Nonprofit hospitals expanding charity care, but not all changes positive
Restrictions in charity care and unclear eligibility criteria are still common and deserve regulatory attention, authors say.
Photo; The Good Brigade/Getty Images
About 84% of nonprofit hospitals updated their charity care policies from 2019 to 2021, during the heights of the COVID-19 pandemic, and according to findings published in JAMA Network Open, these updated policies resulted in mostly positive changes.
However, restrictions in charity care and unclear eligibility criteria are still common and deserve regulatory attention, authors found.
Overall, 127 of 170 hospitals in the sample made substantial changes to their charity care policies, with 242 distinct policy changes in categories such as income eligibility cutoffs, asset limitations and service exclusions.
While most hospitals expanded charity care, a statistically significant minority, almost 8%, actually restricted their charity care.
Unpublicized or vague eligibility criteria – which remain as lingering issues – may limit patients' understanding of charity care policies and conceal the full extent of policy changes over time. Authors said policy makers should consider requiring greater transparency and simplification for hospital charity care policies to ensure adequate access to care for uninsured and underinsured patients.
WHAT'S THE IMPACT?
Many people rely on hospital charity care to relieve the financial burden of healthcare costs; this reliance has been especially important during the COVID-19 pandemic, given the related increases in job loss and disability.
Specific policy changes mostly involved six criteria: income cutoffs for free and discounted care, residency status, presumptive eligibility, duration of coverage and underinsured eligibility.
Despite the generally positive changes, there remained some concerns. Of the minority of hospitals that restricted charity care, residency requirements were the most frequently restricted, often by limiting access based on immigration status. Some hospitals added unusual service restrictions such as exclusion of coverage for services while in the custody of law enforcement and exclusion of birth control.
On top of that, charity care policies continue to use vague language, especially for eligibility criteria such as assets, which limits patients' understanding of charity care policies and may conceal policy changes over time, authors said. Third-party tools for eligibility determination are common and may further limit transparency of eligibility requirements.
Plus, although underinsured eligibility expanded among hospitals in the sample, when hospitals addressed specific insurance scenarios common to underinsured status –such as cost-sharing and out-of-network services – the results were mixed. Among hospitals that restricted coverage related to cost sharing, some alluded to contracts with insurers that limit charity care coverage, which authors said conflicts with the spirit of the community benefit requirements of tax-exempt hospitals. The impact of these types of changes on insured patients is complex and difficult to fully ascertain, given geographic variation in healthcare charges and insurance networks.
Medicaid expansion reduces the uninsured population and could cause hospitals to adopt more generous charity care policies, but as the results of the specific analysis don't provide enough evidence for this, this remains merely speculation.
THE LARGER TREND
While information on charity care is scant, a 2019 report by California Healthline did find that hospitals in that state are providing significantly less charity care to low-income patients since the Affordable Care Act took effect.
As a proportion of their operating expenses, the state's general acute-care hospitals spent less than half on these patients in 2017 than they did in 2013, according to data the hospitals reported to California's Office of Statewide Health Planning and Development.
The biggest decline in charity care spending occurred from 2013 to 2015, when it dropped from just over 2% to just under 1%. The spending has continued to decline since then, though less dramatically.
Health experts largely attribute the drop in charity care spending to the implementation of the ACA. The law expanded insurance coverage to millions of Californians starting in 2014, and hospitals are now treating far fewer uninsured patients who can't pay for the care they receive.
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
