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NASH Registers Concerns Over Uncompensated Care Audits

The process the federal government is employing to audit the uncompensated care costs that hospitals report to Medicare is plagued with problems, the National Alliance of Safety-Net Hospitals has written in a letter to the Centers for Medicare & Medicaid Services.

Those problems could result in reduced Medicare disproportionate share hospital payments (Medicare DSH) to private safety-net hospitals in the future, NASH warned in the letter.

According to NASH, problems with the audits of hospitals’ Medicare cost report S-10 worksheets, where they report their uncompensated care, include inconsistencies in the methods auditors are using and the data they demand and unreasonable deadlines for submitting requested supplemental data.

To address these problems, NASH asked CMS to standardize the auditing process and to convey decisions about auditing standards, methodologies, and time frames to hospitals.

In light of these problems, NASH also asked CMS not to use audited data to calculate Medicare DSH uncompensated care payments for FY 2020.

The S-10 audits are so important to private safety-net hospitals because the uncompensated care reported on the S-10 is used in the calculation of participating hospitals’ Medicare DSH uncompensated care payments.  When auditors reduce eligible hospitals’ uncompensated care data, that will result in future reductions of the Medicare DSH payments hospitals receive.  Those Medicare DSH payments play a vital role in helping to underwrite the cost of the care private safety-net hospitals provide to uninsured patients, so any undeserved reduction in those payments could hurt those hospitals and result in reduced access to care in the communities they serve.

Learn more by reading NASH’s letter to CMS about current challenges with uncompensated care audits.

Helping Safety-Net Hospitals Help Their Patients

A new report published on the Health Affairs Blog describes the continuing challenges safety-net hospitals face and offers suggestions for helping them meet those challenges.

The challenges, according to the report, are the virtual elimination of the Affordable Care Act’s individual health insurance mandate; the continued decline in the amount of Medicare disproportionate share hospital money (Medicare DSH) provided to safety-net hospitals; and hospital closures that shift more of the burden for caring for uninsured patients onto a smaller pool of safety-net hospitals.  The result is under-served patients and new financial risks for the hospitals that remain after some safety-net hospitals close because of the large amounts of uncompensated care those hospitals continue to provide.

To address these challenges, the report offers three potential solutions:

  • Congress should revisit the Medicare DSH cuts.
  • States should target their DSH money to the hospitals providing the most uncompensated care.
  • Non-profit non-safety-net hospitals that stabilize uninsured emergency patients and then direct them to safety-net hospitals should be required to play a longer-term role in the care of such patients as part of their required community benefit or risk losing their tax-exempt status.

Learn more about the challenges safety-net hospitals continue to face and some of the possible solutions to those problems by going here, to the Health Affairs Blog, to see the report “Safety-Net Health Systems at Risk:  Who Bears The Burden Of Uncompensated Care?”

House Committee Looks at 340B

Are hospitals using the savings generated by their participation in the section 340B prescription drug discount program to help their low-income and uninsured patients?

That’s what the House Energy and Commerce Committee’s Health Subcommittee is asking.

Earlier this year the committee requested such information from the Health Services and Resources Administration, which runs the 340B program, and now it’s asking hospitals as well.

Specifically, the subcommittee sent five-page letters to 19 providers that participate in the 340B program asking them about:

  • the quantity of 340B-purchased drugs they dispense to Medicare beneficiaries, Medicaid beneficiaries, and those with private insurance
  • the quantity of 340B-purchased drugs they dispense to uninsured patients
  • their savings from the 340B program and how they calculate those savings
  • how much charity care they provide
  • how they use 340B savings to serve vulnerable populations

The letters address many other 340B-related issues as well.

Most private safety-net hospitals participate in the 340B program and view it as a critical tool in their ability to meet the needs of their many low-income patients.

Learn more about the Health Subcommittee’s letter by reading this press release describing this initiative and go here to view the letters the subcommittee sent to selected 340B providers.

Medicare’s Costs Can Be High for Low-Income Beneficiaries

Despite enjoying Medicare coverage, low-income seniors can still spend a significant portion of their limited income on costs Medicare does not cover.

According to a new study published by the Commonwealth Fund, more than 25 percent of Medicare beneficiaries spend at least 20 percent of their income on health care – on things like premiums, cost-sharing, prescriptions, and dental and vision care, long-term care, and other services not covered by the federal program.  These costs pose a problem for many because nearly half of all Medicare participants have incomes below the federal poverty level, which is slightly less than $24,000 a year for a single person.  More than five million Medicare beneficiaries have no supplemental coverage, such as a Medigap plan or a Part D prescription drug plan, thereby increasing their out-of-pocket health care costs.

Such patients can be especially challenging for the nation’s private safety-net hospitals because often, they cannot afford their Medicare co-pays and deductibles.  In many cases, private safety-net hospitals end up absorbing these costs as uncompensated care – and because they serve far more low-income seniors than the typical American hospital, they experience this problem in far greater numbers and to a much greater degree and provide much more uncompensated care as a result.

Learn more about the out-of-pocket costs for which Medicare beneficiaries are responsible and how it affects them financially, and especially how it affects low-income Medicare beneficiaries financially, in the report “Medicare Beneficiaries’ High Out-of-Pocket Costs:  Cost Burdens by Income and Health Status,” which can be found here, on the Commonwealth Fund’s web site.

 

Hospital Uncompensated Care Down

As was surely expected, reforms introduced through implementation of the Affordable Care Act have driven down uncompensated care costs for many hospitals.

How much?

A new study published by the Commonwealth Fund offers the following findings:

  • uncompensated care declines in expansion states are substantial relative to profit margins;
  • for every dollar of uncompensated care costs hospitals in expansion states had in 2013, the Affordable Care Act erased 41 cents by 2015; and
  • Medicaid expansion reduced uncompensated care burdens for safety-net hospitals that are not made whole by Medicaid disproportionate share payments (Medicaid DSH).

Learn more, including how the decline in uncompensated care costs affected different kinds of hospitals in different kinds of states, in the report “The Impact of the ACA’s Medicaid Expansion on Hospitals’ Uncompensated Care Burden and the Potential Effects of Repeal,” which can be found here, on the Commonwealth Fund’s web site.

Hospital Bad Debt Up in Ohio

While uncompensated care is down, bad debt is up at Ohio hospitals.

According to a new report from the Ohio Hospital Association, hospital bad debt rose in that state from $1.04 billion in FY 2013, when the state had not expanded its Medicaid program, to $1.23 billion in 2014, after Medicaid expansion had begun.

Why?

The increase was “…spurred by the growth in high deductible health plans,” the report states.

At the same time, what the association calls “charity care” fell from $1.03 billion to $809 million.

ohioIncreased bad debt as a result of the purchase of high-deductible health insurance is especially a challenge for urban safety-net hospitals because so many of the residents of the low-income communities they serve struggle even to pay for the lowest-cost health insurance.

To learn more go here to Healing Ohio Communities, the Ohio Hospital Association’s 2016 community benefit report.

Hospitals Reconsidering Charity Care Policies?

In the wake of Affordable Care Act policies that enhance access to health insurance, hospitals around the country are beginning to take a second look at their charity care policies.

iStock_000001497717XSmallSome are charging co-pays to uninsured patients; others are moving the line at which they provide free or subsidized care.

Such practices are not occurring in great numbers and do not yet constitute a trend, but they do reflect a growing concern among hospitals that some of their uninsured patients have options they are choosing not to exercise.

The New York Times has taken a look at a few hospitals that have reconsidered their long-time charity care policies.  Read its report here.