SAC Review #47 – Winter 2024 Edition

QUARTERLY NEWSLETTER | WINTER 2024 – #47

Mitigating The Impact of Community Hospital Closures on Older Patients

By Joy Stephenson-Laws, Managing Partner Many hospitals, despite their best efforts to remain open, will need to make the difficult decision to close their doors. This is simply an unfortunate reality of today’s healthcare economics. Declining reimbursement and lower patient census have become the norm in many areas.

Whether these closures occur in a rural community or a more urban setting, one group that inevitably finds itself disproportionately impacted are seniors. Seniors usually represent a significant percentage of the patient population affected by hospital closures.

Many seniors were born and raised in communities serviced by one local hospital and decided to spend their adult lives there. Others make the deliberate decision to move and retire in such communities. Now, with the closure of their local hospital, they may find themselves miles away from the nearest hospital.

Hospital closures in more rural areas can result in the nearest hospital being more than 20 miles away. Given this situation, seniors understandably may feel somewhat concerned about and abandoned by the healthcare system when this happens.

It should not be surprising that various studies suggest that these concerns are well-founded.

Hospital closures may negatively affect a community’s overall health as well as access to healthcare services. These negative effects are especially severe for seniors over 65-years-old. They may choose to not seek alternatives to their previous providers due to cost, inconvenience and unfamiliarity with other hospitals or clinics that are out of their geographic “comfort zone.” Many may not even know how to go about making an appointment at an alternate location.

As such, routine wellness appointments, ongoing care for a chronic disease or necessary acute care are ignored or delayed, needlessly putting an elder patient’s health at risk. This risk is even higher for elders who may be economically challenged.

Seniors who find themselves with a local hospital closure may also be concerned about where they will be able to find specialists such as gerontologists or urologists; where and how to get routine tests; and what to do in case of an emergency.

pitalized three times as often as people between 45 and 65. They also represent more than a third of healthcare related spending, according to the U.S. Centers for Medicare and Medicaid Services.

These percentages will increase as the population continues to age. On a per capita basis, estimates put healthcare spend at over $18,000 per person age 65 and older. Some studies suggest that the per person spend on someone in their 90s could easily exceed $25,000 annually. Independent of the payor model, it is clear that this group represents a significant revenue source for providers.

indicate that seniors found it helpful to learn about healthcare resources, including how to get to them, via a variety of sources such as the local newspaper and senior center. Consider doing workshops on senior health topics to build community – and expand your patient database!

In addition, providers seeking to attract and retain seniors in their patient pool need to demonstrate (on an ongoing basis) some key benefits that are important to seniors.

These include the following: H aving specialists on staff who understand the special needs of seniors. Just as pediatricians don’t view their patients as miniature adults, seniors are not just older versions of their younger selves. Given that there are a declining number of board-certified geriatricians in the U.S., this could be a real plus.

R ecommending appropriate treatments or medications. Some doctors recommend treatment that may do very little for a senior patient, like recommending cholesterol medications to someone over 80 with no heart problems.

Cautious, evidenced-based treatment will go a long way to creating trust and confidence.

In addition to the medical aspects, older patients may also be affected by the loss of social aspects of the local hospital, such as seeing friends and family in the cafeteria during visits.

The central role that hospitals play in the lives of seniors will continue to increase as the population ages. According to the U.S. Census Bureau, by the year 2050 there will be 83.7 million people in the United States who are 65-years-old or older.

That’s nearly twice as many senior citizens as there were in 2012.

Remaining providers should fill this healthcare gap A provider who all of a sudden finds itself being the proverbial “only game in town” for healthcare services can benefit from this healthcare gap.

From a population health perspective, doing so greatly reduces the risk of patients going without needed care.

There are also compelling operational, financial and community relations reasons for doing so.

Paramount among these is that while patients 65 years and older represent around 13 percent of the U.S. population, they represent around 40 percent of hospitalized adults. They often are hos-

How can providers attract senior patients?

