Charity Care in Ophthalmology, 2024

PURPOSE

To review changes in the provision of charity eye care in the past 50 years with hypothesized resulting effects on surgical training and patient outcomes.

DESIGN

Perspective.

METHODS

Case report, comparison of experience in community and training program settings, and selected literature review.

RESULTS

The population to which charity care applies has shrunk as broader insurance coverage has been legislated, but in 2023 remains at approximately 7.3% of the US population. In areas with ophthalmology training programs, house staff supervised by faculty provide most of the charity care. In areas without training programs, a shrinking pool of willing private practitioners provides charity care. Because there is no organized financial support behind provision of charity, nonanecdotal data needed to assess the problem and guide decision making are lacking.

CONCLUSIONS

Charity eye care in ophthalmology in 2024 is a patchwork of transient, local efforts that have a few common themes: absent material basis for sustainability, a narrowing base of support by clinicians, transfer of care to training programs, and financial vetting of applicants by nonclinicians. Unless universal health care legislation passes, which would eliminate the issue, suggestions for improvement include broader voluntary participation by private practice ophthalmologists in charity eye care, allocation of charity care spending by nonprofit hospitals to support this effort, and clinician-determined criteria for provision of charitable surgery supported by involved hospital systems.

Immunity from Civil Liability, Part 2

What nurses should understand in times of crisis.

Comparing the Affordable Care Act's Financial Impact on Safety-Net Hospitals in States That Expanded Medicaid and Those That Did Not

ISSUE

Safety-net hospitals play a vital role in delivering health care to Medicaid enrollees, the uninsured, and other vulnerable patients. By reducing the number of uninsured Americans, the Affordable Care Act (ACA) was also expected to lower these hospitals’ significant uncompensated care costs and shore up their financial stability.

GOAL

To examine how the ACA’s Medicaid expansion affected the financial status of safety-net hospitals in states that expanded Medicaid and in states that did not.

METHODS

Using Medicare hospital cost reports for federal fiscal years 2012 and 2015, the authors compared changes in Medicaid inpatient days as a percentage of total inpatient days, Medicaid revenues as a percentage of total net patient revenues, uncompensated care costs as a percentage of total operating costs, and hospital operating margins.

FINDINGS AND CONCLUSIONS

Medicaid expansion had a significant, favorable financial impact on safety-net hospitals. From 2012 to 2015, safety-net hospitals in expansion states, compared to those in nonexpansion states, experienced larger increases in Medicaid inpatient days and Medicaid revenues as well as reduced uncompensated care costs. These changes improved operating margins for safety-net hospitals in expansion states. Margins for safety-net hospitals in nonexpansion states, meanwhile, declined.

The Impact of the ACA's Medicaid Expansion on Hospitals' Uncompensated Care Burden and the Potential Effects of Repeal

ISSUE: By increasing health insurance coverage, the Affordable Care Act's Medicaid eligibility expansion was also expected to lessen the uncompensated care burden on hospitals. The expansion currently faces an uncertain future. GOAL: To compare the change in hospitals' uncompensated care burden in the 31 states (plus the District of Columbia) that chose to expand Medicaid to the changes in states that did not, and to estimate how these expenses would be affected by repeal or further expansion. METHODS: Analysis of uncompensated care data from Medicare Hospital Cost Reports from 2011 to 2015. FINDINGS AND CONCLUSIONS: Uncompensated care burdens fell sharply in expansion states between 2013 and 2015, from 3.9 percent to 2.3 percent of operating costs. Estimated savings across all hospitals in Medicaid expansion states totaled $6.2 billion. The largest reductions in uncompensated care were found for hospitals in expansion states that care for the highest proportion of low-income and uninsured patients. Legislation that scales back or eliminates Medicaid expansion is likely to expose these safety-net hospitals to large cost increases. Conversely, if the 19 states that chose not to expand Medicaid were to adopt expansion, their uncompensated care costs also would decrease by an estimated $6.2 billion.

Medicaid Program; Disproportionate Share Hospital Payments--Treatment of Third Party Payers in Calculating Uncompensated Care Costs. Final rule

This final rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under section 1923(g)(1)(A) of the Social Security Act (Act), and the application of such limitation in the annual DSH audits required under section 1923(j) of the Act, by clarifying that the hospital-specific DSH limit is based only on uncompensated care costs. Specifically, this rule makes explicit in the text of the regulation, an existing interpretation that uncompensated care costs include only those costs for Medicaid eligible individuals that remain after accounting for payments made to hospitals by or on behalf of Medicaid eligible individuals, including Medicare and other third party payments that compensate the hospitals for care furnished to such individuals. As a result, the hospital-specific limit calculation will reflect only the costs for Medicaid eligible individuals for which the hospital has not received payment from any source.

