“Your honor, the facility has already been paid TWICE- perhaps even more than its billed charges.”
That allowed the hospital chain to extract billions of dollars from taxpayer-funded programs, STAT reported.
While discrepancies in charity care spending between CMS filings and annual financial statements are common, HCA’s gulf is much wider than that of its for-profit and nonprofit rivals, the investigation found. For instance, the company with the next-highest charitable care spending reported to CMS, Tenet Healthcare, told the agency it spent $281 million more than was reported on its financial statement.
Charity care reported by hospitals to CMS plays a major role in determining where billions in federal and state supplemental payments to hospitals should go. In 2020, more than $80 billion in taxpayer money was distributed under this CMS rule, which was designed to offset losses for treating patients who rely on lower paying government assistance.
In 2022, HCA Healthcare brought in $3.9 billion from this rule, mostly from Medicare and state Medicaid programs, which do not consider how profitable a hospital has been, the report stated.
An HCA spokesperson told STAT the financial statement only contains charity care, while the CMS filing also includes uninsured discounts to patients who weren’t eligible for charity care BUT MEET ITS ELIGIBILITY REQUIREMENTS UNDER ITS FAP. See Texas Administrative Code attached.
Reading between the lines (full disclosure I have HCA stock):
Question: What does HCA know that its competitors do not where the supplemental payments it receives from states for providing uncompensated care are roughly $800mm more than everybody else?
Answer: It is how “uninsured” is typically defined under the applicable HCA financial assistance policy. Both “uninsured” and “underinsured” individuals are eligible under HCA financial assistance policies. Put simply, the additional supplemental payments from the states allow HCA to “double dip” because it already received a payment from a source of third-party coverage. Free tax dollars. There is no better “payer” than the US taxpayer.
Market Strategy and Issues:
Uninsured and Underinsured Individuals (Isn’t this just about everybody in the US?)
RBR: I would RBR every single HCA facility. Any balance billing issue can be addressed as follows: “Your honor, the facility has already been paid TWICE- perhaps even more than its billed charges.”
Balance Billing and Extraordinary Collection Action Prohibition: Any facility that collects a payment from a source of third-party coverage (no matter the amount) in addition to a supplemental payment from any state shall not have authority to balance bill any patient or engage in any ECA.
New Level of Plan Sponsor Reimbursement: Percentage of Walmart= (100% of Medicare + Supplemental Payment)
