Stung by bad publicity, hospitals alter practices
Billing changes have little impact on bottom line
Many hospitals have adopted more generous charity-care guidelines for uninsured patients after a barrage of publicity about aggressive hospital billing and collection practices and a spate of lawsuits alleging hospitals overcharged uninsured patients, according to a health care policy expert.
Hospitals in more than 50 health systems across the country were named as defendants in class-action lawsuits alleging that not-for-profit hospitals charged uninsured patients full billed charges for care, when other payers, including private insurers, Medicare, and Medicaid, received large discounts from billed charges. Virtually all of the suits against hospitals filed in federal court have been dismissed without merit, but state court action is still possible.
Nonetheless, many hospitals have modified billing and collection practices for low-income, uninsured patients following a campaign by hospital associations to encourage hospitals to create formal policies for billing uninsured patients, the Center for Studying Health System Change (HSC) has found.
"Many uninsured patients are poor and unable to afford care, while others may have the resources to pay for their care, leaving hospitals the task of determining who is financially needy," says Paul B. Ginsburg, PhD, president of HSC. HSC is a nonpartisan policy research organization funded principally by The Robert Wood Johnson Foundation.
"What we found is that hospitals generally have adopted guidelines to help make those calls in a more organized and structured way," Ginsburg says.
The center’s findings are detailed in a new HSC issue brief — Balancing Margin and Mission: Hospitals Alter Billing and Collection Practices for Uninsured Patients— available at www.hschange.org. The study is based on site visits to 12 nationally representative communities: Boston; Cleveland; Greenville, SC; Indianapolis; Lansing, MI; Little Rock, AR; Miami; northern New Jersey; Orange County, CA; Phoenix; Seattle; and Syracuse, NY.
"In every community, most hospitals have either recently changed their pricing, billing, and collection policies or tried to improve the clarity of the information provided to patients," according to HSC research analyst Andrea B. Staiti, co-author of the study.
Staiti reports that among the findings of the study was the discovery that changes in billing and collection policies have had a negligible impact on hospital finances. Uncompensated care is comprised of both bad debt and charity care. Almost all of the hospitals interviewed that had adopted more generous charitable policies indicated expenses previously classified as bad debt have shifted to charity care write-offs, with little impact on hospital bottom lines.
Other key findings of the study:
- It is now common for hospitals in the 12 communities to provide charity care to uninsured persons with incomes under 200% of the federal poverty level, or $38,700 for a family of four in 2005, and offer sliding-scale discounts beyond this income threshold, in some cases up to 400% or 500% of the poverty level.
- The impact of more generous pricing or discounting policies on access to care for the uninsured remains unclear. Market observers in some communities believed that charity care is now easier to obtain and that hospitals’ efforts to better identify people up front who are eligible for charity care has helped patients and spared them the aggressive collection practices some hospitals used.
- However, hospitals in some cases have adopted more generous pricing policies but also have engaged in other activities to manage their payer mix that inhibits access to care for some uninsured. For example, some public hospitals now limit nonemergency care for uninsured out-of-county residents and are working to attract more insured patients.
For more information on the HSC findings, call (202) 484-5261.
Many hospitals have adopted more generous charity-care guidelines for uninsured patients after a barrage of publicity about aggressive hospital billing and collection practices and a spate of lawsuits alleging hospitals overcharged uninsured patients, according to a health care policy expert.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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