Posts Tagged ‘charity care’

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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Posted in Hospital Accountability/Charity Care, national health reform | 1 Comment »

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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Health Reform and the Education of David Stockman

Monday, January 11th, 2010

You have to be of a certain age to remember David Stockman (fame being fleeting and all).  Back in 1980, Stockman was a young conservative Congressman from Michigan, a true believer in supply side economics, who became Ronald Reagan’s first OMB Director.  Stockman thought that he could shrink the federal budget by “curtailing weak claims instead of weak clients,” a phrase he coined at the time to allay fears that he would trim the budget on the backs of the poor.

But powerful entrenched special interests repeatedly thwarted his efforts to cut down on their federal gravy train, eliminating even the appearance of balance to the cuts the Reagan administration made to on federal assistance to the poor.  “The Education of David Stockman,” a candid 1981 portrait of his efforts and growing disillusionment that ran in The Atlantic Monthly, kicked up a political firestorm and landed Stockman in the Reagan doghouse. In the end, Stockman found out it was much easier to curtail weak clients after all.

Enter health reform.  In an effort to keep the cost of reform down, keep powerful special interests at the table and unable to agree on sufficient revenue sources anyway, Congress has deferred the start of most of the coverage provisions in health reform for three to four years. Mindful that this is a weakness in the proposal, both Congress and the Obama administration have been working to identify provisions that could begin to make a difference for people in the short-run without running up the price tag of the bill.  Most of what they’ve come up with is improvements aimed at helping those who are un- or under-insured as a result of a major medical condition.  Admirable as these provisions are, they’re no answer to the tens of millions of Americans who lack coverage not because of their health status, but because they simply can’t afford the premiums.

One exception is a little remarked-on provision that would require non-profit hospitals—recipients in billions of dollars in federal tax advantages—to be more transparent in their provision of charity care and set some modest limits on what hospitals can charge the uninsured (for instance, non-profit hospitals would be banned from charging the uninsured more than they charge the insured – a common practice now).  The provision, added by the Senate Finance Committee, has been non-controversial until now, but recently the powerful American Hospital Association has launched an effort to kill it.

In polling conducted by Lake Associates in November 2008, Community Catalyst found that an overwhelming majority of the American public support requiring non-profit hospitals to provide charity care to those who can’t afford it, be held to price regulations, and to communicate transparently with their communities about their policies–all provisions included in the Senate health reform bill. These are small measures with big impact, since charity care often means the difference between getting treated or going without for uninsured people with serious illnesses and conditions. The Institute of Medicine and other researchers have found that 20,000-40,000 people die every year from lack of coverage while millions more suffer from unnecessary illness and financial distress—facts cited on the floor by Congressional leaders to support reform.

And yet, the uninsured are still standing at the back of the line when it comes to reform. These mostly low-wage American workers are the very definition of a politically weak client group, but one with a powerful moral claim.  Will what little short-term protection that remains on the table for them survive the legislative sausage-making process, or will the lessons David Stockman learned once again hold sway?

–Michael Miller, director of strategic policy

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