AHA tries to undermine charity care rules

I've been examining the tax returns of not-for-profit hospitals in California for a semi-annual report I write on CEO compensation, and it's heartening to know the shockwaves from the Great Recession never reached their pay.

Compensation is up about 20 percent between 2008 and 2010, even as their facilities were flooded with millions of patients who lost health insurance when their jobs evaporated. One CEO--and prominent player in American Hospital Association affairs--saw his take-home go up by $1 million a year.

Of course, when you spend all that money trying to please your top talent, something has to fall by the wayside. And according to the AHA, it's informing underinsured or uninsured patients about what their options might be when it comes to charity and discount care.

That was the gist of a letter the AHA sent to the Office of Management and Budget last month. Although the AHA said it "is fully committed" to ensuring patients pay a fair sum and aren't subject to aggressive collection practices, it is asking for "flexibility" on the community needs assessments and patient finance requirements included in the Affordable Care Act.

Why? It turns out the hospitals, which each year perform hundreds of millions of complex procedures, process billions of claims to Medicare and private insurers, order tens of billions of dollars of supplies, and cook and serve hundreds of millions of meals to both patients and their families, cannot spare the time to figure out the right methods for charging uninsured and underinsured patients and communicating to them their payment options.

Based on a survey of its members, the AHA estimated this task could take a minimum of 250 hours and up to 2,000 hours or more a year. Of course, that would require the really big hospitals to hire as many as a single full-time employee. And perhaps even a part-timer.

That letter, by the way, was penned by AHA General Counsel Melinda Reid Hatton, a single full-time employee herself who happens to be compensated to the tune of about $700,000 a year the association. Given the dubious one-and-a-half page workflow list that accompanied the letter she sent to the OMB (which didn't even bother to allocate estimated hours of work for each task) it's a tad doubtful she earned her pay for that bit of correspondence. But then I have to remind myself she's not among the AHA's five highest-compensated employees, either.

Oh, in addition to the time requirements being too onerous, the AHA also wants flexibility in the formulas to be used in determining the sums patients owe. "The proposed regulations allow hospitals a choice of only two methods for calculating an amount that can be charged to an (financial assistance policy)-eligible individual and preempt the use of methods authorized under state law that could be superior," the letter observed.

I wonder if the law in North Carolina would be considered superior, where hospitals have sued more than 40,000 of their patients in recent years for payment. Or maybe Minnesota law is superior, where until Accretive Health recently agreed to exit the state after being called out by Attorney General Lori Swanson, it was routinely steamrolling patients for payments before they even received care.

No doubt there will be eye-rolling aplenty at my thoughts, accompanied by mutterings about my political agenda.

However, when you have seen as many not-for-profit hospital execs as I have earn high six-figure and seven-figure salaries while reading a multitude of reports about how they keep their financial assistance policies more secure from their patients than the drugs in their pharmacies, I do my share of muttering as well. This most recent move from the AHA is just another stab at maintaining that status quo.

Forbes just made an interesting observation regarding the ongoing not-for-profit status of hospitals: It noted many may find their status in danger once the bulk of the ACA takes hold after 2014, since so many more of their patients will have insurance coverage. As a result, hospitals may have to completely overhaul their charitable mission to satisfy state and federal regulators.

"Redefining that mission might mean taking money that was going to go to build a new patient tower and instead providing free preventive health services, funding biomedical research, or pursuing some other charitable endeavor," the magazine observed.

That's certainly an option for hospitals to pursue. I just hope it doesn't bury them in work. - Ron (@FierceHealth)

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