Does Your Hospital Owe You Money-An Examination of Charitable Care Standards in the US

 

Hospitals Forced to Comply with Charitable Care Standards in the US

Charitable care nationally represents only 1.4% of hospital operating costs, yet these behemoth money making corporations still seek to deny care to those most in need, often causing people to defer medically necessary procedures or forcing them into bankruptcy. Does being a working-class person mean your health is less important-I think not. Read this article to learn more about laws that protect your rights to obtain health care in the United States. The Patient Protection and Affordable Care Act requires hospitals to offer charity care and to inform patients of their rights and eligibility for free or reduced cost health care if those facilities accept any federal reimbursements. (Congress, 2010)Many hospitals have not complied with this federal law, resulting in multitudes of lawsuits from Attorneys Generals and private citizenry. This article reviews these actions and results benefiting patients and the general public.

A 2019 lawsuit against St. Joseph Hospital of Tacoma, Washington by State Attorney General, Bob Ferguson found that the hospital had repeatedly violated the state Consumer Protection Act by not informing patients of their right to reduced cost health care under charitable care provisions. As a result, this hospital and all the others owned by CHI Franciscan, a nonprofit Catholic health care entity, were required to forgive 20 million in debt, refund 2.22 million for patients who were hornswoggled, and to restore their credit. Most egregious was the hospital’s practice of turning its own employees over to debt collection rather than providing them care assistance. Additionally, the hospital group had to pay the Attorney General’s Office 2.46 million. Further, this settlement was only for a five-year period from 2012-2017 and impacted over 5,400 people who had received care. (Washington State Attorney General's Office, 2019)

This opportunistic behavior continues unabated, in 2022, State Attorney General, Ferguson sued Providence and its Swedish Hospital affiliates for failing to provide patients with the charitable care to which they were legally entitled.  Providence hospitals are located across the state, from Seattle to Walla Walla and in many cases are the only hospital in a community. As a testament to Providence’s management, 54,000 people were sent to collections even though it knew they were eligible for charitable assistance and many should have had their bills forgiven in entirety. In this lawsuit the Attorney General is asking for 70 million in damages. (Washington State Office of the Attorney General, 2022)

 As cited in the Center for American Progess, seven of the ten most profitable hospital groups in the country were nonprofits. (Gee, 2022)

State Charitable Care Mandates

Washington

Requires hospitals to make charity care accessible to patients whose income is at or below 200 percent of the Federal Poverty Guidelines. Hospitals are required to:

• Provide notice of the availability of charity care both verbally and in writing
• Screen patients for charity care eligibility before attempting to collect payment
• Only require patients to provide one income-related document to prove charity care eligibility

Oregon 

In 2019, Oregon began mandating charitable care standards for hospitals and clinics to offer free or reduced-price health care. It requires free care for anyone within 200% of the federal poverty limit (FPL) and discounted care for those within 400% of the FPL. (Tiel, 2019)

California

California has had a Hospital Fair Pricing Act since 2007 and California’s largest public hospital was found to have violated the act and as of June 2023, to notify its 43,000 patients they may be eligible for charitable care refunds and billing corrections because of this settlement. This settlement was with Santa Clara Valley Healthcare. (Work, 2023)

In order to receive a state tax exemption, hospitals must offer reduced price or charitable care to those whose incomes are within 400% of the federal poverty level.

Charitable Care Mandates for Other States

In 2019, states requiring nonprofit hospitals to provide a minimum level of charity care were; Illinois, Nevada, Rhode Island, Pennsylvania, Texas, and Utah.

Colorado and New Mexico have new laws that require medical facilities to assess a patient’s eligibility for financial assistance before billing them. (Pitsor, 2022) Check your state legislative site for updates on consumer protection regulations for healthcare as there is much activity on this issue nationally.

Even during the corona virus, hospitals have not stopped suing patients for unpaid bills. A Yale University found that nonprofit hospitals were more likely to sue patients for unpaid bills than for profit entities. (Gee, 2022)

Determining Community Benefit

After the passage of the Affordable Care Act spending on uncompensated care for hospitals declined from 6% to 4% of operating revenues, which is nearly half. So, as taxpayers we are subsidizing their gratuitous profit making at the expense of people who need care. Definitions of community benefit do not necessarily include care for those who need it the most, and can include less medically urgent things like building walking tracks and various classes. This needs to change, because hospital care is critical access and people who need it should not be bankrupt because of the avaricious behavior of a few in corporate finance.

