A press conference was held by Champaign County Health Care Consumers (CCHCC) on March 3rd 2004 regarding recently released Federal guidelines and their implications for the charity care programs of hospitals. Recent changes in the charity care programs of two local hospitals, Provena Covenant Medical Center and Carle Foundation Hospital, both of Urbana, Illinois, were described. The speakers at this event were Claudia Lennhoff, Janna McGregor, and Mary Jane Gillespie, who are staff members or affiliated with CCHCC. Portions of this press conference and its materials are highlighted below.

In a letter to Richard Davidson, President of the American Hospital Association (AHA), which was released to the public, Secretary Tommy Thompson of the Department of Health and Human Services (HHS) addressed whether Federal regulations barred hospitals from providing discounts to uninsured or underinsured patients with limited financial means. In this letter to Mr. Davidson, which was dated February 19th 2004, Secretary Thompson stated the following:

"Your letter suggests that HHS regulations require hospitals to bill all patients using the same schedule of charges and suggests that as a result, the uninsured are forced to pay 'full price' for their care. That suggestion is not correct and certainly does not accurately reflect my policy. The advice you have been given regarding this issue is not consistent with my understanding of Medicare's billing rules."

As a result of this exchange of letters with Mr. Davidson of AHA, Secretary Thompson has directed the Centers of Medicare and Medicaid Services and the Office of Inspector General to prepare summaries of Federal policy regarding these issues. Copies of these policy summaries are available through the office of CCHCC or the websites of these organizations. There is also a "Questions and Answers" document (Uninsured.pdf) that is available through CCHCC, or it can be downloaded from the following website:

http://www.cms.hhs.gov/FAQ

In the same letter, Secretary Thompson of HHS also stated:

". . . that hospitals can provide discounts to uninsured and underinsured patients who cannot afford their hospital bills and to Medicare beneficiaries who cannot afford their Medicare cost-sharing obligations. Nothing in the Medicare program rules or regulations prohibit such discounts. In addition, the Office of Inspector General informs me that hospitals have the ability to offer discounts to uninsured and underinsured individuals and cost-sharing waivers to financially needy Medicare beneficiaries."

In the past, hospital officials have often attempted to excuse themselves from providing charity care or discounts to financially needy hospital patients because of HHS rules and regulations, but Secretary Thompson has clearly indicated that such interpretations are without substantive justification and do not reflect his policies.

It will be recalled that the Medicare 100/100+ programs of CCHCC were terminated in 1998 by Diane Friedman, CEO of Provena Covenant Medical Center, because they supposedly violated Federal regulations about providing waivers of Medicare co-payments. This resulted in a lawsuit between Provena Covenant Medical Center and CCHCC that remains to be settled. And yet, Secretary Thompson has recently issued a statement that hospitals can provide discounts or waivers on their bills to financially needy patients, including Medicare beneficiaries. Claudia Lennhoff announced at the press conference that Provena Covenant Medical Center has agreed to meet with CCHCC in the near future to discuss the fate of the Medicare 100/100+ programs, and she is optimistic that an agreement can be reached.

The guidelines that have been established under Secretary Thompson have important implications for attempts on the part of consumer advocates and legislators to eliminate discriminatory billing practices on the part of the hospital industry and many physician clinics. As the letter from Mr. Davidson of AHA to Secretary Thompson made clear, patients who are uninsured or underinsured often pay the highest price for hospital services, while patients who receive coverage under Medicare, Medicaid, or a Health Maintenance Organization (HMO), often receive sizable discounts for such services. As a result, it is the working poor without health insurance who often receive the largest bills for hospital services.

As recently as last month (on Feb. 19th), State Senator Dale Righter, a Republican from Mattoon, Illinois, questioned the legality of a Senate bill that would require hospitals to provide a discount to needy uninsured patients, implying that this would violate Medicare or Medicaid regulations of the Department of Health and Human Services. This occurred during a session of the Senate Health and Human Services Committee when Senate Bill 552 (the Discriminatory Pricing Reform Act) was on the agenda under the chairmanship of State Senator Barack Obama, a Democrat from southside Chicago, who is one of the sponsors of the bill. The new guidelines that have been issued under Secretary Thompson attempt to lay such objections to rest.

