Charitable Hospital Lawsuits

Guidelines cover five rules for charity care, collections

Responding to the lawsuits against charitable hospitals, the Hospital & Healthsystem Association of Pennsylvania (HAP) recently provided its member hospitals with a comprehensive set of guidelines addressing charity care, financial aid, and collection practices. The guidelines emphasize that compassionate patient care must always trump the need to be paid.

HAP president and CEO Carolyn F. Scanlan explains that the guidelines incorporate key elements of Act 77 of 2001 (Tobacco Settlement Act) and Act 55 of 1997 (Institutions of Purely Public Charity Act), as well as federal tax exemption requirements. "Hospital care and hospital financial practices are fraught with complexity," she says. "These charity care guidelines provide Pennsylvania hospitals with another tool to help them implement policies that are easily available to, and understood by, their patients and communities."

The charity care guidelines flow from five key principles articulated by HAP’s CFO Advisory Group, Committee on Public Payor Policy, Trustee Leadership Steering Committee, and Board of Directors. Scanlan suggests that, for any hospital leaders worried about being accused of the same practices outlined in the recent lawsuits, adoption of these guidelines could be a good first step toward ensuring you’re on track:

1. Concern over a hospital bill will never prevent any individual from receiving emergency health services. Hospitals will communicate this message clearly to prospective patients and to local community service agencies, and make it clear that essential services will be provided without regard to ability to pay.

2. Hospitals will assist patients in obtaining health insurance coverage from privately and publicly funded sources whenever appropriate.

3. Hospitals will have charity care and financial aid policies and practices that are consistent with their missions and values, and with federal and state law, and that take into account each individual’s ability to contribute to the cost of his or her care, as well as the hospital’s financial ability to provide the care.

4. Financial aid policies will be clear, understandable, and communicated in a manner that is dignified and in languages appropriate to the communities and patients served. These policies will be made readily available to prospective and current patients and to the community at large.

5. Debt-collection policies — by both hospital staff and external collection agencies — will reflect the mission and values of the hospital, and will be monitored carefully to avoid unintended consequences.

The complete guidelines also provide hospitals with tips for updating their financial aid policies; developing plans to communicate such policies to patients; identifying appropriate staff to administer the policies; and administering the policies fairly, respectfully, and consistently. The HAP document, Charity Care and Financial Aid Guidelines for Pennsylvania Hospitals, is available for download at