Archive for the ‘Hospital Accountability/Charity Care’ Category

Sunshine in December: Modern Healthcare Goes Deep on Charity Care Spending as IRS Shores Up Future Reporting

Friday, December 23rd, 2011

Two important pieces of news on the health access and transparency front arrived in time for the holidays:

  1. Modern Healthcare’s analysis of non-profit hospital tax reports shows, for the first time ever , what hospitals spend nationally on charity care, and
  2. The IRS held firm on requiring non-profit hospitals to report how they’re complying with ACA requirements on charity care (financial assistance), billing and debt collection for tax year 2011.

Here’s how these pieces connect. Starting with Fiscal Year 2009 tax documents (specifically, Schedule H of Form 990), the IRS finally required hospitals to break down and report community benefit spending, including charity care. After the tax forms were submitted in 2010 and made their way to the not-for-profit service GuideStar, Modern Healthcare took the data and did a comprehensive analysis. It found that half the non-profit hospitals spent 1.52 percent or less of total expenses on charity care, and two-thirds of non-profit hospitals spent 2 percent or less on charity care. The median profit margin was 3.13 percent.

Those numbers—in the aggregate, at least—aren’t pretty. But they’re not the whole story, either. Yes, it’s true that hospitals can choose to spend their community benefit dollars in ways other than charity care, and that those dollars can be well-spent (see Following the Leaders: How Some Hospitals Use Community Benefit Programs to Address Health Equity). But with charity care numbers this low, and unemployment and uninsured rates so high, we have to wonder: are hospitals running their community benefit programs in a way that sidesteps the need for financial assistance in their communities?

Holly Lang, an advocate in Georgia, put the Modern Healthcare findings into context in a “Marketplace” segment on American Public Media, saying that in an experiment she did with 34 hospitals in Georgia last summer, only two provided information about charity care (also called financial assistance) for uninsured patients. Clearly, there is room for improvement in the ways hospitals communicate with patients who need financial help. And we think improvement is on the horizon.

Last week, the IRS announced that, come Tax Year 2011, non-profit hospitals will have to report how they’re complying with new ACA requirements that deal with how hospitals run key parts of their community benefit programs, not just how much they spend. For example, non-profit hospitals will have to report on the contents of their financial assistance policies, including the steps they take to publicize them to the community—just the kind of information Lang found to be in short supply in Georgia last year.

This is an important step. Additional reporting will provide the data necessary for communities to assess their hospitals’ contributions to the community in a broader context than the charity care figures provided on 2009 documents, by including details about the financial assistance policy eligibility criteria, dissemination of the policy, and billing and collections practices. The data will also be crucial to inform further public policymaking.

Will everyone be pleased with these changes? Probably not. The IRS issued a 2010 Schedule H that reflected the requirements of the ACA. But, after pressure from the American Hospital Association and others, the IRS decided to make the reporting optional for 2010. (See our previous blog, Two Steps Forward, One Step Back on Hospital Transparency.)

But we’re glad the IRS has beefed up reporting. We need information about hospital spending and the particulars of key community benefit programs to understand how hospitals meet community needs, and where there’s room for improvement. At the end of the day, we believe transparency and sunshine will drive real change. So the next time Lang has an uninsured patient who needs hospital care in Georgia, we hope more than two provide life-saving information about charity care. Now let’s schedule that follow-up appointment…

– Anna Dunbar-Hester, Policy Analyst

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Following the Leaders: How Some Hospitals Use Community Benefit Programs to Address Health Equity

Monday, September 26th, 2011

We’ve used this space to talk at some length about the shortcomings that follow from our “patchwork quilt” of state and federal standards for community benefit. Today, we’re taking a detour to talk about what’s right with community benefit—specifically, steps some hospitals are taking to address disparities in health through community benefit programs.

Naming the Problem
The face and voice of America is changing. Racial and ethnic minorities currently comprise one-third of the U.S. population; nearly 47 million people—18 percent of the population—speak a language other than English at home. With this change in demography, the health of the United States as a whole is becoming increasingly dependent on the health of minority populations. Yet disparities in health are widespread, well-documented, and present in every factor that impacts how long and how well people live: from healthy behaviors to clinical care access and quality, and from social and economic factors (like income, housing, and education) to physical factors such as environmental quality. Each year, an estimated 83,000 deaths are attributable to racial and ethnic health disparities.

