Hospitals Shirking on Financial Assistance

view-overall-inpatient-billKiln, Mississippi    When the doctors’ union, the American Medical Association Journal of Ethics rings the bell on the horrid practices of hospitals, you know we have a tiger by the tail – and we’re in danger of continuing to be hurt badly!

The Journal looked at 140 hospitals to see how they were preparing for the mandatory rule taking full effect this January under the Affordable Care Act of providing financial assistance to lower income families. What they saw wasn’t pretty, although we could have told them that from our close inspection of many hospital IRS 990 forms in Texas, Louisiana, Arkansas, and other states.

First the Journal confirmed the fact that finding the information, even for them, and certainly this has been the case for us, was like finding a needle in a haystack. They looked at a random sample of 140 hospitals across fourteen states. In their survey, they found that half of the institutions did not say on their websites whether they were public, private, or nonprofit. Needless to say, their reporter was web savvy which also wouldn’t be true of many families desperate to find if the hospital offered any help. So, transparency, not! Also, not surprisingly, they found that for-profit hospitals generally had not voluntarily created financial assistance policies in line with what nonprofit, tax exempt hospitals are now required to do.

But here comes the real rub in what the Journal found and it goes to the heart of the vagueness of the IRS requirements for financial assistance in this new rule:

…hospital financial assistance policies vary significantly in terms of generosity and terms. Among the sample of financial assistance policies from 140 hospitals, eligibility cutoffs for financial assistance ranged from an income of 100 percent of the federal poverty level (FPL) to 600 percent of the FPL. Many hospitals with financial assistance policies offered free care to those with incomes up to 100-200 percent of the FPL and sliding scale discounts above that threshold. However, some hospitals did not offer any free care and only offered moderate discounts even to the poorest patients. Of the hospitals in the sample that provided eligibility information based on insurance status, a quarter excluded those with insurance from their financial assistance policies altogether.

Bottom line, if your wallet is a bit light, you better start doing some research so that when you get sick you can find that 600% hospital or you are up a creek with no paddle. And, for those hospitals that exclude any lower income family from financial assistance if they have any insurance at all regardless of the deductible, we, and all those like us, need to start figuring out a way to challenge their tax exempt so-called charitable status.

The Journal was also clear about the hospital rip that starts with the “rack” rates for cares or charge master rates.

Hospitals routinely charge uninsured patients undiscounted “chargemaster” prices, the “rack rates” or list prices of the health care industry, while government and commercial payers receive substantial discounts of 50 percent or more of the chargemaster prices for their members

Yes, you are hearing this right. If you are covered with insurance, your bill is discounted. If you are uninsured and out of luck, your bill is essentially doubled!

The Journal argues that California provided a model that would have been immeasurably better and that has worked well for hospitals and patients in that state.

California’s Hospital Fair Pricing Act… limits how much California hospitals may charge uninsured patients who earn less than 350 percent of the FPL or insured patients whose medical bills exceed 10 percent of household income

Unless a miracle happens in the next several months, like the old song, we’re all going to wish we were living in California. When the doctors of all people in the AMA start calling out hospitals as bloodsuckers, you know we’re in a fight for our lives.

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Please enjoy the Wallflowers’ Back to California

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Clear Standards for Charity Care for Nonprofit Hospitals

03-11-top7-UPMC-Logo*750Little Rock    For millions there is a collective sigh of relief as 6-3 affirmation of the Affordable Care Act subsidies for low income Americans sinks in and allows us to stop pinching our arms about whether or not this is real. If there’s anything we’ve learned, it’s that the Supreme Court can “giveth,” as it did with Obamacare, and it can “taketh away,” as it did with the Presidency some years ago. More than 1200 rural hospitals, many of them nonprofits, were reportedly ecstatic at the decision since many, if not most, run deficits every year, so knowing there is going to be insurance matters hugely. Other hospitals and health insurers were also relieved.

For the more than 30 states still not operating exchanges, and in most cases not having expanded coverage for their uninsured who would be eligible for expanded Medicaid, this decision should mean that it’s time for an end to posturing and some serious business. In the meantime, the urgency of compelling tax exempt, allegedly nonprofit hospitals to provide their fair share of charity care to justify their shopping cart full of benefits in many states, is immediate.

It was initially intimidating to look more deeply at the giant University of Pittsburgh Medical Centers (UPMC) after my visit there recently because of its size and scope. Fortunately in some early window shopping, our Pittsburgh affiliate stumbled immediately on a fascinating document written by a locally prominent law firm at the request of the Alleghany solicitor on whether or not UPMC truly qualified for any sales, property, or other tax benefits based on alleged nonprofit and charitable status. The 13-page memorandum said it would be a lift given the firepower UPMC would bring to the battle, but firmly argued throughout the review that according to Pennsylvania law and court decisions they felt there was no doubt that UPMC did not meet all of the required five tests.

For a minute let’s just look at the tests, rather than at UPMC or any other hospital’s failures, because the Pennsylvania courts provide a useful guide everywhere for judging nonprofit hospitals and others.

· Advances a charitable purpose;
· Donates or renders gratuitously a substantial portion of its service;
· Benefits a substantial and indefinite class of persons who are legitimate subjects of charity;
· Relieves the government of some of its burden; and
· Operates entirely free from private profit motive.

When the modest average nationally for the provision of charity by nonprofit hospitals is 6% and hospitals are routinely failing this measure even under the most bend-over-backward liberality, we clearly have a problem. UPMC for example seems to toggle between a bit over 1% and 3% using a standard that goes way past liberality in counting things as charitable. The vast array of for profit enterprises nested in so many of these hospital systems as well as their lengthy and harsh recitation of procedures to squeeze every penny from the poor, would seem to disqualify many on the “private profit motive” count. Defining a “substantial portion” as even 6% also seems a bridge to far to stretch to define something as charitable. Seeing their service area and client base as a “substantial…class…who are legitimate subjects of charity,” would also leave many institutions lacking as they shutter inner city facilities and build grant suburban monuments to their pride and profit, rather than their mission.

Nonetheless, these five rules in Pennsylvania might be useful in setting the standards for hospitals everywhere, even if Pennsylvania hasn’t quite gotten around to enforcing their rules within their own boundaries yet.

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Please enjoy Compound Fracture by My Morning Jacket.  Thanks to Kabf.

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