“The local not for profit facility has a choice to make: either accept the Charlie Brown lump of coal by way of hundreds of financial assistance applications and ongoing risk in perpetuity unless the member hits the lottery or marries an NBA player) OR enter into a direct contract with the plan at a very favorable rate.“
Doug Aldeen – ERISA Healthcare Attorney and General Counsel
Sunday Morning Bathroom Read/ Labor Day/ PY 2024 Renewal/ Market Trend Edition:
Wage Statistics for 2020 (ssa.gov)
Background
350% of the FPL for an individual in FY 2023 is $51,049 (AGI). 64% of the US earns <$50,000.00 (AGI). A family of four (4) that earns $120,000 (AGI) is 400% of the FPL. See Wage Statistics (Net Compensation) from the Social Security Administration and FY 2023 FPL Guidelines.
The Social Security Administration recently released final wage statistics for 2020, and they are extremely alarming. According to the figures provided, the median wage for 2020 was just $34,612.04…
By definition, 50 percent of wage earners had net compensation less than or equal to the median wage, which is estimated to be $34,612.04 for 2020.
Strategy Moving Forward for Plan Renewal
Prospective Direct Contracting by Leveraging Eligibility Based Upon Financial Assistance:
If a group has, as an example, 63% of its employees that would otherwise qualify either in part or in whole for financial assistance at the local not for profit facility, the facility has a choice to make: either accept the Charlie Brown lump of coal by way of hundreds of financial assistance applications ( and ongoing risk in perpetuity unless the member hits the lottery or marries an NBA player) OR enter into a direct contract with the plan at a very favorable rate.
I can assist anybody looking for financials for any facility in the US with pertinent information that can facilitate a direct contract from 1997-forward. Client plug and contact information for Marc Chapman: ( 972-5294893) (marc.chapman@hospitalbillreview.com) .
This is could serve as the regulatory blueprint moving forward.
Texas Hospital Districts:
Hospitals organized under the Texas Hospital District Statute must FIRST determine ability to pay (at cost) before commencing any extraordinary collection action. I would check every other state and see if there is a similar statutory framework.
Leverage is everything and if the facility must first ascertain ability to pay via an administrative hearing ( “you mean you won’t take my word that I earn $22,000”) before suing, game over.
There is even a statutory right to appeal in the event of a denial for assistance.
A plan could either RBR these facility’s ( with nominal threat of collection since they do not know what Joe Lunch Bucket earns and cannot force you to provide that information upon admission) or just enter into a direct contract at a fair rate.
The Hospital District Statute in Texas is the healthcare equivalent of the criminal justice public defender system. Not everybody gets Johnny Cochrane. The public defender may have to suffice i.e. the local Hospital District Facility.
Summary
It is all in plan design and market ability to pay. One third of the US qualifies either in part or whole for financial assistance at current levels of income.
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