Fortunately, some hospitals are responding to factors contributing to disparities in health by creating community benefit programs that address all of the factors impacting health in their communities, including access.

Creating Solutions through Community Benefit
Last week, hospital community benefit officers and consumer advocates shared their experiences with partnering to address health disparities.

First, we shared Community Catalyst’s vision for “community benefit” as goods, services and resources provided without reimbursement (or with partial reimbursement) to address community-identified needs and concerns, particularly those of groups who are underserved. Community benefit implies a partnership—a social contract, of sorts—between hospitals and their communities. This vision sees an active role for community partners in identifying community needs and assets and shaping the priorities hospitals choose to address. These programs can focus on a variety of issues impacting health equity—health care access through financial assistance or funding for free clinics, for example, or programs to increase access to healthy foods.

Then, hospital community benefit officers shared how hospitals are addressing health disparities:

• Vondie Woodbury of Trinity Health System, Mercy Health Partners and the Muskegon Community Health Project in Michigan shared how initial community efforts to increase access to care for the uninsured led to the creation of the Access Health Program, a community-based, non-profit cooperative that now partners with Mercy Health to provide access to a full range of services for small business employees who were previously priced out of the commercial insurance market. The program focuses significantly on educating members about healthy living and prevention. “First and foremost, we learned we had to democratize the [community benefit] system so that all of the voices in the community have a chance to shape what is happening. That’s been key to our success,” she said. Trinity hospitals also use a common enrollment form that asks questions to determine if patients are presumptively eligible for financial assistance, prescription drug help, food stamps, and a free vision program offered by a community partner. Trinity also sends outreach workers to visit patients who are behind on their bills and enroll them in financials assistance or Medicaid, rather than allowing their accounts to proceed to collections erroneously.

• In Sonoma County, California, the community benefit arm of Saint Joseph Health System takes a broad, comprehensive approach to address the social determinants of health, according to Dory Magasis Escobar. It deploys health promoters from the communities it serves to educate their friends and neighbors about healthy behaviors and available services, as well as sponsoring free services through community clinics. But it also teaches community members how to relate to systems of power in order to effect change. For example, the health system trains community leaders to respond to neighborhood concerns; participates in community coalitions; and engages in advocacy at the local, state, and federal level on issues that impact vulnerable members of its community.

While these hospitals are stellar examples, advocates can still make progress when local hospitals aren’t as inclined to partner with the community. “Be persistent,” said Claudia Lennhoff of Champaign County Health Care Consumers, an Illinois organization that first approached hospitals about improving financial assistance and debt collection policies. “We started out as adversaries because they wouldn’t meet with us. We were able to move that to a very different place and recently worked together to increase dental access in our community.”

Good News Is (Potentially) on the Way
While hospital leadership plays a major role in determining community benefit programs, the Affordable Care Act also includes some new requirements that can help public health and community advocates raise their concerns. Starting in 2012, all tax-exempt hospitals will have to engage in a “community health needs assessment” and plan implementation strategies that take input from public health experts and community representatives. And while the final rules are still being written, the most recent document put out for comment by the IRS includes a substantial role for grassroots leaders and community members. (Community Catalyst submitted comments on this document.)

While it pays to understand the issues policymakers will be wrestling with in the coming months, community benefit planning processes should be underway in most hospitals. Health equity advocates should ask for a seat at the table, no matter where their hospitals are in the planning process. After all, we share a common vision for communities that promote the health of everyone.

- Jessica Curtis, Project Director, Hospital Accountability Project

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Two Steps Forward, One Step Back on Hospital Transparency

Tuesday, July 5th, 2011

Last month, we told you about the public availability this year of critical information on hospitals’ Schedule H tax forms regarding their billing, financial assistance and community benefit programs. However, three weeks ago, the IRS announced that it is weakening transparency around hospital financial assistance and community benefit programs for this year by making hospital-specific reporting on financial assistance and community benefit programs optional for the 2010 filing.

The Squeaky Wheel
As we’ve described, the revamped Schedule H asks every non-profit hospital a series of simple yes or no questions about their compliance with the new ACA requirements. More than a year after the passage of the ACA, these questions should be easy to answer. In fact, let’s take a look. (For those of you with a deep love of all things taxes—and really, isn’t that most of us?—the relevant section is Part V, Section B.)

