A Spokane-based company that turns what otherwise might be bad debt or charity care at hospitals into much-needed revenue moved here last year from Seattle partly because of its close relationship with Spokanes two largest hospitals.


The company, Pacific Medicaid Services Inc., works with uninsured and underinsured patients to determine if they qualify for federal, state, or private aid and, if they do qualify, helps them fill out and mail the proper forms to get it.


The result of its efforts last year, says Corey Shank, Pacific Medicaids director of operations, is that the company was able to scrounge up $93.4 million in reimbursements for its client hospitals in Washington state. Otherwise, that care might have been written off as charity care or bad debt, Shank says.


In Spokane, the company secured $37.2 million in such payments last year for Sacred Heart Medical Center, and $13.5 million for Empire Health, which operates Deaconess Medical Center and Valley Hospital & Medical Center, he says.


The companys roots date back about 15 years to Chicago, where attorney Greg Moga launched its sister company, Great Lakes Medicaid Inc. Moga moved to Seattle in 1995 and launched Pacific Medicaid there as an affiliate. That company, which moved its headquarters to Spokane last year, has grown to include branch offices in Seattle, Tacoma, Yakima, and the Tri-Cities, as well as in Oregon and Hawaii, says Shank.


Meanwhile, Great Lakes Medicaid, which remained in Illinois and Minnesota when Moga moved to Seattle, changed its name to Outreach Services in 2003, a name that both companies, which offer the exact same services, soon will adopt, he says.


Within the next year and a half, Pacific Medicaid will be known as Outreach Services of Washington, Shank says.


Together, the two companies employ about 125 people in five states, including 30 in Spokane, he says.


The companies earn their money by charging hospitals a percentage of the reimbursements they secure for their clients. Shank declines to disclose that percentage, but says, Hospitals carry such a small margin (of profit), that the only way for us to exist would be to carry a small margin as well.


By far the largest program those hospitals patients qualify for is the federally funded, state-administered Medicaid program. Of the $93.4 million retrieved by Pacific Medicaid last year for Washington hospitals, about $90 million came through Medicaid to help pay the bills of 6,861 people, Shank says.


Until about three years ago Medicaid was the companys only source for finding reimbursement funds, he says. Now, it taps nine other federal, state, and private programs.


Pacific Medicaid landed Sacred Heart and Empire Health as clients in 2000, and when Shank came to Spokane as project manager for the then-Seattle company in 2002, the companys office here had four full-time employees.


Business picked up immediately for the office and, with the companys move last year from Seattle to Spokane, Pacific Medicaid found itself cramped for space in the 2,200-square-foot office it leases at 508 W. Sixth.


In December the company bought a one-story, 4,500-square-foot building in the Marycliff Center, located between Sacred Heart and Deaconess Hospital, and its renovating the space and plans to move there by mid-May.


Protecting the patient


Pacific Medicaids client hospitals automatically refer their uninsured patients to the company, which has access to the hospitals accounting systems, Shank says. Pacific Medicaids employees then begin the process of determining which patient qualifies for which program. Hospitals also refer patients they believe will have trouble paying their insurance plans deductible or who have costs that exceed their coverage.


Our role is becoming ever more important as insurance companies command higher and higher deductibles, says Shank.


He says Pacific Medicaids employeescarefully selected and routinely trained for four weeks before they go into the fieldcan identify readily who will qualify for assistance.


The training begins with the companys mission, which focuses on the joint needs of the patient and the client hospital. Everything we do is always in both the patients and the hospitals best interests, says Shank.


Medicaid qualification is based on financial and medical criteria. Income guidelines and an asset test govern the financial element, while separate categories such as whether the patient is age 65 or older, disabled or blind, pregnant, or already has children, determine whether they will qualify for benefits.


Medicaid is a very difficult program to become eligible for, says Shank.


Qualifying for assistance for hospital debt became more difficult in 2003 when the Washington Legislature eliminated a program for the medically indigent. That action greatly reduced the percentage of people covered by government programs.


Although about 2,200 patients at Sacred Heart and more than 1,000 at Empire Health had claims brokered successfully by Pacific in 2004, there were still a lot of rejections, Shank says.


We have a lot of legal experience and follow through with a lot of appeals, he says, adding, however, that the company tries to avoid legal costs that could chip away at its margins.


Because Pacific Medicaid works daily with the programs it taps, it often can identify what Shank calls a technical or systematic denial that should have been approved. One example he uses is a faxed application with attached income verification that gets lost or is recorded incorrectly at a government agency. Without Pacific Medicaids help, the patient might accept such a rejection without questioning it, and the hospital would never get paid, he says.


Missionary spin


Moga began his career working for other companies that collect receivables for hospitals, but didnt like the idea of demanding money from patients who clearly couldnt pay, says Shank. Describing Mogas approach as a missionary spin to the practice of collecting hospital debts, Shank says today, We will do anything we can to have a patient not have to be responsible for their bill.


Pacific Medicaid isnt the only business of its kind in the Pacific Northwest, but Shank believes it controls about 85 percent of the available market. Most of the hospitals in Washington we have as clients, he says.


Hospitals are becoming more and more aware that they can get revenue from patients who wouldnt ordinarily pay, says Shank, and that makes him optimistic about the companys future.


Although employment at the company is at a plateau, he projects that Pacific Medicaid will triple its annual revenue within the next five years. He declines, however, to disclose its revenues.


In addition to Medicaid, other reimbursement programs that hospital patients can qualify for, and payment strategies the company can pursue, include:


Motor vehicle insurance discovery and facilitation, in which Pacific Medicaid looks at accident reports to determine if the insurance of another driver should pay the medical bill.


Indian Health Services.


Victims of crimes facilitation.


The Veterans Administration Millennium bill, a federal program that covers veterans who arent covered by the normal VA health-care coverage.


Third-party liability facilitation.


Hospital-sponsored programs, through which hospitals and banks provide low-interest loans for those who dont qualify for any other program (not currently used in Spokane).


COBRA benefits facilitation program, where recently unemployed individuals still eligible for COBRA coverage can get their rights reinstated.


Verifying claims with the Washington state Department of Labor and Industries workers compensation program.


Document retrieval for insurance billing.


Shank, 32, is a 1998 graduate of Evergreen State College, with degree in multi-cultural counseling.


I was surprised at how gracious the people we help really are, he says. They gave me cookies and thank-you cards.


He says that only about one of every 50 patients whom Pacific Medicaid workers visit in hospitals refuses to receive the companys services.