While virtually all providers have some form of patient recruitment and retention programs in place, reaching seniors who may have lost trust in the healthcare system or are feeling “lost” after a community hospital closure requires a special approach. This also holds true for seniors in general given their special needs and importance to a provider’s operations. When it comes to communicating with and building trust with seniors who have lost their local hospital, the following approach has been shown to be successful: P rovide or subsidize transportation to your facility. This has several benefits including making sure senior patients recognize that you’re really “not that far” away as well as allowing them to get to know your facility.

D evelop informative materials about what your facility offers. Given that many, if not most, seniors are digitally-literate, offer this information via a variety of platforms. Include interactivity as well begin a conversation and relationship with them. se a variety of channels to communicate U with this group. Studies done after closures

nowing what else to look for beyond the K traditional wellness check-list during exams and visits. This includes picking up on signs of isolation, depression, cognitive decline, lack of social support systems and self-care (such as remembering to eat enough and drink enough water).

P roviding opportunities to get more involved with the community. A great idea is to encourage seniors to become volunteers at your facility. In addition to giving them a way to give back in a meaningful way, it also strengthens the bond and relationship they have with you.

This, in turn, helps attract more seniors.

Some providers are very creative with building relationships with their senior community, including social outings and even “frequent healthcare” programs that reward seniors for taking better care of themselves via the provider’s facilities and services. While you don’t necessarily need to go to such great lengths, getting closer to seniors and being better able to meet their needs when they may no longer have the security of a local community hospital will benefit providers and patients alike. It’s a decision you won’t regret.

This quarter’s Spotlight is on Partner, Jennifer Jiao.

What is your area of expertise within SAC? My practice focuses on complex civil litigation matters involving health care reimbursement and insurance coverage issues. I handle breach of written contract cases, reasonable and customary value cases, and I also specialize in driving global resolutions for our clients. For our global resolutions, we work to identify whether there is an overarching issue between our client and a particular payor and/or whether there is a date of service range between our client and a payor that is ripe for settlement. Global resolutions are a great way to close out a large inventory of claims and comes with a large lump sum settlement. Through these global resolutions, we are also able to identify if changes to the parties’ contract are appropriate.

What one piece of sage advice can you offer to our clients that can help them in the future?

Avoid arbitration clauses that require more than one arbitrator. Many boilerplate agreements coming from payors will include a requirement for two or more arbitrators, regardless of the amount at issue.

Multiple arbitrators do not serve any meaningful purpose other than to drive up the cost of arbitrations. Depending on the arbitrator, arbitrator fees can range from $30,000-$50,000 and in an arbitration with a panel of three arbitrators, the fees can easily add up to $100,000. This can often mean arbitrator fees that are greater than the amount at issue and it becomes cost prohibitive to take cases to arbitration. Payors are betting on hospitals choosing to close claims or to settle claims for cheap, rather than pay for a panel of arbitrators. When negotiating a contract, whether it is the base agreement or an amendment, always insist on arbitrations with just one arbitrator or if the payor will not budge on having a panel, ask for a high-dollar demand threshold that serves as a trigger for the panel.

Can you talk about a recent success story of yours? What was the challenge and how were you able to overcome it?

On behalf of a prestigious hospital system in Northern California, I recently negotiated a $16.35 million settlement against one of the largest commercial payors in the nation. The settlement covers all claims between the parties with a date of service prior to 7/1/2022. The majority of the disputed balance arose from the payor’s practice of deducting line items from itemized bills submitted by the hospitals. Other denial reasons included denials for post-stabilization care, other payor claims, and claims where the payor alleged the hospitals billed the claims untimely or did not submit sufficient information to process the claim.

The settlement also wipes out the payor’s alleged overpaid claims, totaling $2.7million, for the same time period, with $0 payment to the payor. Finally, the settlement included an agreement between parties for a moving-forward agreement to address the payor’s line-item deductions – parties are now working on a list of agreed-to line items that restricts the payor’s ability to make line item deductions. The settlement was negotiated prior to litigation, allowing us to save on litigation cost and fees, giving maximum recovery our client.

