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In California, hospitals looking to collect on bills can’t garnishee wages or put liens on the homes where patients live.
In Texas, nonprofit hospitals are required to provide a certain amount of charity care.
In Washington state, hospitals must provide free or discounted care to indigent patients – and report to the state how much they spend to provide that treatment.
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No such laws protect North Carolina’s patients.
An investigation by The News & Observer and The Charlotte Observer found that while North Carolina hospitals get tax breaks worth hundreds of millions, some are doing little to help the poor. Instead, many hospitals are pursuing uninsured patients with lawsuits or collections agencies that can destroy their credit.
Patient advocates say the state could be doing far more.
“North Carolina is not in good shape,” said Jessica Curtis, a hospital expert for Community Catalyst, a Boston group working to improve access to health care. “If you’re a consumer in North Carolina and you need free care, there’s nothing in the state law or the regulations that would protect you.”
The newspapers discussed what could be done with consumer advocates, industry experts and the N.C. Hospital Association. Following are seven proposals that advocates say would likely help North Carolina patients:
1. Require credit reporting agencies to remove medical debts from reports after the bill is paid.
Why it might help: Once-delinquent medical bills can remain on a credit report for up to seven years, even if the bill has been paid in full.
U.S. Rep. Heath Shuler, a Waynesville Democrat, has introduced a bill to require credit reporting agencies to remove medical debts of less than $2,500 from credit reports 45 days after the balance goes to zero.
Mark Rukavina, executive director of The Access Project of Boston, which works to improve health care for the poor and uninsured, said: “Here you have people doing the right thing – paying off their bill – and it can hurt their credit for up to seven years It’s simply wrong that people can have their credit ruined simply because they got sick – and then paid their bill.”
Adam Linker, a policy analyst at the N.C. Health Access Coalition, says he doesn’t think Shuler’s bill goes far enough: “I don’t think medical debt should go on credit reports, period.”
Who it might help: People such as Nila Nwosu of Raleigh, who in 2009 was erroneously reported to a credit agency. Duke Raleigh Hospital had incorrectly reported her to a collection agency. The collection agency subsequently removed the balance from her file at national credit bureaus, but nine months later her credit report showed that she had been delinquent on a hospital bill. That makes it more difficult for her to get credit
What the credit industry says: Norm Magnuson, of the Consumer Data Industry Association, cautioned that lenders would likely want all information about a consumer’s credit history in deciding whether to lend. He said his members have not taken a position on the bill.
2. Require hospitals to post their charity care policies in prominent places.
Why it might help: While most North Carolina hospitals have charity care policies, uninsured patients don’t always learn about them. More than a third of North Carolina hospitals provide no details on their Web pages, and the newspapers found more than 20 patients who say they were never informed about charity care policies.
Jessica Curtis: “If they can send a bill, they can also send a note about financial assistance or charity care.”
Who it might help: Patients such as Johnnika Pyles of Roxboro, a student seen in the emergency room at the Person Memorial Hospital in 2009. Pyles, who was uninsured, did not know that charity care was available. When her mother, Shelia Pyles, called to inquire about charity care, the hospital’s former chief financial officer told her that Person didn’t advertise its charity care policy because it is a small hospital.
What hospitals say: “The vast majority of hospitals already post policies online, providing detailed information on eligibility requirements and whom to contact for information about financial assistance and charity care,” wrote Don Dalton of the N.C. Hospital Association. “Hospitals also post notices in their buildings that lead people to charity care policies and people eager to assist them. These postings are done without legislative mandate.”
3. Make it easier for patients to apply for charity care.
Why it might help: Some hospitals ask patients to supply extensive documentation – such as multiple years of tax returns and the tax values and loan amounts of any vehicles owned.
Adam Linker: “It’s not really charity care if you require that much reporting and make it that difficult.”
Other hospitals and hospital systems – including Novant Health – run soft credit checks on uninsured patients. Those checks do not affect a patient’s credit score, but do provide the hospitals enough financial information to determine whether they qualify for charity care. That means patients can get help without the burden of providing lots of documents.
What hospitals say: “Without documentation of income and assets, it’s difficult to qualify a patient for all the financial assistance to which they might be entitled,” Dalton wrote. “More importantly, we don’t believe there is a hospital in our state that is denying anyone emergency treatment either because they cannot pay or because they do not have documentation readily available. After treatment, patients have ample opportunity to provide documentation that would qualify them for financial assistance.”
