Do hospitals tell patients about charity care options? Study finds room for improvement

http://www.eurekalert.org/pub_releases/2015-10/uomh-dht102615.php

Public Release: 28-Oct-2015
Do hospitals tell patients about charity care options? Study finds room for improvement
As Affordable Care Act requirements take full effect next year, patients with no insurance or big bills should ask about available help, U-M team says
University of Michigan Health System

If you don't have health insurance, or your insurance coverage still leaves you with big bills, hospitals are supposed to let you know if you qualify for free or reduced-price care, and to charge you fairly even if you don't.

That is, if they want to keep their tax-free nonprofit status under the Affordable Care Act's new Section 501(r) rules.

But a new study from the University of Michigan Institute for Healthcare Policy and Innovation finds many nonprofit hospitals have room to improve.

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Only 29 percent of the hospitals reported they had begun charging uninsured and under-insured patients the same rate that they charged private insurers and the Medicare systems. Such rates are often far lower than the "chargemaster" rates hospitals set as the starting point for negotiating with insurers about how much they will actually accept.

Only 42 percent of the hospitals reported they were notifying patients about their potential eligibility for charity care before attempting to collect unpaid medical bills. The ACA requires such notifications to give patients a chance to explore their options, and apply to get some or all of their costs written off.

One in five hospitals had not yet stopped using extraordinary debt-collection steps when patients failed to pay their medical bills. Such steps, such as reporting patients to credit agencies in ways that can damage their credit scores, placing liens on their property or garnishing their wages, are now banned.

Hospitals in states that have not expanded Medicaid reported having less generous charity care policies, and were less likely to have a policy about notifying patients of charity care options before they left the hospital. In general, patients have to be poorer to get free or discounted care in these states than in states that have expanded Medicaid.

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Nonprofit hospitals are exempt from paying most taxes, which was valued at $24.6 billion in 2011. In return, they must justify their nonprofit status to the IRS each year by showing how much care they write off for those who cannot pay.

When Congress wrote the ACA, they sought to use the tax tools available to them to reduce hospitals' use of aggressive methods to pursue payment, and perhaps to prevent individual bankruptcies or credit score damage caused by medical bills.

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