Studies have shown that some nonprofit hospitals spend only a small portion of their community benefit spending on services that help the community and a much greater percentage on services that benefit the hospital (Wen et al., 2022). One study found that for-profit hospitals spent a greater share of the total revenues on charity care than nonprofit hospitals (Bai et al., 2021). These studies have raised interest among policymakers in how to provide incentives for nonprofits to increase the level of community benefit and charity care they provide. (Hossein, 2023)

Human Rights Watch published an article on the predatorial behavior of US healthcare hospital groups in 2023 and it is worth a read. https://www.hrw.org/report/2023/06/15/sheeps-clothing/united-states-poorly-regulated-nonprofit-hospitals-undermine

What You Can Do to Make Sure You Are Not Overcharged

Federal law requires hospitals operating as nonprofits to provide some level of charitable care and 58% of all local community hospitals are in this category. Here is how you can assess whether your hospital is within the guidelines and what you can do to make sure you and your loved ones obtain the fair-priced health care that you deserve. Federal poverty standards, which determine assistance eligibility  are listed in this link.

https://aspe.hhs.gov/topics/poverty-economic-mobility/poverty-guidelines

 At a minimum if  your family's income falls within 200% of the federal poverty level range you may be eligible for free or discounted health care. Ask about charity care and demand to see the eligibility standards for the facility which is billing you. If they are reluctant to provide the information, this is all the more reason to discover it, because you probably are eligible for some discount. If you need someone to advocate for you, have someone with healthcare finance experience write a letter on your behalf. Document everything. Record the meeting with the financial representatives of the facility. And reach out to your state Attorney General for guidance on how to proceed.

Hospitals, which are making tons of money in the US do not want to appear “greedy,” but it is much too late for that moniker for these behemoths. By way of example, Seattle-based Providence Health Care, makes so much money it has its own venture capital fund. Methinks Americans would rather pay less for their health care then finance someone else’s capitalistic dream.

And this is the healthpolicymaven signing off encouraging you not to sign blanket authorizations when you agree to health care procedures. Do stipulate that for which you agree and which you don’t and do have a medical guardianship or POLST agreement to see that is enforced.

Roberta Winter is a freelance journalist who accepts no money from healthcare industries for this column, opinions here are her own. She is the author of a guidebook to the US healthcare system, which focused on consumer information on how to access quality in care. https://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972

References

Gee, E. W. (2022, October 2022). Policies to Hold Nonprofit Hospitals Accountable. American Progress. Retrieved September 1, 2023, from https://www.americanprogress.org/article/policies-to-hold-nonprofit-hospitals-accountable/

Hossein, Z. P. (2023, March 9). When States Mandate Hospital Community Benefit; Provision Increases. doi:https://doi.org/10.1097%2FJHM-D-22-00156

Tiel, R. (2019, September 17). WHAT OREGON’S NEW HOSPITAL CHARITY CARE LAW MEANS FOR YOU. Retrieved from Our Health Oregon.org: https://ourhealthoregon.org/news/what-oregons-new-hospital-charity-care-law-means-for-you

Washington State Attorney General's Office. (2019, April 26). Following AG’s charity care lawsuit, St. Joseph parent company CHI Franciscan will provide up to $25 million in restitution, debt relief and fees. Washington. Retrieved September 1, 2023, from https://www.atg.wa.gov/news/news-releases/following-ag-s-charity-care-lawsuit-st-joseph-parent-company-chi-franciscan-will

Work, M. C. (2023, August 14). Patients in California County May See Refunds, Debt Relief From Charity Care Settlement. KFF Healthcare News. Retrieved September 1, 2023, from https://kffhealthnews.org/news/article/charity-care-settlement-debt-relief-patient-refunds-santa-clara-california/?utm_campaign=KHN%3A%20Daily%20Health%20Policy%20Report&utm_medium=email&_hsmi=270170941&_hsenc=p2ANqtz-8SNEPlsuaEb7MYh2zoC5ruEMhnT1k7kNjPPr7

 

 

 

Hospital Pricing Transparency-The Next Health Care Mandate

Hospital and Medical Procedure Price Transparency-The Next Health Care Consumer Reform

Given the mandated personal responsibility for health insurance, pay for performance Affordable Care Act methodology, and increased reporting of insurance plan administrative data, it is clear that consumer driven health care is launched.  However, one piece of the puzzle is still missing, which is an understanding of the cost of a procedure before you have it done at your chosen facility. Increasingly there has been consumer demand for better disclosure of health care pricing which has resulted in a number of legislative proposals across the country. Also, one state created a unique and highly effective payment model for hospital services over forty years ago and it may be the future for a workable streamlined national model for reimbursement. This article reviews data from the nonprofit organization, National Conference for State Legislation.org, as well as state public health, and the Medicare All-Payers-Claims-Database to show the spread between states for procedure charges. Using the Centers for Medicare and Medicaid site, the public can now obtain patient safety and cost information from the government web site in advance of choosing a facility for a medical procedure.[1] In addition to this price/compare site, Health and Human Services has the Hospital Compare web site which allows parties to search based on safety records also.[2]

