Brian Klepper, PhD November 29, 2013
I laid this out in a letter to the CEO and, probably because he wanted to avoid a detailed description of this unpleasantness in the local paper, he relented, zeroing out the patient’s balance. No hospital executive wants to be publicly profiled as a financial predator.
But while that resolved that patient’s problem, it did nothing to change the broader practice. Most US health systems, both for-profit and not-for-profit, exploit self-pay patients in this way. Worse, not-for-profit health systems legally pillage their communities’ most financially vulnerable patients while getting millions of dollars in tax breaks each year for providing charity care. Aggressive collections procedures, including home liens, are widespread.
Some states have strictly limited what hospitals can charge low income patients. In California, uninsured patients with incomes below 350 percent of the federal poverty level (FPL) — $82,425 in 2013 for a family of 4 — can be charged no more than Medicare rates. In New Jersey, patients within 500 percent of the FPL cannot be charged more than 115 percent of Medicare.
Section 9007 of the ACA took effect last year and prohibits excessive pricing for self-pay patients, and would revoke a charitable hospital’s tax-exempt status if it charges them more than it charges for insured patients. The language is ambiguous, conceivably allowing health systems to circumvent the law’s intent. But the spirit is clear. To keep their not-for-profit tax status and perks, health systems must stop taking advantage of self-pay patients.
That’s the core point. Most health system executives have, at some time in their careers, released a friend or acquaintance from egregious pricing. Many have forgiven a debtor they didn’t know because the issue was raised and they knew how unfavorable it would look in the local media. In other words, most know that, while these practices are lucrative and mostly hidden, they are also disgraceful.
For that reason alone, it is time for health system leaders to stand up, announce that their systems will adhere to the ACA’s intention, stop pursuing self-pay patients as a windfall opportunity, and encourage systems throughout the country to follow their lead.
In a stroke, this would improve American health care and make life better for millions of patients.
Brian Klepper is chief development officer, WeCare TLC, and blogs at Care and Cost.