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Patient-Centered Care

PARO – Payment Assistance Rank Order

Background

The application and approval process for healthcare payment assistance efforts and charity care is widely fragmented, time consuming and not effective in assisting many of the patients it is intended to assist.

Healthcare providers need a tool to simplify interactions with the patients in order to streamline the process for those patients who are engaged and to evaluate those accounts when the patient is not responsive to the charity care/payment assistance application process.

Existing scoring systems, such as collection scores and credit scores, analyze a debtor's likelihood of repayment and were developed based on an approach to maximize cash collections. For example, credit scores focus on the credit capacity of the responsible party. However, in healthcare, scoring systems should be based on the debtor's ability to pay, which is the purpose of the PARO system.

PARO Development

PARO was conceived as a methodology to apply consistent screening and application standards to all patients. Special attention was paid to those socio-economic factors that might adversely affect those patients deserving the most attention.

Historically, healthcare providers have used manual application processes to assess a patients financial need, largely for accounting and regulatory purposes. These processes require patients to complete complicated forms and to submit personal financial documents such as bank statements and tax returns with the application. The information submitted by the patient during this application process is then usually verified by credit/FICO scores.

PARO research has proven that patient financial need has a high correlation to where a patient lives, educational background, marital status, age, gender, and language/culture. Traditional credit scoring does not provide an adequate measure of these underlying conditions. The PARO score has been demonstrated to aptly identify those individuals with the highest level of financial need. More than 47 million people in the U.S. are uninsured while 78 million are considered poor or are likely to fall into poverty within any 12 month period. Many consumers living in poverty are challenged by literacy and the high cost of banking. This further contributes to lack of participation in traditional charity programs which require completed applications including bank account information and tax returns. A large portion of these people have been overlooked for charitable assistance.

The developers of PARO approached CHW with the proposition to utilize historical data to develop a predictive model for healthcare financial assistance that encompassed approved financial assistance applications, rejected financial assistance applications, and non­ responsive patients.

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