The National Conference for State Legislation report illustrates a vast difference in total hospital charges for the same procedure, but the Medicare reimbursement was nearly uniform.[3] The spread between the gross or marked-up charges reflects a combination of under-reimbursement from CMS and a climate of private payer willingness to pay more for the procedures. The CMS report from which this May 2013 article was based reviewed 130 of the most common medical procedures at hospitals to establish the price perspective. The exception to the dramatic price spread between gross charges and actual reimbursement paid was Maryland, because of its model for pricing transparency. For example, the statistical average charge for joint replacement in Maryland in the August 2012 report was $21,230 and the actual reimbursement paid to the hospital was $20,048. This contrasts greatly with the other states who report variances as wide as $60,000 between the billed price and the net reimbursement from Medicare.

I accessed the web site for the Centers for Medicaid and Medicare and performed an EXCEL search for the diagnostic code 482, which is a common code for orthopedic surgery, but not for full hip replacement; then extracted that data for my conclusions below.[4] (The information was drawn from 2009 published data, based on 2007 Medicare payment information.) California had the widest discrepancy between the billed charges and the Medicare payment, reflecting its high labor, rent, and other marginal costs impacting business in that state. But Nevada came in at number two for the most egregious pricing for this procedure code, despite its low labor costs, inexpensive real estate, and low scores for health status, as revealed in Unraveling U.S. Health Care-A Personal Guide in 2013.[5] This means that private insurance companies are paying a much higher cost for this same procedure than other insurers pay in other states. This factoid should be of interest not only to the patient, but to the insurance companies who negotiate contracts with hospitals and clinics.

 The five most expensive states for this type of orthopedic procedure were:

State                     Total Charge                      Actual Reimbursement

California                $68,603                                 $12,359

Nevada                  $63,755                                 $10,358

New Jersey            $55,694                                 $11,054

Florida                   $50,455                                 $  9,353

Pennsylvania          $46,672                                 $  9,880

 

The five least expensive states for this same orthopedic procedure were:

State                     Total Charge                      Actual Reimbursement

Maryland                $14,931                                 $14,081

Maine                     $22,832                                 $10,362

Montana                 $23,196                                 $  9,284

Vermont                  $23,308                                 $13,445

North Dakota         $24,129                                 $  9,787

The Maryland Model- An Alternative Method for Calculating Hospital Payment

Let’s take a closer look at Maryland’s hospital pricing model, called an All Payer Pricing Model, which was established in 1971. Rates for medical procedures are set annually in Maryland, sort of like the state insurance commissioner’s “file and use” policy for insurance pricing. The purpose of the legislation was to provide financial stability to the hospital industry, to create efficient and effective care, to constrain hospital costs, and to find a way to finance the increasing burden of uncompensated care. In order for Maryland to have this type of payment methodology they had to apply for a waiver from Medicare, which pays a percentage of gross charges for everything, rather than this bundled price per procedure.  It seems the Maryland model is practical and has worked for four decades, so why can’t we adopt something like this across the country? We already have states with waiver programs for Medicaid. If that isn’t enough of an incentive, Maryland’s hospital cost increases were 2% in 2009 versus 4.5% for the rest of the nation.[6] What an appealing quality for possible business advertisement for the Chambers of Commerce in the Chesapeake Bay State.

 State Legislation to Create Hospital Pricing Transparency

States which are leaders in the charge for medical service pricing transparency with laws mandating disclosure of hospital prices include: Colorado, Kentucky, Kansas, Minnesota, Maine, Massachusetts, New Hampshire, New York, and Utah. Utah actually has a web site that allows consumers to view procedure and price information for payers, if you know the ICD9 or DRG code and can use a query form. States with legislation to enact medical service pricing transparency include: New York, Ohio, Oregon, and Pennsylvania.

States with voluntary price reporting for hospital services are Michigan and Washington. While attempting to access hospital procedure price information for Washington State, the National Conference of State Legislation.org web site led me to the Puget Sound Health Alliance.org web site which resulted in a non working link. After hunting around on the Puget Sound Health Alliance web site (funded by health plans, health systems, and employer groups), I could not locate any price/procedure information or report. Theoretically hospitals report their pricing for procedure data to Puget Sound Health Alliance, but it isn’t available for public scrutiny at this time.

Since we are all subjected to the most expensive health care system in the world, I think we deserve to know what the services cost before we sign our lives away, literally and figuratively. And this is the healthpolicymaven signing off wishing you a safe and happy holiday season.

