Uncompensated care numbers make state hospital vulnerable
While the national debate over Republican efforts to “repeal and replace” the Affordable Care Act continues, hospitals in Mississippi face the future with the ongoing realities of the uncompensated care they are compelled by law to provide.
The debate begins at understanding a 1986 law that compels almost every hospital (all that accept Medicare) to provide health care to people who walk into emergency rooms seeking that care regardless of the ability of the patient to pay.
The Emergency Medical Treatment and Active Labor Act (EMTALA) governs how and when a patient can be refused treatment or transferred from one hospital to another when the patient is in an unstable medical condition.
EMTALA, in essence, requires that any patients who comes to the hospital ER seeking examination or treatment for a medical condition must receive an examination and if the patient is suffering from an “emergency medical condition” the hospital is then legally obligated to provide him with treatment to stabilize the condition or transfer the patient to another hospital. That includes labor and delivery of infants.
In a state with Mississippi’s depth of poverty and high rate of uninsured patients, the law puts community hospitals in the fiscal crosshairs. Community hospitals provide, on average, about 60 percent of all the uncompensated health care delivered in this country.
The American Hospital Association provided this voluminous definition of just what uncompensated care is in 2010:
“Uncompensated care is an overall measure of hospital care provided for which no payment was received from the patient or insurer. It is the sum of a hospital’s “bad debt” and the charity care it provides.
“Charity care is care for which hospitals never expected to be reimbursed. A hospital incurs bad debt when it cannot obtain reimbursement for care provided; this happens when patients are unable to pay their bills, but do not apply for charity care, or are unwilling to pay their bills. Uncompensated care excludes other unfunded costs of care, such as underpayment from Medicaid and Medicare.”
Uncompensated care costs nationally in community hospitals have for more than 30 years ranged from 5.1 percent to just over 6 percent of their total expenses. The Kaiser Family Foundation reports that “community based providers (including clinics and health centers) and office-based physicians provide the rest, providing 26 percent and 14 percent of uncompensated care, respectively.”
That same KFF report revealed how hospitals struggle to pay for uncompensated care: “In 2013, $53.3 billion was paid to help providers offset uncompensated care costs. Most of these funds ($32.8 billion) came from the federal government through a variety of programs including Medicaid and Medicare, the Veterans Health Administration, the Indian Health Service, community health centers block grant, and the Ryan White CARE Act. States and localities provided $19.8 billion, and the private sector provided $0.7 billion.”
Last year, the Mississippi Business Journal looked at the prospects for Mississippi local hospitals in the changing national and state health care policy environment. MHA’s Center for Rural Health director Mendal Kemp told the publication:
“The payer mix dictates how you are doing financially. Some of the small rural hospitals particularly depend heavily on Medicare and Medicaid. They have no private commercial insurance patients to speak of. That is why the (federal reimbursement) cuts are doubly bad for the small rural hospitals. Those are the ones at the greatest risk of closure.”
In examining repeal of the ACA and implementation of the proposed GOP-based American Health Care Act, Mississippi’s congressional delegation must consider the impact of federal health care policy on Mississippi’s rural hospitals lest access to basic health care in the state contract significantly.
Public health care is kind of like the old Fram oil filter commercial. You can pay now or pay later, but as taxpayers, we will ultimately pay for the provision of public health care at the federal, state and local level.
Sid Salter is a syndicated columnist. Contact him at firstname.lastname@example.org.
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