Access reaction is varied as government calls for discounts to uninsured patients
Some hospitals clarifying policies, educating staff
Encouragement from the Bush administration for hospitals to give discounts to uninsured patients and financially needy Medicare beneficiaries will have little impact, say some access professionals surveyed by Hospital Access Management, mostly because hospitals already give such discounts under the name of charity care and uncollectible bad debt.
Others say they will fine-tune their financial aid policies in view of the recent focus, while a veteran health care attorney suggests the government’s announcement should be taken quite seriously by hospitals.
"This is a high-focus issue," says Michael Taubin, a partner in the law firm Nixon Peabody LLP in Garden City, NY, and longtime legal counsel to the Washington, DC-based National Association of Healthcare Access Management, as well as a number of individual hospital clients. "Almost every hospital I deal with is dealing with it right now."
Tommy G. Thompson, Secretary of Health and Human Services (HHS), explained the administration’s position in a February letter to the American Hospital Association (AHA), which had requested a clarification of whether such discounts are permissible in view of federal fraud and abuse laws.
While hospitals in 2002 provided $22.3 billion in uncompensated care, AHA president Dick Davidson said in a letter to Thompson, "confusion about federal regulations makes it difficult for hospitals to know whether there are risks to lowering or waiving patients’ bills."
Hospitals have come under criticism in the last two years for charging uninsured people much more than they charge people with employer-sponsored health insurance. Group health plans often negotiate rates lower than the prices charged to people without insurance.
In addition to Thompson’s comments, the HHS Office of the Inspector General (OIG) offers guidance on its web site at www.oig.hhs.gov.
Peter A. Kraus, CHAM, business analyst for patient accounts services at Emory University Hospital in Atlanta, says his first response to the government’s announcement is that "hospitals have always given discounts to financially needy patients under the name of charity care and uncollectible bad debt."
In addition, Kraus continues, "some hospitals offer prompt-pay discounts to uninsured or underinsured patients who pay their balances within a specified time period. Other facilities work out low or no-interest time payments with nonindigent, low-income patients who make honest efforts to pay their bills."
"In other words," he adds, "some hospitals have always practiced what the Bush administration is preaching."
As for the HHS statement that hospitals charge self-pay patients more than insured patients, Kraus contends that such allegations are "at best, improperly phrased."
"Hospitals enter into contracts with third-party payers, Medicare included, in which they accept levels of reimbursement that are substantially less than full charges," he points out. "Contracts usually stipulate that at least a portion of the difference may not be billed to the patient, although certain agreed-upon noncovered charges or percentages can be."
"While self-pay patients don’t enjoy the benefits of contractual write-offs," he adds, "neither do they generate the volume of business that allows hospitals to maintain fiscal solvency in spite of the write-offs they routinely take."
Beth Keith, CHAM, director of patient business services at Touro Infirmary in New Orleans, points out that it’s important to understand that the "clarification" from Thompson is just that.
"Touro has employed the exact same principles for uninsured, underinsured, and Medicare patients for many years," she notes. "Basically, anyone who indicates a problem with paying their bill is offered the opportunity to apply for financial assistance through the hospital."
Keith’s understanding of the HHS clarification, she says, is that it directs hospitals to provide almost the same options that Touro has offered for many years. "For us, this has very little impact."
At Touro Infirmary, she explains, access employees verify family size and household income, and if the income does not exceed 175% of federal poverty guidelines and the patient does not qualify for government programs, he or she is eligible for the Touro program.
"If it appears they are eligible for a government program, we ask that they complete that application process before a determination is made," Keith says. "This process is applied regardless of payer and has always been an option under the law."
Once the person is qualified, she adds, the entire bill is written off.
Gillian Cappiello, CHAM, senior director of access services and chief privacy officer at Swedish Covenant Hospital in Chicago, says that while her hospital has always felt that it was able to offer discounts, and has done so, the new directive "does help clarify" the government’s position.
"We already had written procedures for what to do if a patient is self-pay, where to guide them, but [the announcement] just raised everyone’s level of awareness," she notes. "Our reaction is that we just want to make sure that anyone walking in to the hospital knows that [financial aid] is available."
In the wake of the increased attention on discounts and charity care, Cappiello says, Swedish Covenant launched a management awareness campaign to ensure that people in need of help were directed to financial counselors.
"We wanted to make sure all of our communication was consistent, [and] that if someone says, I don’t have insurance,’ they [are] not being sent to different people, but to the professionals for whom that is their job," she adds.
After the subject was highlighted in news reports, Cappiello notes, "people were starting to call local hospitals and challenge them [regarding financial aid policies]. Our concern was that someone would call, and not everyone would know how to direct that call."
As part of that effort, she says, information on financial assistance was added to existing notices about privacy and protection of health information throughout the facility and at off-campus sites.
"What we did is [specify] that we offer assistance in paying for necessary medical services to eligible patients with limited financial means," Cappiello says, adding that the signs instruct patients to call Credit Services for additional information.
She mentioned an article in the publication Crain’s Chicago Business and on-line at Chicago Business.com about a lawsuit alleging predatory billing practices filed in late March against another Chicago health care organization by two former uninsured patients.
"That kind of article," Cappiello adds, "is one reason we wanted to make sure we have good signage and a consistent message given to anyone inquiring about our free care and collections practices."
Taubin says his experience has been that hospitals are becoming much more attuned to the government’s concern that "the uninsured be treated and not incur financial trauma as a result of hospital services."
The Hospital Association of New York has issued new guidelines for hospitals to follow in developing their financial aid policies, he notes.
"Many hospitals are looking to change their sliding scale fee schedules [to make them more generous] for patients, as well as allowing a larger class of patients to qualify," Taubin says. "They are also carefully looking at their billing and collection processes for the uninsured, both internally and externally."
That includes, he adds, making sure that adequate controls are placed on collections agencies so that patients "are not treated with disrespect or hit with a hefty bill that is inappropriate."
Hospitals are being alerted, Taubin says, to the fact that injustices have occurred in the past. "In some cases, I know that hospitals found that — without their realizing it — [unpaid accounts] were sent to collection agencies at levels and in amounts that didn’t take into context the sliding scale."
In other instances, he says, hospitals had such restrictive policies as to who would qualify for discounts that the community need was not addressed.
While agreeing that loosening financial aid guidelines could make things tougher for an already ailing hospital industry, Taubin says his advice is that "every hospital has to review its policies for charity for uninsured patients and to look to state associations for guidance as to the appropriate steps."
Kraus, meanwhile, says the bottom line on the government’s stated position regarding discounts for the financially needy is that "it’s really about politics."
"The Bush administration is vilifying what it hopes will be a plausible target with the voting public in order to deflect criticism that its policies do not address the growing number of uninsured in this country," he says. "Regardless of whether one thinks hospitals should do more to accommodate the needy, it is unlikely that such actions would resolve the root causes of the problem."
"In the grand scheme of things, Bush’s proposal is pretty trivial," Kraus notes. "But there is always the possibility that it will take on a life of its own and make things, at least temporarily, even more uncomfortable for the beleaguered hospital industry."