By Michael F. Carmichael
March 5, 2009
Attorney Bruce Knight is the founder of Advomas, a company that processes previously unpaid bills for a number of Michigan hospitals. For 18 years his company has also been the administrator of the Oakland County Indigent Health Plan, a source of pride for the fifth-generation resident of Oakland County.
Advomas is small, but growing. Each year its 100-plus employees process more than 100,000 hospital claims, each representing a person who’s been treated by a hospital, but doesn’t knowingly have the funds to pay for that treatment. The goal is to find a third-party source to get at least partial payment for the hospital. Corp! talked to Knight in his Troy office.
“I got started with helping Beaumont Hospital and its patients get funding from outside sources,” he says. “Actually, I got started a lot longer ago than that - when I was around 17. I helped a neighbor and his son free their diving raft which had gotten stuck in the low end of our lake. I tried to pull it out with my rowboat but that wouldn’t work so I just jumped in - it was maybe less than hip deep, but it was full of muck and weeds - and pulled it out. When I got back on shore everybody had to help remove the little critters who were attached to places I couldn’t reach,” Knight laughs.
After graduating from DePauw University and law school, Knight entered private practice. “By the time I had gotten my law license and was in private practice,” he picks up the story, “my neighbor, who was by then the general counsel for Beaumont gave me three patients and said to see if I could get funding for them. Well, one I tracked down was living in his car. Another was in a crack house. Not the most pleasant places for a young lawyer to have to get people to sign a bunch of government forms. But, I did it and thus got Beaumont money it otherwise wouldn’t have gotten,” he explains.
“By then,” Knight continues, “I had figured out that this was an interesting way to help people pay for their medical care while assuring hospitals that they did not have to write off a lot of uncollectible debt. But what I did differently was to contact the patients directly, while they were still in the hospital. I had my fill of life on the streets.”
“Now,” Knight explains, “we’re able to make a client hospital $500,000 for every 100 beds in the first year of working with us. By the third year we’re able to make them $1 million per hundred beds. That’s money they wouldn’t have gotten were it not for us,” he says proudly.
Corp! asks about the unique program run by Oakland County to protect its working poor from catastrophic health care costs. Knight explains, “Eighteen years ago we took over administration of the Indigent
Care program from Oakland County. We look for other sources of payment - Medicare, Medicaid, some other private provider - and then turn that money over to the participating hospitals. Last year we found enough to cover some $12 million in hospital charges from outside sources.”
Knight continues, “The hospitals pre-qualify the patients for us to work with. They don’t qualify for Medicaid, they usually have more financial resources than that. Many of these people have lost their jobs, or at least their health care insurance. We then look for alternative payment sources. Sometimes, it is Medicaid because the patient has now become disabled and qualifies. If they’ve been in a car crash, we look to no-fault insurance. The amount we can recover can range from dollar-for-dollar to 25-cents on the dollar - but to the hospitals it’s much better than nothing,” he explains.
With the national economy in trouble, Oakland County is feeling its effects in a variety of ways. “The program is becoming so huge, now,” Knight continues, “because so many people have lost their jobs, and so many companies have eliminated their health care insurance to survive. Last year we processed around $25 to $27 million in charges to get down to that $12 million.”
Administering the Indigent Health program is not just numbers to Knight: at the heart of it is the people. “The important thing is,” he says, “that we saved some 1,500 Oakland County residents from bankruptcy last year alone. They’re people who’ve lost their jobs, and/or their health insurance and all of a sudden they’re in the hospital for something and end up with a $50,000 hospital bill. They don’t qualify for Medicaid, so the program lets them stay out of bankruptcy and keep their home and some assets. The County fund helps pay for a small portion of the bill and the hospital agrees to accept that as total payment. Failing that,” he explains, “they would have lost their home and had to pay the bill in full and file for bankruptcy. These are good people, who’ve met their responsibilities all their lives and all of a sudden life turns on them. You should read the letters we get from them. They’re heart-wrenching.”
Knight is obviously proud of the program. “It’s so wonderful because it’s a melding of free enterprise (us at Advomas), the people of Oakland County, the County itself and the hospitals, which really give back to their community.”
He also credits the Oakland County Commissioners . “They’re Republicans and Democrats who work together to get things done for the benefit of the county. As commissioner Dave Potts said in another Corp! article, our county commissioners ‘are good people.'”
Knight wonders “why it can’t work elsewhere like it does here. If the program were expanded statewide you could solve a major part of the medically-induced bankruptcy problem.”
“Corporately,” Knight explains, “administering the Oakland County program ends up costing our company about $50,000 a year, but our people buy into what we’re doing - it’s part of our corporate philosophy - even though it essentially comes out of their profit sharing.” Advomas employees seem cast out of the Knight mold. They routinely receive awards for blood drives from the Red Cross. Each Christmas season finds them, along with Knight, ringing bells at Salvation Army kettles (Knight has been on the board of the Salvation Army for years) in addition to sponsoring homeless families and donating to national charities.
“If you do good things for people, darn if good things don’t happen to you,” Knight explains. “But,” he cautions, “we’ve lost a lot of that along the way. That and civility. We need to get them both back.”