Here’s Question 13, which asks about how the hospital made the public aware of its financial assistance policy:

Schedule H question 13

There is widespread agreement among advocates and many within the hospital industry that these basic steps to notify the public about financial assistance should be part of a hospital’s standard practice. The following questions build on this by asking hospitals whether their debt collection policies allow aggressive tactics to be used and, if so, what steps the hospital takes to notify patients directly about financial assistance.

Simple, right? Sadly, a number of national and state hospital associations — including the American Hospital Association and associations in California, Florida, New York, Illinois, Massachusetts, and Ohio – do not agree that individual hospitals should be required to respond to these questions. They wrote a letter to the IRS recently saying these new reporting requirements are “onerous and redundant”. They also write that the questions go beyond what the ACA requires.

We disagree on both counts. But, perhaps as a result of their complaints, these questions have been made optional for the 2010 tax year. This could be the first step down a slippery slope to strip the ACA requirements of any real power.

What Does This Mean?
This change in IRS policy indicates a couple of things:

  1. Certain (but certainly not all) segments within the hospital industry are currently using their considerable power to actively stop the implementation of these consumer protections;
  2. Regulators are not considering the impact that these provisions—and a lack of transparency about them—could have on community members.

We need to be clear here: We know and work with a number of great hospitals and hospital associations whose staff believe in the mission of serving low- and moderate-income people, who go far beyond what Schedule H or the ACA require on financial assistance and community benefit. Many of them are working with advocates and communities around the country to offer financial assistance, protect Medicaid, and develop innovative approaches to improving community health. The new ACA requirements aren’t about these hospitals. They’re already doing the right thing. The ACA requirements – and Schedule H reporting – are about the hospitals that have fallen behind.

Consumers — especially vulnerable populations — will suffer because information about these programs isn’t publicly available. We have all learned, time and time again, that enforcement and oversight is key to making sure protections are real for patients. While this is a federal policy issue, the impact is going to be felt close to home—in local communities whose hospitals decide not to report this information and/or are not substantially changing their practices in accordance with the ACA.

What Can We Do?
Recently, Community Catalyst sent a letter to the IRS, Treasury, and the Department of Health and Human Services outlining our disappointment with their recent announcement and calling again for strong, consumer-friendly rules and guidance for these hospital programs. We’re calling on policymakers to hold the line on transparency in the years to come—and to issue regulations that protect consumers this year.

But we can’t do this alone. The advocacy community must unite to send a strong signal to the IRS, Treasury, the public and hospitals. We need to let the IRS know that it isn’t just about too much or too little reporting and “administrative burden.” This is about families and people suffering real harm because of inadequate oversight, poor practice, and lax standards. It’s about creating healthier, more financially secure communities.

The summer is a perfect time to ask your local hospitals what they are doing to implement these portions of the ACA. And, it’s a great time to start spreading the word about the new protections to consumers and patients themselves. After all, if they don’t know what the law does for them, they won’t know what they stand to lose.

– Jessica Curtis, Project Director, Hospital Accountability Project

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Does Your Local Hospital Make the Grade on Community Benefit? Now There’s a Way to Tell

Thursday, May 12th, 2011

This year, the public will have unprecedented access to critical new information about how hospitals in their communities fulfill their obligations to the people they serve.

For the past several years, there’s been a need for a well-defined standard by which to judge how well local hospitals support, engage, and invest in the broader health of their communities. Because so many people lack adequate health insurance coverage, this debate has primarily centered on the lack of transparency in how hospitals provide charity care, their methods for billing and collecting on past-due accounts, and the impact of both on access to care in their communities. Many states require minimal reporting on charity care or billing, and often those reports aren’t public.

That is slowly changing, thanks in large part to the Internal Revenue Service (IRS). As the federal agency charged with overseeing federal tax-exempt status, it has a particular interest in understanding whether non-profit hospital behavior on billing, charity care, and related activities is up to snuff. In 2008, it introduced a new mandatory reporting form, Schedule H, that asks non-profit hospitals a series of pertinent questions such as: Did Hospital X have a charity care policy? If so, how did it determine who was eligible, and how did it let patients know such programs were available? How did its billing and collections policies — if it had them — apply to patients who qualified for financial help?

These hospitals have to publicly report not just how they’re spending on community benefit and charity care, but also how much with regard to their total expenses. And that’s where things have gotten interesting.

