Thursday, July 29, 2004
Some hospitals lowering bills for the uninsured
[Jodie Snyder, "Hospitals reducing rates for uninsured," The Arizona Republic, 28 July 2004.]
Hospitals often charge patients with insurance reduced rates negotiated through their insurer, but charge those without insurance the full price. While this could be seen as incentivizing insurance, some say it translates into taking advantage of those least able to pay. Now, faced with public pressure and realizing some patients might actually be more willing to pay rather than default if rates are reduced, some hospitals are changing their policies:
Increasingly, uninsured patients are receiving price breaks at hospitals. At University Medical Center, for example, lab tests that went for $70 are now $22; CAT scans are $200 instead of $1,000.
In the Valley, at least four major hospital systems have changed their policies or are planning to, according to a survey by The Arizona Republic.
Their actions address one of the unpleasant ironies of the health care business: Uninsured patients, who are often least able to cover their hospital bills, are billed at full price, while a 40 to 60 percent discount is given to those with insurance.
Insurance companies negotiate for lower prices from health care providers.
The billing differences have come under scrutiny in congressional hearings and class-action lawsuits. Especially under fire: non-profit hospitals that receive tax breaks in exchange for offering charity care yet file liens against patients' homes and cars to collect unpaid debts.
"They are deathly afraid of having their not-for-profit tax exemption removed for not providing charity care," said Roger Hughes, executive director of St. Luke's Health Initiatives, a Phoenix-based health care policy organization.
Hospital officials said they made the changes after top federal officials gave their permission. The hospitals had believed Medicare regulators would not approve the move because offering different billing rates might be seen to violate Medicare rules against kickbacks.
For hospitals, charging less may mean they have an easier time trying to figure out their bottom lines.
Over the past few quarters, hospitals, especially for-profit institutions, have had to write off millions in bad debt. Financial analysts also have become nervous, worrying that the lawsuits and congressional hearings could hurt hospitals' ability to make bond payments or worse. In Illinois, for example, a hospital lost its property-tax exemption because of its treatment of the uninsured. It was billed for $1 million in back taxes. Analysts now want hospitals to address their charity care and uninsured care as part of their bond prospectuses.
Also, if hospitals charge less, they may have a greater chance of collecting on their bills because people may make more of an effort to pay them if they don't seem so overwhelming. Hospital officials estimate that they get just 10 cents to 40 cents on the dollar if they turn bills over to collection agencies.
That may help hospitals' bottom lines, but it's also a clear benefit for patients' pocketbooks.
[Jodie Snyder, "Hospitals reducing rates for uninsured," The Arizona Republic, 28 July 2004.]
Hospitals often charge patients with insurance reduced rates negotiated through their insurer, but charge those without insurance the full price. While this could be seen as incentivizing insurance, some say it translates into taking advantage of those least able to pay. Now, faced with public pressure and realizing some patients might actually be more willing to pay rather than default if rates are reduced, some hospitals are changing their policies:
Increasingly, uninsured patients are receiving price breaks at hospitals. At University Medical Center, for example, lab tests that went for $70 are now $22; CAT scans are $200 instead of $1,000.
In the Valley, at least four major hospital systems have changed their policies or are planning to, according to a survey by The Arizona Republic.
Their actions address one of the unpleasant ironies of the health care business: Uninsured patients, who are often least able to cover their hospital bills, are billed at full price, while a 40 to 60 percent discount is given to those with insurance.
Insurance companies negotiate for lower prices from health care providers.
The billing differences have come under scrutiny in congressional hearings and class-action lawsuits. Especially under fire: non-profit hospitals that receive tax breaks in exchange for offering charity care yet file liens against patients' homes and cars to collect unpaid debts.
"They are deathly afraid of having their not-for-profit tax exemption removed for not providing charity care," said Roger Hughes, executive director of St. Luke's Health Initiatives, a Phoenix-based health care policy organization.
Hospital officials said they made the changes after top federal officials gave their permission. The hospitals had believed Medicare regulators would not approve the move because offering different billing rates might be seen to violate Medicare rules against kickbacks.
For hospitals, charging less may mean they have an easier time trying to figure out their bottom lines.
Over the past few quarters, hospitals, especially for-profit institutions, have had to write off millions in bad debt. Financial analysts also have become nervous, worrying that the lawsuits and congressional hearings could hurt hospitals' ability to make bond payments or worse. In Illinois, for example, a hospital lost its property-tax exemption because of its treatment of the uninsured. It was billed for $1 million in back taxes. Analysts now want hospitals to address their charity care and uninsured care as part of their bond prospectuses.
Also, if hospitals charge less, they may have a greater chance of collecting on their bills because people may make more of an effort to pay them if they don't seem so overwhelming. Hospital officials estimate that they get just 10 cents to 40 cents on the dollar if they turn bills over to collection agencies.
That may help hospitals' bottom lines, but it's also a clear benefit for patients' pocketbooks.
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