It should be noted that Senate Bill 552 passed the senate committee by a 5-4 vote (Democrats voting in favor, Republicans voting against), and has been fowarded to the state legislature for further consideration. If Senate Bill 552 is passed by the legislature and signed into law by Governor Blagojevich, it would:

• Prohibit hospitals from collecting more than the cost of services for hospital care from uninsured patients whose income is below 300% of the Federal Poverty Level or who spend over 20% of their annual income on health care.

• Prohibit hospitals from undertaking debt collection activities until an assessment is done to determine whether the patient meets the Act's eligibility requirements.

Hopefully Senate Bill 552 will be passed into law in the State of Illinois in the near future. Similar laws are under consideration in New York and other states.

At the local level, both Provena Covenant and Carle Foundation Hospital have recently expanded their charity care programs:

• Provena Covenant Medical Center offers a 100% reduction in charges to patients with household incomes at 120% of the Federal Poverty Level (FPL) and below, while patients with household incomes up to 300% of FPL can qualify for a partial reduction of charges on a sliding scale.

• Carle Foundation Hospital offers a 100% reduction in charges to patients with household incomes at 150% of the Federal Poverty Level (FPL) and below, while patients with household incomes up to 250% of FPL can qualify for a partial reduction of charges on a sliding scale.

At the present time, the Federal Poverty Level is $8,980 for a single person, $12,120 for a couple, and $18,400 for a family of four. The charity care program of Provena Covenant Medical Center has been implemented for all hospitals that are managed by Provena Health.

In the past, neither local hospital was very outspoken about their charity care policies. CCHCC has received many complaints in the past from former hospital patients that they were taken into collections without anyone from the hospital informing them of the existence of a charity care program. On those occasions when patients did discover the existence of such a program, they were often told that it was too late to apply, or they did not qualify, even when they were too poor to pay off their hospital bills.

More recently, both hospitals have attempted to make members of the public more aware of the existence of their charity care programs. Both hospitals provide, or are planning to provide, information regarding charity care on brochures and their billing statements, and they have placed ads that describe the availability of charity care. Furthermore, the time limits on applying for charity care have been greatly relaxed. Provena Covenant Medical Center allows patients to apply for charity care at "any time," while Carle Foundation Hospital accepts applications for charity care prior to the instigation of court action. Thus, both hospitals have made considerable progress in making their charity programs more accessible to members of the public.

For those patients who are uninsured or underinsured, and fail to qualify for charity care under current guidelines, it is still possible to be sued by either one of the local hospitals (or their representatives) and taken to court over unpaid hospital bills. In the past, both Provena Covenant Medical Center and Carle Foundation Hospital have had former patients arrested over medical debt by requesting a "body attachment" should they fail to appear in court. There have been cases of former patients being handcuffed and incarcerated at the Champaign County Jail in Urbana, Illinois, even though some of these patients were living near or below the Federal Poverty Level, and were too poor to pay their bills. Fortunately, this is an unusual collection practice among non-profit hospitals, and even many for-profit businesses will not request body attachments in court.

As a result of a recent change in policy under CEO Mark Weiner, Provena Covenant Medical Center has terminated the use of body attachments while attempting to collect medical debts from former patients. However, Carle Foundation Hospital still retains its use for selected cases. The position of CCHCC is that the use of body attachments is not an appropriate collection practice for non-profit hospitals. CCHCC supports the discontinuation of body attachments by Provena Covenant Medical Center, and encourages Carle Foundation Hospital to discontinue this aggressive collection practice as well.

Here's the updated link:

http://www.cms.hhs.gov/providers/hospital.asp

In the Hospital Highlights Section, click on Secretary's letter if you wish to see Secretary Thompson's letter in its entirety, while the Questions & Answers document can be viewed in Acrobat format by clicking on Questions & Answers on changes to the Uninsured.