HHS secretary clarifies financial aid policies

Nothing prohibits discounts, AHA told

Recent guidance from the Department of Health and Human Services (HHS) recognizes that "a good-faith determination of financial need’ may vary depending on the individual patient’s circumstances and that hospitals should have flexibility to take into account relevant variables."

The guidance came as part of HHS Secretary Tommy Thompson’s response to a request from American Hospital Association (AHA) president Dick Davidson for the government to clarify and reduce regulatory barriers that make it more difficult for hospitals to assist patients in financial need.

Confusion still exists

While hospitals in 2002 provided $22.3 billion in uncompensated care, 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. In responding to Davidson’s request, Thompson said in part, "Your letter suggests that HHS regulations require hospitals to bill all patients using the same schedule of charges and suggests that, as a result, the uninsured are forced to pay full price for their care."

"That suggestion is not correct," Thompson continued in the letter, "and certainly does not accurately reflect my policy. The advice you have been given regarding this issue is not consistent with my understanding of Medicare’s billing rules."

To eliminate further confusion on the matter, he goes on to say, he directed the Centers for Medicare & Medicaid Services and the Office of Inspector General to prepare summaries of the policy. "This guidance shows that hospitals can provide discounts to uninsured and underinsured patients who cannot afford their hospital bills and to Medicare beneficiaries who cannot afford their Medicare cost-sharing obligations," he stated, adding, "Nothing in the Medicare program rules or regulations prohibits such discounts."

More information is available at www.hhs.gov and at www.aha.org