U.S. hospitals provided $45.9 billion in uncompensated care in 2012, according to the American Hospital Association, which published data on uncompensated care costs from hospitals across the country.
Uncompensated care comes from charity care, which hospitals provide to low-income patients with the expectation of federal and state reimbursement, and bad debt, which accrues when hospitals don't receive payment for services often because patients are unable or unwilling to pay their medical bills. The uncompensated care does not include unfunded costs of care, such as Medicare and Medicaid underpayments, according to the announcement.
The figures are up $4.8 billion from 2011, when hospitals provided $41.1 billion in uncompensated care, FierceHealthcare previously reported.
Data collected from the AHA's Annual Survey of Hospitals and presented in a fact sheet revealed that in 2012:
- Combined underpayments were $56 billion. This amount includes a shortfall of $42.3 billion for Medicare and $13.7 billion for Medicaid.
- Hospitals received 86 cents in payment for every dollar spent caring for Medicare patients.
- Hospitals received 89 cents in payment for every dollar spent caring for Medicaid patients.
- Sixty-nine percent of hospitals received Medicare payments less than cost, while 68 percent of hospitals received Medicaid payments less than cost.
Depending on their mission, geographic location and financial situation, hospitals budget for various levels of charity care, identifying who cannot afford to pay in advance of billing to determine whether an alternative source, such as a charity care fund, can pay for the patients' services, the announcement said.
Uninsured patients generate most of hospitals' bad debt, making it a component of hospitals' total cost of care to medically indignant and underinsured patients.