Short of the Mark: Investigation Shows a Wide Range in Practices
Schedule H data is just becoming available this year, and it’s already being evaluated by industry insiders. A recent survey by Modern Healthcare Magazine found that nine out of 10 hospitals devote less than five percent of their total expenses to charity care — the average amount reported is just 2.5 percent of all hospital expenses. The findings, which are the result of the magazine’s analysis of Schedule H tax reporting of 156 hospitals from 20 large health systems, are detailed in the article Short of the Mark.

The study also draws attention to how hospitals reported the amounts of bad debt they attributed to patients who are unable to pay and fall within the hospital’s charity care guidelines. For community groups and advocates, this data is telling. A high number can signal that hospitals’ processes for identifying and qualifying patients for charity care are lacking, or that hospitals’ standards for eligibility in charity care programs don’t match the demographics of their communities.

So how did hospitals in the sample stack up? Eighty-three of the 156 hospitals reported that none of their bad debt could be traced back to patients eligible for charity care — a good outcome that indicates hospitals made efforts to ensure qualifying patients received charity care. By contrast, 12 hospitals said that at least half of their bad debt costs are made up of bills sent to consumers who would be considered eligible for charity care; some hospitals, like BJC Healthcare, reported that 81 percent of its bad debt could be attributed to patients qualifying for charity care.

Why this matters in a Post-ACA World
Why should people care how much charity care their local hospital is providing? With the Affordable Care Act law of the land, isn’t this an issue for a pre-health reform world?

On the contrary. For one thing, most of the coverage protections in the ACA don’t get phased in until 2014, leaving the approximately 50 million uninsured Americans vulnerable to medical debt. A study released this week by the Department of Health & Human Services showed that most uninsured families can’t pay hospital bills: On average, they can only afford to foot the entire bill of approximately 12 percent of hospital stays. Furthermore, while the ACA makes great progress in covering millions of currently uninsured Americans, not everyone will be covered. Affordability exemptions, immigration status, and enrollment considerations will all play a role in a continued uninsurance rate, even after full implementation. Even then, some newly insured may find it difficult to afford their health care-related costs, making them technically under-insured. This can lead to hospital bills and other kinds of medical debt that can follow a person for years. These populations will still rely on some form of charity care, so it’s critical hospitals get it right.

Second, Schedule H interfaces with the ACA in several key ways. We’ve written before that the law draws a new line in the sand for non-profit hospitals. To qualify for tax-exempt status, hospitals must provide a range of benefits to patients including charity care (now called “financial assistance”) policies and community benefit plans that engage their communities. Schedule H, though new, has already been adjusted to account for the new rules for Tax Year 2010. This time next year, a hospital will also have to report the steps it’s taken to qualify patients for charity care before it sends them to collections. That’s new, courtesy of the ACA, and it’s a powerful starting point for community members who may want to work with the hospital on improving its practice.

Third, non-profit hospitals benefit considerably from community investment. The Joint Committee on Taxation estimates that non-profit hospitals receive $12.6 billion per year in local, state, and federal tax exemptions. In return for this transfer of revenues from taxpayers, non-profit hospitals are expected to provide some benefit to their communities, including charity care. By making more information publicly available, Schedule H gives hospitals opportunities to broadcast what they are doing to “repay” that investment. It also gives communities unprecedented insight into hospital budgeting, prioritization and policies on debt collection, billing, and financial assistance, seeding questions and informing community partners’ conversations with their local hospitals.

What can advocates do?
The results of the Modern Healthcare survey, combined with new data from HHS about what the uninsured can afford to pay, are troubling. These reports demonstrate that there are critical gaps between what some communities need and what hospitals provide. However, the hospitals that are doing the right things are to be commended, and their practices should stand as a model for others.

Whichever end of the spectrum a community’s hospitals are on, the Schedule H provides advocates with unprecedented access to information and, therefore, critical opportunities to engage. Hospitals that are leaders in this area should be open to hearing from the community about ways that their programs can be tailored and enhanced — especially now that the ACA requires hospitals to regularly assess their communities’ health needs and to seek input from community members and public health experts in the process. Hospitals that have some work to do in this area may benefit from the same consumer input.

Consumer advocates are uniquely positioned to facilitate hospital-community discussions, to help identify areas of common ground and negotiate areas of disagreement, and to play a watchdog role where necessary. Over the next few months, Community Catalyst will offer more information and resources for groups who are interested in working more directly on community benefit issues.

