A number of daunting problems are facing the Cayman Islands Health Services Authority as the public health agency tries to collect on massive unpaid patient bills, Health Minister Osbourne Bodden told the Legislative Assembly Thursday.
Included among those difficulties was the fact that the “swipe-card” payment system used by the public hospital since early 2011 was not able to collect patient deductible payments for services outside of regular business hours. In other words, if someone used hospital services and their insurance company only paid 80 percent of the bill, the hospital would not have immediately known that if the visit was made after hours.
“This was the issue that the real time software was expected to correct,” Mr. Bodden said.
Most public healthcare system patients who are insured through the Cayman Islands National Insurance Company, or CINICO, do not have to pay deductibles on health services so it is not a problem. However, some do owe payments for hospital services and most other private insurance companies do charge deductibles for hospital services.
Health Ministry Chief Officer Jennifer Ahearn said Thursday that, while it had always been the intention to extend the swipe system to private sector insurers as well, that had never happened.
Minister Bodden did not state how much cash had been lost by the public health system because of the swipe card after-hours deductible collections.
According to government budget records, the Cayman Islands is expected to have amassed nearly $70 million in unpaid health care bills by mid-2015. Those are considered the Health Services Authority’s “bad debts” because all of the amounts owed are at least a year old.
Mr. Bodden said the amount owed to the health authority currently is about $55 million, and that steps are being taken to try to limit the growth in unpaid bills over the next year. Mr. Bodden said a working group would be named to study the issue shortly.
Other problems with uncollected hospital bills include the more common situation of insurers refusing to cover services or employers not keeping up with insurance payments for employees, Mr. Bodden said. Issues also arise with transient workers who leave the islands without paying medical bills, or when tourists receive medial treatments for which they can’t pay.
The health minister spoke of one case where a visitor had racked up $47,000 in hospital bills that their family promised to pay over a period of time. “This bill will be outstanding for some time,” he said. “But this is not just a visitor issue, many of these nonpayments … are from our own residents.”
In looking at bad debts accumulated over the past three and a half years, Mr. Bodden noted that some $10 million owed consisted of individual bills of less than $1,000 each.
“If these patients would even pay these small bills, it would make a substantial contribution [toward resolving the debt],” he said. “It is not good enough to think government will take care of this.”
The contract for the Cayman Islands Health Services Authority’s credit card billing system – known as CarePay – came under scrutiny during the Legislative Assembly’s Finance Committee last week.
Government approved the agreement for the Real Time Claims Adjudication and Eligibility Verification System in December 2010. According to CINICO’s annual report to government for the 2010/11 budget year: “The swipe card would enable instant verification of eligibility, benefits, provide ‘real-time’ adjudication of the claims and determine any patient out of pocket expenses, if applicable.
“This would streamline the whole process at both the Cayman Islands Health Services Authority and [the] Cayman Islands National Insurance Company and significantly reduce the Cayman Islands Health Services Authority’s bad debts,” the annual report noted.
The Cayman Islands Health Services Authority now expects to have nearly $70 million in unpaid bills from services rendered to patients by the end of the upcoming budget year in June 2015, according to government financial records.
If the projection of the additional unpaid bills occurs as finance managers expect, the Health Services Authority will have gone from having an estimated $45.8 million in unpaid receivables during the 2012/13 budget year to $69.9 million in the 2014/15 budget year.
Additional questions regarding the beneficial ownership of CarePay’s management company, AIS Cayman Ltd, that were raised in Finance Committee were not addressed by Mr. Bodden on Thursday.