Healthcare, Salt Lake City, and a member of HFMA's Utah Chapter (

Neera Gupta

is a director at Wellspring+Stockamp, Huron Healthcare, Chicago (negupta@

Note. Patent Pending: This article discloses aspects of an invention entitled "Systems and Methods for Processing Medical Service Cases" that is the subject of a pending provisional patent application.

People who read this article also read:

EnglishZildjian's DeChristopher to Retire
EnglishNEMC, Jupiter Launch Performance Contest
EnglishGrassroots Communities' Perceptions Relating to Extent of Control as A Pillar of Women Empowerment in Makhado Municipality of South Africa

The use of this website is subject to the following Terms of Use