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Aid Urged for Needy Patients

A trade group of California hospitals is asking its members to limit the payments they require from some uninsured people.

February 12, 2004|Lisa Richardson | Times Staff Writer

Under pressure from consumer advocates and legislators, the California hospital industry trade group is asking its members to ease their collection policies and provide financial aid to low-income uninsured patients.

The California Healthcare Assn.'s new guidelines, which are voluntary, were presented to Gov. Arnold Schwarzenegger on Wednesday.

The most dramatic recommendation is for hospitals to hold payments from uninsured patients at or below 300% of the federal poverty level to rates paid by Medicare and other government-sponsored programs.

Those payments would often amount to thousands of dollars less than is typical now.

Most hospitals already have policies that discount bills to low-income patients, said Fred Harder, vice president for policy at the healthcare association. The guidelines, however, seek to standardize policies in a way that would be clear to hospital administrators and patients.

"Hospitals for years have worked with poor people and offered charity care," Harder said.

"But the headlines don't focus on that. We've been beat up enough for an issue that has not received comprehensive and fair play. Now we're trying to raise the awareness of this publicly."

In particular, the hospital industry has been faulted by consumer advocates for charging uninsured patients more than those who are insured, and for over-aggressive efforts to collect. Those efforts have included garnishing wages and attaching liens on patients' homes -- practices the association recommends discontinuing.

"There's evidence in California that uninsured patients pay by far the highest proportion of billed charges" of any group in the state, said Gerald Kominski, associate director of the UCLA Center for Health Policy Research. Most patients with healthcare coverage are asked to pay from 25% to 30% of billed charges, he said, while uninsured patients are asked to pay 50% to 55%.

The association, however, cites different statistics. California hospitals, it maintains, collect only 4% to 8% of all payments from the entire population of uninsured patients.

While the guidelines are a positive step, they also are an astute political move, Kominski said.

"This may be an effort on the part of the industry to try and preempt legislative action or legal remedies," Kominski said.

"Like any voluntary guideline, there is potential for hospitals not to engage. But it's smart of the association to try to get out in front of this issue, and it would be smart of hospitals to comply with these guidelines."

The guidelines are an acknowledgment by the hospital industry that billing policies are rife with inconsistencies, said Laurence Lavin, director of the National Health Law Program.

"It is evidence of the growing pressures on the hospitals to address this issue," Lavin said.

Harder acknowledged that the association had begun working on the voluntary guidelines after the introduction of legislation in February 2002 that would force hospitals to undertake steps considered "draconian" by the association membership.

The bill, AB232, would offer charity care or discounts under certain circumstances to families with incomes of as much as 700% of the federal poverty level.

Assemblywoman Wilma Chan (D-Oakland), sponsor of the bill the association decries, maintained that voluntary guidelines would not be enough. Medical expenses are now the leading cause of bankruptcy, Chan said, and patients need dramatic relief from hospital bills.

Elena Ackel, staff attorney at the Legal Aid Foundation of Los Angeles, agreed.

Ackel, who represents low-income clients in billing disputes with hospitals, said it is inappropriate to use collection agencies to obtain payments from low-income patients.

The hospital association is recommending that such collections be delayed by several months.

"Them calling you 10 times is not going to help you find $10,000," she said.

Catholic Healthcare West, which operates 37 hospitals in California, said it would implement the guidelines by summer.

"From our perspective, this builds on exactly where we have been going as a system, and we see this as the next logical step within the state of California relative to uninsured patients," said Shelly Shlenker, vice president for public policy and advocacy for the chain.

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