Do Emergency Departments Have A $30B Identity Problem?

Posted on April 12, 2012 I Written By

Anne Zieger is veteran healthcare consultant and analyst with 20 years of industry experience. Zieger formerly served as editor-in-chief of and her commentaries have appeared in dozens of international business publications, including Forbes, Business Week and Information Week. She has also contributed content to hundreds of healthcare and health IT organizations, including several Fortune 500 companies. Contact her at @ziegerhealth on Twitter or visit her site at Zieger Healthcare.

Given the pressure to produce, produce, produce, most doctors squeeze far more patients into their day than they’d prefer, and often, the endless rush leads to many clerical mistakes. In the emergency department, the problem is even worse, as EDs handle immense, variable volumes of encounters which make it hard to allocate staff to meet patient care needs, much less check basic patient demographic and personal data for accuracy.

In both environments, it’s easy for patient name misspellings or identity mismatches to slip by. In fact, according to vendor MiddleGate Med, fact-checking and finding say, updated addresses for clients can be so taxing that many hospitals simply give up and send out bills which patients never see. This costs U.S. hospitals $30 billion per year, according to the company.

Right, hospitals write off more then 12 percent of all revenue on bad debt, according to some researchers. “That means they’ve already tried to clean up their database and get this right, and they haven’t managed to change it,” said one hospital executive.

MiddleGate’s new product, IdentiCare, is designed to help hospitals verify patient information quickly and accurately.  It comes as Web-based system, which then ties into the hospital database through an HL7 interface.  “We just want to make sure that the hospital has current and accurate information on them so you can get bills out of A/R.”

Another benefit, which MiddleGate doesn’t stress (but should) is that better patient identification techniques can help make sure that hospitals meet the FTC’s Red Flag rules requirements, which are designed to prevent medical identity theft.  Since hospitals aren’t used to following the standards set for typical creditors, any help here is welcome, no?

All that being said, has MiddleGate taken the right approach to closing leaks in the hospital revenue cycle?  Are there other pressure points which are equally important in improving hospital collections and profitability? (For example, might it be better spending time on how to streamline online communication, especially rapid claim adjudication, from the inarguably solvent carriers rather than chase down $20 co-pays?)  What do you think?

P.S.: By the way, a former client of mine estimates that if you don’t collect the co-pay before the patient leaves your office or ED, much less bill them accurately and quickly, less than 20 percent will ever pay at all.  I can’t vouch for that number, but my guess is that the CEO I worked with is right.  But I’ll share more of his conclusions in another piece.