TX legislators propose standard for valuing hospital charity care

A work group appointed by Texas legislators has proposed a standard for calculating the cost of charity care provided by the state's non-profit hospitals, with the idea of determining the actual value of such care. In doing so, they're jumping into a very volatile issue, as hospitals nationally are still debating how to get this done.

The proposal is designed to clarify how federal and state indigent-care funding is spent. Right now, it appears that these funds offset most of the hospitals' charity care and bad debt costs, but it's still difficult to track how well this system works, according to the group's draft report.

Right now, Texas hospitals use as many as six different formulas to calculate the amount of charity care they provide, some of which use "retail" prices used by hospitals rather than market rates, according to an article by the Fort Worth Star-Telegram.

One controversy emerging from the report: Within the text, the work group recommends limiting reportable charity care to people with incomes of up to two times the federal poverty level. This proposal upsets the Texas Hospital Association, which argues that the recommendation runs afoul of state law.

To find out more about this report:
- read this Kaiser Daily Health Policy Report piece

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