Hospitals still hedge on offering charity care

Not-for-profit hospitals are under some pressure to make their financial interactions with patients operate more smoothly, but many have yet to offer discounts to uninsured patients.

That's the conclusion of researchers at the University of Michigan's Institute for Healthcare Policy and Innovation, which found while most have clear charity care policies in place, many fail to thoroughly follow through on them. A recent study of the tax filings of more than 1,800 not-for-profit hospitals--published in The New England Journal of Medicine--concluded that only 29 percent offer uninsured patients discounts that match those negotiated by commercial insurers or the Medicare program. And only 42 percent notify patients about their eligibility for charity care prior to trying to collect payment for their bills.

Moreover, hospitals operating in the states that have yet to expand Medicaid eligibility under the Affordable Care Act (ACA) are also less likely to offer charity care than those in expansion states.

The U.S. Treasury Department issued regulations late last year requiring hospitals to make a reasonable effort to offer financial assistance to uninsured or underinsured patients before sending their debt to collections agencies. The changes were mandated by the ACA.

However, it has been suggested that hospitals have a significant amount of leeway to interpret and follow the rules, and that the Treasury Department and the Internal Revenue Service will have to be aggressive in enforcing the rules.

"Hospitals are generally complying with the part of the rules that require they establish charity care policies and publicize them, but this may not impact the amount of charity care they provide," said co-author Sayeh Nikpay of the University of Michigan and the University of California at Berkeley, in a statement. "So far, it appears many aren't complying with the part of the rules that could increase their charity care."

To learn more:
- read the study statement