In the meantime, though, we want to hear from you: Have you looked at your local hospitals’ Schedule H? What have you found, and what information would be most helpful to your work in the near future? Please feel free to email Hospital Accountability Project Director Jessica Curtis with responses (jcurtis@communitycatalyst.org).

– Jennifer Lemmerman, Field Coordinator

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In Washington and Beyond, It’s Go Time for Keeping Hospital Patients Safe

Monday, April 25th, 2011

“[The doctor] literally grabbed me by the hand and took me out into the hallway. He said, ‘Your mother is very sick. Her health is failing.’ I said, ‘Sir, it’s not her blood levels. It’s whatever she has caught in this hospital.’ He said to me, ‘Look, do you think I’d just discharge your mother to let her die in a nursing home?’ And I said, ‘Yes, sir, that’s exactly what I think you are doing.’” The doctor left without another word about discharge. […] My mother’s life was far too valuable to have ended this way.”

- Reverend Sally Jo Snyder, Pennsylvania Campaign for Better Care

By now, our readers may have heard about the recent launch of the Obama Administration’s Partnership for Patients: Better Care, Lower Costs (the Partnership), a new public-private initiative aimed at improving care quality and coordination. But did you also know about the Healthy Hospital Initiative? It’s the other new kid on the block — courtesy of the Campaign for Better Care — and it’s working to make sure this new effort to improve care goes down with adequate community representation and patient perspectives. Here’s the skinny on both efforts and what they might mean for your community.

First, the Facts
Past data shows that almost one in every 20 patients will experience an infection related to their hospital care. That’s about 1.7 million people nationwide. Of those, almost 100,000 people will die as the result of a medical error this year. Older Americans are even more susceptible: One of every seven Medicare beneficiaries is harmed in the course of their care, and one in five Medicare patients discharged from a hospital will be readmitted within 30 days, due partly to lack of appropriate coordination and support for people transitioning into rehab or other facilities. The cost to Medicare for readmissions alone runs upwards of $26 billion every year.

We can’t afford to pay for this kind of care. And as patients and community members, we shouldn’t accept exposure to infections and poor care as an unavoidable risk within our health care system.

The Partnership for Patients: A Smart Move in the Right Direction
Fortunately, the Partnership takes several steps to address these problems.

First, it will work with stakeholders — including patients, community groups and advocates — to lower the rates of preventable hospital-acquired conditions by 40 percent and hospital readmissions by 20 percent, all by 2013. (Not coincidentally, the Affordable Care Act includes provisions that will reduce Medicare payments to hospitals for hospital-acquired infections in the coming years. The Partnership will give hospitals an opportunity to take early steps to improve care and skirt financial penalties.) As an initial step, HHS is looking for hospitals, employers, payers, community groups, state and local government officials and others to sign a pledge to improve care coordination and quality.

But there’s more. HHS is currently accepting applications on a rolling basis for the Community-Based Care Transitions Program (CCTP) a new Medicare demonstration project authorized by the ACA. To apply for some of the $500 million in CCTP funding, acute-care hospitals have to partner with community-based organizations, such as area agencies on aging, that offer care transition services and include adequate consumer representation on their governing boards.

The Healthy Hospital Initiative: Demanding Better Care at the Bedside and Beyond
The Partnership is an important step to improving care and quality. But it’s not the only step. And it certainly won’t reach its full potential without engaging communities, patients and families to collaborate with and — where necessary — hold hospitals, providers, and government accountable for achieving Partnership goals.

That’s why we, along with other state and national organizations involved with the Campaign for Better Care , decided to launch a Healthy Hospital Initiative. We’ll build on the new federal initiative to ensure that patients, family members, and communities have the tools they need to participate fully in the Partnership and to push the envelope with providers and others, when necessary. Over the coming weeks, the Healthy Hospital Initiative will be rolling out more tools to help community groups gear up for this level of involvement.

How You Can Become Involved
What can you do right now to support the Partnership for Patients?

  • – Link up with the Healthy Hospital Initiative.
  • – Identify families in your networks who’ve been harmed by hospital-acquired infections, and let them know how their stories can be powerful tools to increase awareness about the need for these new programs.
  • – Sign the Partnership pledge, and encourage local hospitals and providers to do the same. To see a list of the hospitals and others that have already pledged in your state, check out the Partnership map and database.
  • – Reach out to your regional HHS director to find out more about local or regional efforts to build the Partnership, and offer to get involved.
  • – Learn more about patient safety.
  • – Reach out to hospitals and other providers in your area about developing a proposal to participate in the Community-Based Care Transitions Program.