The biggest challenge in negotiating this settlement was dealing with the large amount of claims.

A claim-by-claim analysis was too time-consuming for both parties, so we decided the most productive use of time was to identify the major denial issues causing payment disputes between the parties. I also found that taking time to address the payor’s concerns and/or disagreements with our calculated reimbursements really helped to enhance the trust and working relationship between the parties. I believe working together in good-faith really drove the settlement negotiations forward.

Do you have any hobbies or interests outside of work?

I spend all my non-working hours chasing after my two kids, Luca and Sophie. When my son turned three, we got annual passes to Disneyland. It’s a good way for Luca to get his energy out and it has been really special to see him take in the magic of Disney. He really believes all the characters live in

Disneyland and will ask questions like “How many ghosts live in the haunted mansion?” Sophie, on the other hand, is still too young to really appreciate Disneyland but she really enjoys watching her brother.

Do you have any charitable causes that interest you and events you have participated in recently?

I’m hoping to become more involved in my local Assistance League chapter. Assistance League is a national non-profit organization with local chapters providing community service and fundraising events to support their community. My local chapter’s signature program is Operation School Bell which is focused on serving kids ranging from kindergarten to 8th grade who have been identified as “in need” by their schools.

Do you have family and/or pets you’d like to tell us about?

I have two kids. Luca is three and Sophie just turned one.

Do you have any guilty pleasure television shows, movies or other activities to tell us about?

During the pandemic, my husband and I watched a bunch of seasons of Survivor, and we are still hooked. Although I would never want to be on the show, it is fascinating to watch people form alliances and scheme and plot against others.

What are your favorite foods?

Colors? Other favorites?

Sushi! I try to treat myself once a week to sushi. My favorites include salmon belly, sweet shrimp, sea urchin, scallop, and tuna belly. I also really enjoy omakase sushi, or chef’s choice. In omakase, the chef chooses the dishes to serve you, selections made based on your preferences as well as seasonality and availability of the ingredients. It is the best way to try the freshest ingredients and many times, the dishes are off menu.

UPCOMING EVENTS:

January 21-24, 2024, HFMA Western Symposium, Paris Las Vegas Hotel & Casino, Las Vegas, NV Join us at the Western Symposium from January 21-24, 2024, at the Paris Las Vegas Hotel & Casino. As sponsors of this prestigious event, our law firm is also hosting a special client dinner. This symposium is a prime gathering for healthcare professionals to engage in educational sessions and valuable networking, fostering professional development and industry collaboration. It’s an ideal platform for those in hospitals, health plans, and related healthcare sectors. For more information visit hfma.org/chapters/western-symposium.

February 26, 2024, HFMA Region 5 South East Summit, Tampa, FL Join Partner Chuck Acquisto from Stephenson, Acquisto & Colman at the HFMA Region 5 South East Summit in Tampa. In the session ‘Improving Revenue Cycle from the Legal Eye View’ on February 26, 2024, Chuck and leading experts will discuss key legal strategies in managed care and revenue cycle. Delve into topics like claim appeals, contract disputes, and maximizing ROI. Essential for those in hospital management. For more information visit hfma.org/south-eastern-summit.

All articles are written by the SAC Litigation team. The SAC Litigation team includes attorneys, nurses and physicians with extensive experience in all areas of law related to healthcare matters. Additionally, SAC partners hold legal advisory positions with healthcare organizations and sit on the boards of numerous healthcare-related organizations, and monitor all outgoing SAC client marketing materials and related content.

DISCLAIMER: This newsletter is for general educational and informational purposes only. You should not act upon this information without seeking your own independent professional advice.

We would love to hear from you!

If you have questions, comments or feedback, please email us at SACReview@sacfirm.com.

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