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[1] http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html

[2] http://www.medicare.gov/hospitalcompare/search.html?AspxAutoDetectCookieSupport=1

[3] http://www.ncsl.org/Portals/1/Documents/magazine/articles/2013/SL_0913-Hospital.pdf

[4] http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Inpatient.html

[5] http://www.amazon.com/Unraveling-U-S-Health-Care-Personal/dp/1442222972

[6] http://www.ncsl.org/research/health/uncovering-hospital-charges-sl-magazine.aspx

Former Governor's Death With Dignity Initiative

Booth Gardner, former Washington State Governor is campaigning to have physician-assisted suicide legalized in Washington State. Since the New York Times published an article on his initiative the same week the healthpolicymaven posted an article about palliative care and medical directives, a closer look at the ramifications of the proposed legislation follows.

Gardner is traveling throughout the state soliciting support for an Oregon style assisted suicide law, which would allow physicians to provide patients with suicide medication dosing under very specific circumstances. A similar measure was put before Washington voters in 1991 and defeated by 54% of the voters. Though suicide is legal in Washington, physician aided death is not.

Here are the provisions for the proposed Death with Dignity referendum if it copies Oregon State Law:
-Permits legally competent patients who are at least eighteen years of age, state residents, and who suffer from a terminal disease, to obtain lethal prescriptions
-The patient must make two requests to end to their suffering, with at least a fifteen day separation between the pleas
-Patient must obtain two separate opinions from physicians indicating the patient has less than six months to live
-Would allow Physicians to prescribe a lethal dose of medications to patients, but not administer the drugs
-The state would track the number of assisted suicides, just as it tracks other causes of death

Prevalence
Oregon’s Death with Dignity Law was passed with a 51% majority in 1994, and enacted in 1997 after overcoming legal challenges. Oregon has reported just 292 assisted suicides over the last ten years. Though 455 people in that time frame obtained prescriptions for lethal medications, only 64% acted on the desire to end their life. When you compare the number of Oregonians who died a natural death from similar causes, less than one tenth of one percent of the residents opted for assisted suicide.

Difference between terminal sedation and euthanasia
It is important to differentiate terminal sedation from euthanasia and both practices were analyzed in a Netherlands study in 2006. In the Netherlands study, clinical practices were reviewed for 410 physicians and their patients who were primarily diagnosed with cancer. The report showed that patients who requested euthanasia were typically more concerned about loss of dignity and were less anxious (15%) than patients requesting sedation (37%). Physicians reported that terminal sedation had shortened participant’s lives by one week in 27% of the cases, whereas 73% of the euthanasia cases were shortened by a week.

Vulnerability
Opponents of suicide frequently express concerns that the uninsured and vulnerable will be taken advantage of with a formalized right to assisted suicide. First, lets hope the United States decides to provide health care for all of its residents in the near future. Secondly, since such a small portion of the population who are eligible for assisted suicide in Oregon and elsewhere, actually make this election, there is minimal financial incentive for a health care system to hasten the death process. Using the Netherlands example of a life reduced by one week, we could apply the Medicare reimbursement to the number of patients who would make that choice. This scenario would depend on whether or not the patient was in an acute care or long-term care facility and the location of the facility. Lets assume all of the patients were Medicare eligible and use the Oregon average of 38 assisted suicides per year to calculate the potential reduction in Medicare charges. According to the Washington State Hospital Association, the average Washington State hospital payment under Medicare was $4,603 in 2005, with an average length of stay of 4.37 days. Based on the Netherlands study we could assume Washington might save $1,053 per day or $7,373 per patient, by avoiding a week of inpatient care for end-of-life treatment. In this example, the maximum savings to Medicare would be $280,183 for this population over an entire year.

Who else does it
Other countries have legalized assisted suicide protocols, foremost of which is Netherlands, who report 2,000 assisted suicides per year. Netherlands is the only country that also permits legal euthanasia. In 2002, the Council of Europe conducted a comprehensive survey on assisted suicide provisions, which found eight countries that responded they did not outlaw the practice of assisted suicides. However, only four countries had legal and transparent provisions for assistance with suicide: Netherlands, Switzerland, Belgium, and Oregon State in the U.S.A.

Certainly some practitioners in the medical profession may raise concerns about violation of the Hippocratic oath for assisting patients with suicide. However, in a 1998 survey of oncologists, the Journal of the American Medical Association reported 16% indicated they had anonymously assisted in patient suicides. So, it would seem the practice of helping patients end their suffering is not new, just lacking in formality for Washington and other states. Gardner needs to have 225,000 signatures by July to get this initiative on the ballot in November.