– Jessica Curtis, Policy Analyst, Integrated Care Advocacy Project

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Websites like wine: healthcare.gov good now, getting better

Friday, July 2nd, 2010

HealthCare.gov: Take health care into your own hands Learn MoreThe web portal Healthcare.gov (@healthcaregov for all you twitterheads out there) went live, launching ahead of its July 1 deadline by hours Wednesday night. HHS deserves props for this site: not only was it delivered ahead of schedule, but it’s spiffy-looking, easy to use, and full of important info to help people get covered.

The website is what it says – a door through which consumers can check out what private insurance plans are available to them, depending on their age, state, current coverage, and health conditions.  There’s also information about public programs, like Medicaid, and how reforms in the new law affect people soon – such as the small business tax credit, high-risk pools for people with pre-existing conditions, and the ability of young people to join or stay on their parents’ plan till age 26.

If you haven’t checked it out yet, you should. We did a walk-through ourselves yesterday and were impressed by the clear, appealing design, the plain-language navigation to help consumers find out what their options are and, oh yeah, all that information.

In October, a more in-depth version will launch, and will include rates, coverage exclusions and other pricing information—a level of detail we think is critical for consumers looking for insurance options. To our mind, the more information, the better. And we’d like to see the portal move toward standard benefit descriptions that help people make “apples-to-apples” comparisons.

Other things we’d like to see on Healthcare.gov?  We think the website should include all private insurance products, such Medicare Advantage and Medigap plans. Right now, it doesn’t.

And it would be great instead of just describing and giving contact info or redirects to public programs, like state Medicaid agencies, if someone visiting the website could determine whether they were eligible and if so, enroll online.  Downloading an application, printing it out, finding out where to submit it, and getting there is often too many steps in a process that could be moved online. A report by the Urban Institute in January showed that there are 9.8 million uninsured individuals who are eligible for but not enrolled in Medicaid, and a one-stop online enrollment platform on the portal makes a lot of sense to help those people get health care coverage.

We’re glad to see that patient protections in the new law – what the administration’s calling the “patient bill of rights” – are prominent and spelled out clearly on the site.  In the future, we’d like healthcare.gov to point to consumer assistance programs, too, especially non-profit ones, which have a great track record of helping people navigate the system, determine eligibility, and enroll.

And for consumers with medical bills, we also want to make sure that the portal makes hospital financial assistance policies available, prominent, and easily searchable on healthcare.gov. We’re encouraged that there seems to be placeholder language about free and reduced care where more specific policy information will go in the future

Certainly there is room to refine and build. But this is day two. And improvements are already underway. In fact, a banner stretched across the top of every page says “Health care is getting better. So is HealthCare.gov. Help us improve by adding your comments”—this thing is a work in progress. But it’s also a work of progress, one we’ve proudly bookmarked.

–Kate Petersen, Health Policy Hub

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The AHA and charity care provisions: Against them before they were for them

Friday, May 14th, 2010

Last week, we talked about the new requirements in national health reform for nonprofit hospitals to provide and make public charity care as a condition of their federal tax-exempt status:

•    Having a written financial assistance policy that clearly spells out eligibility criteria and how to apply
•    Taking steps to notify the public about financial assistance
•    Limiting charges to patients who qualify for financial assistance
•    Making a “reasonable effort” to determine whether patients qualify for charity care before engaging in extraordinary collections activity.

See Community Catalyst’s summary of hospital provisions for the entire list.

The  American Hospital Association’s position on these provisions—and the need for them—has been a moving target during the health reform debate and since.

The AHA has long maintained that voluntary standards were sufficient to make sure hospitals were doing all of the above.  Our report, Best Kept Secrets, blows a hole in that theory: as of late summer 2009, the majority of hospitals surveyed by The Access Project didn’t meet the standards that are now federal law.

