WASHINGTON, Jan. 24 (UPI) -- State and local governments are considering laws that would force tax-exempt hospitals to earn their keep through stricter charity requirements and ensure that patients who could benefit know that help is available.
"There is a growing concern nationwide that perhaps hospitals aren't providing as much charity care as they should," Jennifer Tolbert, policy analyst at the Kaiser Family Foundation health policy research group, told United Press International. "Many hospitals have charity provisions on the books, but consensus is patients may not be being informed."
New York City Council Speaker Christine Quinn announced Sunday that her first legislative proposal will be a law requiring hospitals to tell low-income and uninsured patients about charity funding available for non-emergency care.
Similar laws being enacted in other states put more of an onus on hospitals to expand their charitable component and/or assure that financially struggling patients know that help is available.
Illinois Attorney General Lisa Madigan unveiled a proposal Monday that would require most tax-exempt hospitals to provide charity care equal to 8 percent of total operating costs, while a Massachusetts law requires that hospital bills include information about available financial help.
And in Texas, a new law requires tax-exempt hospitals to spend what they would have paid in taxes, or 4 percent of patient revenues, on charity.
Probably no recent law underscores more the notion that healthcare charity funds are only effective if people who need them know about them than the New York City Patient Information Act -- also called Manny's Law, after Manny Lanza, a young man who died of a serious brain condition after being denied care by hospitals because he did not have insurance.
Lanza's family probably would have qualified for assistance with hospital bills, but they were not informed that it was available.
"Manny Lanza's case highlighted a critical problem that simply must be addressed. For many patients, this is a situation of life and death," Quinn said. "We want all patients to know, especially those who are uninsured or underinsured, the forms of financial assistance that are available to them, which may help defer the costs of their medical care."
Hospitals are required by law to treat patients whose lives are in immediate danger, but not those who are suffering from long-term, life-threatening conditions.
New York state provides more than $800 million dollars per year to hospitals --$600 million of it in New York City -- to cover the cost of care for patients who can't pay their hospital bills, but it's not clear where those funds go, Richard Kirsch, executive of the activist group Citizen Action of New York, told UPI.
"It's uneven, but studies have shown that many hospitals do very little," he said, "and they certainly never make it easy (to access the charity funds)."
Hospitals should provide clear information about financial aid available during admissions on their Web sites and in their hallways, he said. Instead, some hospitals fail to inform patients about help available and then take measures to force them to pay fees, Kirsch said.
"Not only are people not told what help is available, they also get a bill much higher than insured people, and then they send a collection agency after you to get your money," Kirsch said.
The law proposed in New York City follows on the heels of a more comprehensive measure that would have required hospitals to forego aggressive collections techniques and report information about their charity work. The bill passed the state's lower house but died in the Senate earlier this month.
In Illinois, Madigan pointed out that the average charity contribution of hospitals is about 1 percent of their total expenses.
"Hospitals that benefit from huge tax breaks have an obligation to give back to the community. Right now, hospitals that receive entire loaves of bread for free are handing out crumbs when it comes to providing healthcare to some of the most vulnerable Illinoisans. It is clear that we must create standards and hold hospitals accountable to fulfill their charity care responsibilities," she said at a news conference unveiling the Tax-Exempt Hospital Responsibility Act.
Specifically, the bill would require that all tax-exempt hospitals implement a charity care policy guaranteeing uninsured individuals free or deeply discounted care and deliver a minimum total annual amount of charity care, calculated as 8 percent of hospital operating costs.
Under the law, a family of four with an income less than $19,350 would be entitled to free care.
But hospital representatives have argued that the laws could push many hospitals -- already struggling to cover the cost of providing care for the uninsured -- out of business altogether.
The laws could also potentially provide an incentive for low-income people who have insurance to stop paying for it because they are newly entitled to free care, critics say.
To address these concerns, most state and city bills provide exceptions to hospitals that serve underserved areas.
Many hospitals have seen their budgets squeezed in recent years because of structural changes in the industry, Talbert said. In particular, managed-care companies and government programs now negotiate steep discounts for services, which means hospitals can no longer use extra income from well-insured patients to offset the costs of charity care.
However, that does not necessarily mean that all hospitals are giving all they can, Talbert added.
"It's a real struggle for some hospitals to provide uncompensated care," he said, "but some hospitals are doing very well and could do more charity care."
