Medical FICO Score to Judge Patient Payment Ability

Hospitals could soon be using a financial tool to help determine whether a patient can pay his bill or is likely to default on the charge, according to several news reports.

The medFICO score is being developed by a health technology firm with backing by Fair Isaac Corp., Tenet Healthcare Corp., a large for-profit hospital operator, and venture capital firm North Bridge Venture Partners, according to a report today in the Dallas Morning News. Each of the three partners has invested $10 million in the medFICO, the paper reports.

Waltham, Mass.-based Healthcare Analytics is the developer of the medFICO, based on the FICO score that judges a consumers credit quality and ability to repay debts.

Healthcare Analytics is in the research and development phase of the product and is gathering patient billing data from several hospital systems, according to the FierceHealthcare trade daily for healthcare executives.

The medFICO could be available by the middle of next year.

Healthcare Analytics focused on patient bills because such charges are typically involuntary, with the consumer entering the hospital during an emergency or to undergo a needed medical procedure. A standard FICO score is typically built from voluntary purchases, like the use of a credit card, and may not transfer to how that consumer will respond to a hospital bill.

The score is designed to be used by a hospital after the patient has been treated and discharged, according to Healthcare Analytics Chairman and CEO Stephen Farber. That will give the healthcare provider data to determine the patient’s bill and payment plan.

Bad debt is a growing problem for hospital operators. Tenet reported $433 million in bad debt through its third quarter this year. About 75 percent of that was from uninsured patients and the remainder from insured patients that didn’t pay their bills, a Tenet executive told the News. The executive said that Tenet is unable to obtain a credit score for about 40 percent of its self-pay patients.