Stark contrast between gross charges and charity care at hospitals

Pennsylvania's Crozer-Chester Medical Center is suing a low-income insured patient for more than $240,000 after treating him for strokes and seizures--a rate far higher than its costs, reported The Philadelphia Inquirer.

The suit against Robert D'Amicodatri, whose income is $890 a month from Social Security, raises questions about how hospitals calculate their costs, the Inquirer reported. The newspaper estimated that based on the average 85 percent discount Crozer gives to other payers on its gross charges and the payment it already received from D'Amicodatri's insurer, the bill should be slightly more than $35,000.

Other Philadelphia-area hospitals provide similar discounts. The Virtua Health system provided $237.4 million in charity care based on gross charges. But based on the system's estimated costs, the value of the charity care is close to $45 million, according to the newspaper.

Charity care costs are going up all over the coutry.  For instance, the Missouri Foundation for Health estimated hospitals wrote off $160 million in charges for charity care in 2008, a jump from $62 million in 2004, reported The Kansas City Star. Similarly, Maine hospitals doubled the amount of free care delivered during the past five years, with charity care totaling $190 million statewide in 2011.

Provisions in the Patient Protection and Affordable Care Act would outlaw hospitals from applying gross charges to uninsured or self-pay patients.

To learn more:
- read the Philadelphia Inquirer article
- here's  the Kansas City Star article

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