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Doing Enough Charity Care?

The healthcare industry has been center-stage for a number of months, with presidential candidates releasing plans to overhaul our nation’s healthcare system and media reports spotlighting the dire financial situations of individuals who either do not have insurance or have high deductible insurance plans as a result of medical emergencies or chronic problems. While calls for a solution only get louder, right here and now, healthcare providers are facing serious issues, operationally, financially, and in the court of public opinion.

Nobody can argue with the fact that hospitals, especially rural hospitals, are facing serious financial issues. According to Becker’s Hospital Review, (https://www.beckershospitalreview.com/finance/rural-hospital-closures-hit-record-high-in-2019-here-s-why.html) more than 100 hospitals nationwide have closed this decade, with approximately 600 more viewed as at risk of closing. Many of the 18 rural hospitals that shut down so far this year faced reimbursement issues and cited dwindling patient volumes as a reason they were forced to close.

Despite those worrying statistics, we’re seeing a different area of focus for regulators, lawmakers, and media outlets; it is the amount of charity or uncompensated care that hospitals are offering. One published report from The Washington Post (https://www.washingtonpost.com/business/economy/free-or-discounted-care-is-available-at-some-hospitals-but-they-dont-make-it-easy/2019/10/10/8ad4c540-e92a-11e9-9c6d-436a0df4f31d_story.html) came right out and accused some hospitals of not being forthright about letting patients know about charity care options. As part of the bargain for qualifying for non-profit status, non-profit hospitals are expected to provide free or discounted care to individuals who make less than the federal poverty limit, which is currently $25,750 for a family of four. Some hospitals offer discounted care to individuals who make more than that amount, too.

The report noted that 45% of non-profit hospitals are sending medical bills to individuals whose incomes would likely qualify them for charity care, according to an analysis of filings by the hospitals with the Internal Revenue Service. The report not-so-subtly hints that non-profit hospitals are trying to get individuals to pay the debt first, before making an offer to have charity care cover the costs. The report says that hospitals are not doing enough to advertise charity care and to inform patients about the opportunity to apply for it.

Hospitals know that they are providing information about charity care in a variety of ways, a number of which are dictated by section 501(r) of the Affordable Care Act. To them, it must seem inconceivable that a patient isn’t aware of the charity care options available to them by the end of their stay.

Nonetheless, some patient advocates argue that patients might overlook information about charity care during a medical emergency or might not properly understand the information available to them. In order to stay ahead of the call for more regulations, hospitals must address the fact that some patients might need someone to “hold their hand” in applying for charity care, as one hospital executive described it.

Hospital administrators understand that hospitals are viewed as more than just corporations. They are expected to be places of refuge, where nobody is turned away and everyone is given an opportunity to be healed. The quality or quantity of medical care isn’t supposed to be determined by the size of someone’s paycheck. The overwhelming majority of hospitals bend over backwards to treat their patients regardless of their ability to pay, but it seems that isn’t enough. They are clearly being told that they must do a better job of showing their commitment to provide charity care to those that (might) qualify.

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