But those findings didn’t fit with the story of compliance told by the AHA, which called Best Kept Secrets “out of sync with field practices and the new health reform legislation” (AHA News, May 5, 2010), and criticized reporting requirements the IRS imposed on nonprofit hospitals last year:

The concerns at the heart of [Best Kept Secrets] have been dealt with in the health care reform bill, which we supported.” – Melinda Hatton, AHA General Counsel, (Kaiser Health News, May 5, 2010)

But the AHA did not support these provisions in reform—in fact, it tried to kill them. [From a letter to Congressional leadership Jan. 7, 2010]:

The AHA does not believe that the new requirements for charitable hospitals and their ability to maintain tax exemption in the Senate bill are necessary, and we urge the conferees to remove these provisions from the final health reform conference report.

Not all hospitals worked to  squelch the charity care provisions. In fact, the Catholic Health Association and Alliance for Advancing Nonprofit Healthcare supported them (See this Modern Healthcare piece).

And despite the AHA’s very powerful opposition – and its revisionist version of history– the provisions made it into the bill.

That’s the first step. The next one is making sure they are implemented and enforced. State advocates in California and Pennsylvania, where similar laws currently exist, have found that monitoring is necessary to ensure compliance.

On the federal level, implementation means making sure the IRS puts robust requirements in place through regulation and guidance. (Read and sign-on to Community Catalyst’s letter to the IRS.)

At the state level, that involves comparing the federal law to existing state law and pushing for stronger state oversight and requirements, and/or working with hospital institutions to help bring them into compliance.

–Jessica Curtis, director, Hospital Accountability Project

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Charity Care: Still A Hospital’s Best Kept Secret?

Friday, May 7th, 2010

Back in 2005, [Manny] Lanza was diagnosed with arteriovenous malformation, a serious brain condition. He had been working 50 hours a week at a fast food restaurant, but his job was considered part-time and his employer did not offer him health insurance. He was referred to St. Luke’s-Roosevelt Hospital in Manhattan for treatment, where they reportedly refused to perform a needed procedure unless he was insured.

Manny’s family attempted to enroll him in Medicaid, but the delay in treatment proved deadly. In 2005, at the age of 24, Manny died in his bedroom at home from causes related to his brain disorder.” (full article here.)

At the time Manny died, New York hospitals were receiving $1 billion every year from the state to care for uninsured and underinsured patients. But there were no conditions attached to that money—they didn’t have to offer free or discounted care to actual patients, and they didn’t have to tell them about financial assistance.

Manny’s Law, passed in 2007, now requires New York hospitals to notify patients of charity care upfront.

Non-profit hospitals get tax breaks, and they’re expected to provide “benefit to the community”—including charity care—in return.

But despite Congressional investigations, a prevalence of stories in the press, and similar laws in a handful of states, a new report released this week from The Access Project and Community Catalyst shows non-profit hospitals still failing to inform patients in need about charity care.

Congress, in the recently-passed federal health care reform law, inserted a provision requiring non-profit hospitals to establish clear financial assistance policies—in writing—that specify eligibility criteria and widely publicize these policies. It also prohibits hospitals from taking extraordinary collection actions before making a reasonable effort to determine if patients are eligible for financial assistance

That’s good news for people who find themselves in Manny’s position: uninsured or underinsured, needing health care they know they can’t afford.  But is the problem solved?

Our report suggests it isn’t. The Access Project wanted to know whether patients who needed hospital care and weren’t able to pay could easily find information about charity care.

Using hospital websites and phone calls, researchers surveyed 99 randomly selected non-profit, AHA-member hospitals in the summer of 2009 to see whether hospitals were complying with the AHA’s voluntary guidelines on hospital charity care. Did hospitals:

  • –Make information on hospital-based charity care policies and other known programs of financial assistance available to the public?
  • –Communicate this information to patients in a way that is easy to understand, culturally appropriate, and in the most prevalent languages used in their communities?
  • –Have understandable written policies to help patients determine if they qualify for public assistance programs or hospital-based assistance programs?

The results were pretty grim. Though 85 hospitals mentioned the availability of charity care, fewer than half of these (42) provided application forms, and only about a quarter of the hospitals (26) provided information about who qualified for charity care. Moreover, only about one-third (34) provided information in a language other than English.

And that’s just one survey. From California to Texas to North Carolina, surveys show that hospital notice and provision of charity care is uneven. While it’s true many hospitals do exemplary work to reach out and meet community needs, others just aren’t pulling their weight.

The new requirements for non-profit hospitals go into effect this year.  But given these results, it seems like hospitals have a long way to go to comply.

(Next week, we’ll look at the hospital industry’s response to the report.)

–Jessica Curtis, director, Hospital Accountability Project

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