Supporting Family Caregivers

(1) About 8,000 baby boomers reach age 65 every day. (2) Nearly 70 percent of people over age 65 will need some form of long-term services and supports in their lives. (3) AARP estimates the value of uncompensated care provided by family caregivers to be more than $450 billion annually.

Medicaid program; disproportionate share hospital payments--uninsured definition. Final rule

This final rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under the Social Security Act (the Act). Under this limitation, DSH payments to a hospital cannot exceed the uncompensated costs of furnishing hospital services by the hospital to individuals who are Medicaid-eligible or "have no health insurance (or other source of third party coverage) for the services furnished during the year.'' This rule provides that, in auditing DSH payments, the quoted test will be applied on a service-specific basis; so that the calculation of uncompensated care for purposes of the hospital-specific DSH limit will include the cost of each service furnished to an individual by that hospital for which the individual had no health insurance or other source of third party coverage.

Medicare program; FY 2014 inpatient prospective payment systems: changes to certain cost reporting procedures related to disproportionate share hospital uncompensated care payments. Interim final rule with comment period

: In the fiscal year (FY) 2014 inpatient prospective payment systems (IPPS)/long-term care hospital (LTCH) PPS final rule, we established the methodology for determining the amount of uncompensated care payments made to hospitals eligible for the disproportionate share hospital (DSH) payment adjustment in FY 2014 and a process for making interim and final payments. This interim final rule with comment period revises certain operational considerations for hospitals with Medicare cost reporting periods that span more than one Federal fiscal year and also makes changes to the data that will be used in the uncompensated care payment calculation in order to ensure that data from Indian Health Service (IHS) hospitals are included in Factor 1 and Factor 3 of that calculation.

Medicaid program; state disproportionate share hospital allotment reductions. Final rule

The statute, as amended by the Affordable Care Act, requires aggregate reductions to state Medicaid Disproportionate Share Hospital (DSH) allotments annually from fiscal year (FY) 2014 through FY 2020. This final rule delineates a methodology to implement the annual reductions for FY 2014 and FY 2015. The rule also includes additional DSH reporting requirements for use in implementing the DSH health reform methodology.

Protecting uninsured patients from high hospital charges: lessons from California

Key findings. (1) In 1997, the amount California hospitals billed uninsured patients was more than twice the amount hospitals received from Medicare for the same services. By 2010, billed charges had grown to be five times what Medicare paid, which trans­lated into a gap of more than $10,000 per day in the hospital. (2) Five years after the passage of the state's Hospital Fair Pricing Act, most California hospitals had financial assistance policies in place to make care more affordable for the state's uninsured population. (3) As of 2011, 81 percent of California hospitals reported charging low-income uninsured patients prices that were at or below Medicare rates. (4) While not required by the law, nearly all California hospitals reported offering free care to uninsured patients with incomes at or below 100 percent of poverty.

CMS's proposed rule implementing the ACA-mandated Medicaid DSH reductions

State Medicaid programs make Medicaid disproportionate share hospital (DSH) payments to hospitals to help offset costs of uncompensated care for Medicaid and uninsured patients. Unlike most Medicaid spending, annual DSH allotments for each state are capped. Under the Patient Protection and Affordable Care Act of 2010 (ACA), DSH payments will decrease starting in fiscal year (FY) 2014 and continuing through FY 2020. This paper describes the proposed rule for reducing these federal allotments, which was released on May 15, 2013, by the Centers for Medicare & Medicaid Services (CMS). Comments on the proposed rule are due July 12, 2013.

Proposed regs address new hospital tax-exemption requirements

Proposed regulations set forth detailed rules for implementing the new tax-exemption requirements of Section 501(r) of the Internal Revenue Code for not-for-profit organizations operating hospital facilities. The proposed regulations provide guidance on the written financial assistance policies (FAPs) that hospital facilities are required to establish. The regulations propose methodologies for determining the amounts that a hospital facility can charge FAP-eligible individuals for emergency and other medically necessary care. They prescribe procedures that hospital facilities would be required to follow before engaging in extraordinary collection actions against an individual.

Hospital ownership and community benefit: looking beyond uncompensated care

Not-for-profit (NFP) hospitals have come under increased public scrutiny for management practices that are inconsistent with their charitable focus. Of particular concern is the amount of community benefit provided by NFP hospitals compared to for-profit (FP) hospitals given the substantial tax benefits afforded to NFP hospitals. This study examines hospital ownership and community benefit provision beyond the traditional uncompensated care comparison by using broader measures of community benefit that capture charitable services, community assessment and partnership, and community-oriented health services. The study sample includes 3,317 nongovernment, general, acute care, community hospitals that were in operation in 2006. Data for this study came from the 2006 American Hospital Association Hospital Survey and the 2006 Area Resource File. We used multivariate regression analyses to examine the relationship between hospital ownership and five indicators of community benefit, controlling for hospital characteristics, market demand, hospital competition, and state regulations for community benefit. We found that NFP hospitals report more community benefit activities than do FP hospitals that extend beyond uncompensated care. Our findings underscore the importance of defining and including activities beyond uncompensated care when evaluating community benefit provided by NFP hospitals.