4. Require North Carolina hospitals to report charity care spending to the state.
Why it might help: The N.C. Hospital Association now asks its members to report information about their charity care spending to: www.ncha.org/issues/community-benefit . But reporting is voluntary, and a number of hospitals don’t comply.
Patient advocates say better disclosure would likely encourage some hospitals to provide more financial help to uninsured patients.
Requiring hospitals to report the extent of their charitable spending isn’t a new idea. California, Connecticut and Illinois are among the nine states requiring that an accounting of charity care be made public.
What hospitals say: “Charity care spending is already voluntarily reported on the NCHA website,” Dalton wrote. “We expended significant resources to make this data available to everyone. We see little value in the State spending the same resources again to accomplish a redundancy. A state agency would be free to use the information on our website.”
5. Set state rules on who gets charity care.
Why it might help: Consumer advocates say individuals earning $22,340 or less – twice the federal poverty guidelines – often lack the resources or insurance to pay expensive medical bills. That figure is equivalent to earning $11 an hour.
Adam Searing, director of the N.C. Health Access Coalition: “A number of major hospitals in the state meet that, and it doesn’t seem unreasonable to me.” Novant, for example, gives free care at all of its hospitals to patients at 300 percent of the federal poverty guideline or less.
Who it might help: People such as Mary Jo Warren of Clinton, who lives on a pension of $1,211, well below the 200 percent poverty guideline. After her rent and utility bills, she has $131 left each month to spend on food, prescriptions and toiletries. Sampson Regional Medical Center granted her a 45 percent discount on her bills, which she can’t pay.
What hospitals say: Dalton said the association’s board members discussed that issue several years ago at the urging of the N.C. Medical Care Commission. “We learned once again that North Carolina is not a one-size-fits-all state,” Dalton wrote. “Some hospitals are in prosperous and diverse enough communities to make the 200 percent goal reachable. Others are not. For those, a 200 percent mandate would seriously undermine the hospital’s ability to collect enough revenue to remain open.”
6. Prohibit hospitals from putting liens on the homes of patients with few resources.
Why it might help: The newspapers found that some North Carolina hospitals – none of them in the Triangle – are filing thousands of suits against patients to collect on unpaid bills. Many of those patients have no insurance and little income.
State law allows public hospitals to garnishee up to 10 percent of patients’ wages if they don’t pay their bills – and if their income exceeds 200 percent of the federal poverty level. At least one hospital – Wilkes Regional Medical Center in North Wilkesboro – does that.
Says Jessica Curtis: “If a person can’t pay a bill, why squeeze blood from a stone? Why go after the little bit of security they have in their income or owning their own home?”
Who it might help: People such as Kenny Miller. Suffering from an irregular heartbeat, the Charlotte resident got emergency surgery at Carolinas Medical Center in 2007. Miller, a Vietnam veteran, had no health insurance other than his coverage from the Veterans Administration. That pays only $3,000 each year for medical care outside the VA system.
When the hospital mailed a bill for $48,000, Miller said he had no way to pay it. Carolinas HealthCare System, which owns the hospital, sued, won a judgment and put a lien on Miller’s small three-bedroom house on Charlotte’s westside. The home’s tax value: less than $70,000.
What hospitals say: They have a responsibility to try to collect from those who can afford to pay their bills.
“Without reasonable attempts to collect, hospital costs would continue to soar beyond the reach of more and more payors,” said Dalton. “ Placing a lien on a property enables a hospital to collect at a time when resources from the sale of that property are available.”
7. Make hospital prices more transparent.
Why it might help: More information on prices could help patients find more affordable hospital care and put pressure on hospitals to cut prices.
Both Aetna and Blue Cross and Blue Shield of North Carolina have voluntarily created cost estimators for their customers.
New Hampshire and Maine post price information based on paid claims data collected from health insurers. Their websites show estimates not just for the hospital bill, but for the total bill, including doctors’ fees and other services.
Twelve other states have also passed laws requiring collection of health care cost data, but they have not yet published it on websites.
What hospitals say: “Help for consumers in this area is quickly evolving – without the need for additional legislation,” wrote the hospital association’s Dalton.
Dalton said hospitals work with patients in advance to help determine costs, the state collects information from each hospital on the top 35 inpatient procedures, and the association publishes that information on its website.
Former Novant Health CEO Paul Wiles said his system supports more transparency on cost. “That will have an impact on changing our behavior. Right now, it’s next to impossible to do real price comparison.”
To read other stories in our "Prognosis: Profits" series, click here.