Community benefit in exchange for non-profit hospital tax exemption: current trends and future outlook

Assessing the adequacy of the community benefits that not-for-profit hospitals provide in exchange for tax exemption remains a challenge. While recent changes to Internal Revenue Service (IRS) reporting requirements have improved transparency, the lack of clearly defined charitable expectations has resulted in critical scrutiny of not-for-profit hospitals' community benefits and numerous challenges to their tax exempt status. Using data from the revised IRS Form 990 Schedule H for 2009, this article documents the wide range of community benefit activities that not-for-profit hospitals in California engage in and compares them to a set of minimum spending thresholds. The findings show that when community benefit was defined narrowly in terms of charity care, very few hospitals would have met any of the minimum spending thresholds. When community benefit was defined as in the revised IRS Form 990 Schedule H, however, a majority of hospitals in California would have been considered charitable. Whether focusing on expenditures is the most appropriate way to assess the adequacy of a hospital's community benefits remains an open question. To that end, this article concludes by outlining a more comprehensive evaluation approach that builds on recent changes to non-profit hospital tax exemption implemented by the Affordable Care Act.

Setting a standard: Illinois bill bases hospitals' tax-exempt status on charity-care levels; plan could be model for other states

Illinois hospitals are cheering legislation that defines how they can qualify for property tax exemptions. "Hospitals have been on hold for a year-plus in making improvements and investments in their communities... many hospitals were concerned about their future survival," says Maryjane Wurth, president and CEO of the Illinois Hospital Association.

The impact of the individual mandate and Internal Revenue Service Form 990 Schedule H on community benefits from nonprofit hospitals

In response to a growing concern that nonprofit hospitals are not providing sufficient benefit to their communities in return for their tax-exempt status, the Internal Revenue Service (IRS) now requires nonprofit hospitals to formally document the extent of their community contributions. While the IRS is increasing financial scrutiny of nonprofit hospitals, many provisions in the recently passed historical health reform legislation will also have a significant impact on the provision of uncompensated care and other community benefits. We argue that health reform does not render the nonprofit organizational form obsolete. Rather, health reform should strengthen the nonprofit hospitals' ability to fulfill their missions by better targeting subsidies for uncompensated care and potentially increasing subsidized health services provision, many of which affect the public's health.

New requirements for hospitals to maintain tax-exempt status

Tax-exempt hospitals are now facing more legislative requirements to maintain tax-exempt status. This article outlines each of these requirements imposed by the Patient Protection Act of 2010. Health care administrators, executives, and consultants must be aware of these new laws to ensure each facility is capable of maintaining tax-exempt status. Despite the issuance of new requirements, a conclusive definition of charity does not exist. Therefore, the debate surrounding charity care and the justification for tax-exempt status will continue.

Public vs. private provision of charity care? Evidence from the expiration of Hill-Burton requirements in Florida

This paper explores the consequences of the expiration of charity care requirements imposed on private hospitals by the Hill-Burton Act. We examine delivery care and the health of newborns using the universe of Florida births from 1989 to 2003 combined with hospital data from the American Hospital Association. We find that charity care requirements were binding on hospitals, but that private hospitals under obligation "cream skimmed" the least risky maternity patients. Conditional on patient characteristics, they provided less intensive maternity services but without compromising patient health. When obligations expired, private hospitals quickly reduced their charity caseloads, shifting maternity patients to public hospitals. The results in this paper suggest, perhaps surprisingly, that requiring private providers to serve the underinsured can be effective.

Professional courtesy: can you legally provide it?

Professional courtesy: Something most physicians did and enjoyed doing, and that was a nice perk that physicians offered their colleagues. But is it legal? Can it still be done without breaking the law? What are the guidelines? This article will answer these questions. After reading this article, you will understand the guidelines for professional courtesy and what the risks and penalties are if they are violated.

A Form 990 Schedule H conundrum: how much of your bad debt might be charity?

IRS Form 990 Schedule H requires hospitals to estimate the amount of bad debt expense attributable to patients eligible for charity under the hospital's charity care policy. Responses to Schedule H, Part III.A.3 open up the entire patient collection process to examination by the IRS, state officials, and the public. Using predictive analytics can help hospitals efficiently identify charity-eligible patients when answering Part III.A.3.