Alabama

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Glossary of Terms

OVERVIEW: Alabama law does not require medical providers or hospitals to provide free care or financial assistance to indigent state residents. However, if a hospital has a financial assistance policy, it must conspicuously post information about the policy in its admission area and on its website.  Hospitals are also required to provide patients with written information about their financial assistance criteria with each copy of a hospital bill. The Health Care Responsibility Act places financial responsibility for the reimbursement of “indigent care” on the state's counties.  The Hospital Service Program was established in 1957 as a means whereby counties could reimburse hospitals for indigent residents’ hospitalizations; however, that Program has never been funded.  Note that the Hospital Service Program expressly prohibits physicians from collecting public funds as reimbursement for care rendered to indigent patients under this program, even as it permits them to bill the indigent patient for those services. 

CITATION:
Alabama Health Care Responsibility Act/Financial Responsibility for Indigent Health Care
Alabama Code §§ 22-21-290 to 22-21-297

Hospital Service Program for Indigents
Alabama Code §§ 22-21-210 to 22-21-227

Financial Assistance Policies
Alabama Code §§ 22-21-300

Health Care for the Medically Indigent
Alabama Administrative Code § 410-2-2-.06

TERMINOLOGY:
Indigent care
Charity care
Financial assistance

REGULATORY OVERSIGHT:
The Alabama State Board of Health (hereinafter “the Board”) administers the Hospital Service Program for Indigents (hereinafter “the Program”) through the State Health Department.  Ala. Code § 22-21-212.  The Board shall promulgate and adopt regulations necessary for administering the Program, including the following:

• Reporting requirements for participating counties and hospitals;
• Criteria for accepting hospitals as Program participants;
• Methods and standards for determining patient eligibility; and
• Methods of determining reimbursable costs for participating hospitals. Id.

DEFINITIONS AND DISTINCTIONS:
“Bad debt” is defined in regulation as “the unpaid charges/rates for services rendered from a patient and/or third party payer, for which the provider reasonably expected payment.”  Ala. Admin. Code r. § 410-2-2-.06(1)(d).

“Charity care” is defined in regulation as “health services for which a provider's policies determine a patient is unable to pay,” valued at the provider’s charge for services rendered.  Ala. Admin. Code r. § 410-2-2-.06(1)(e).

An “indigent,” for purposes of determining eligibility for the Hospital Service Program, is anyone who has resided continuously in Alabama for at least one year, “is acutely ill or injured and can be helped markedly by treatment in a hospital,” and is unable to pay the cost of hospitalization.  Ala. Code §§ 22-21-210(2); 22-21-292(2).

FREE CARE AS A COMMUNITY BENEFIT: N/A

ELIGIBILITY REQUIREMENTS:
The Health Care Responsibility Act.  The Alabama Legislature enacted the Health Care Responsibility Act with the goal of placing ultimate financial responsibility for the unreimbursed cost of care to indigents on their counties of residence.  Under the Act, the Department of Human Resources has responsibility for establishing a statewide eligibility standard that certifies patients as “indigent.”  Ala. Code §210 and 22-21-294.  The statutory definition of “indigent” for purposes of the Act mirrors the definition used for the Hospital Service Program.  Ala. Code 1975 § 22-21-292(2). Counties may establish less restrictive eligibility standards for the Program than those laid out by the statute.  Ala. Code 1975 § 22-21-294.

The Hospital Service Program.  County participation in the Hospital Service Program is voluntary, but counties that choose to participate are eligible for State funding as appropriated annually by the State Board of Health.  See Ala. Code §§ 22-21-210(5); 22-21-211; 22-21-220.  In order for health care services rendered to an indigent person to be eligible for reimbursement from the Hospital Service Program, the individual must a) be examined by a physician who will attest to his or her general need for hospitalization and have that finding confirmed by hospital medical staff; and b) be certified as “indigent” by the county’s admissions committee (see Application Process).  Ala. Code 1975 §§ 22-21-210 and 22-21-216. 

FINANCING SOURCE:
Under the Alabama Health Care Responsibility Act, the county in which an indigent person resides bears ultimate responsibility for the unreimbursed cost of medical treatment from government and third party payers.  Ala. Code § 22-21-291; Ala. Code § 22-21-212 (limiting the amount of reimbursement to participating hospitals to the “nonprofit basic per diem costs of hospitalization” for that particular institution); Ala. Admin. Code r. § 410-2-2-.06.  In those cases in which an indigent resident has been referred to a hospital outside the county for care, the county’s financial responsibility is limited to payment for 30 days of hospitalization costs or the state Medicaid rate, whichever is lower.  Ala. Code 1975 § 22-21-293.  With the exception of payment for emergency care, counties are not required to pay for services received outside their borders when a local hospital could have provided the same service. Id.

Though there is promising language in the statute about state and county funding for the Hospital Service Program, the Program itself has never actually been funded.

SERVICES COVERED:
The Hospital Service Program expressly excludes reimbursement for home health services or for long-term care for the disabled and chronically ill and for professional medical services (including physician services) received while hospitalized.  Ala. Code §§ 22-21-211; 22-21-212; and 22-21-219. 

NOTIFICATION REQUIREMENTS:
Hospitals shall include written information regarding their financial assistance policies with each hospital bill.  Ala. Code §§ 22-21-300(b)(1).  Hospitals are also required to conspicuously post a sign in the admission and registration areas with the following language: "You may be eligible for financial assistance under the terms and conditions the hospital offers to qualified patients.  For additional information, contact the hospital financial assistance representative."  Ala. Code §§ 22-21-300(b)(2).  The sign shall be posted in English and any other language that is the primary language of at least five percent of the hospitals annual patient base.  Ala. Code §§ 22-21-30(b)(3).  Each hospital that maintains a website shall also prominently display a notice on its website regarding its financial assistance application procedure.  Ala. Code §§ 22-21-300(b)(4).          

APPLICATION PROCESS:
Every county participating in the Hospital Service Program is required to appoint an Admissions Committee, which determines whether an applicant to the Hospital Service Program meets the definition of “indigent.”  Ala. Code §§ 22-21-214; 22-21-215.  Each county Admissions Committee shall establish rules and regulations governing the admission of indigents consistent with the statute and with regulations promulgated by the State Board of Health.  Ala. Code § 22-21-215.  In addition to determining indigence, the Admissions Committee has the authority to determine whether a local participating hospital has inadequate resources to provide indigent care and to approve receipt of hospital services in a different county.  Ala. Code § 22-21-219.  The Admissions Committee shall meet at least monthly.  Ala. Code § 22-21-214. 

GRIEVANCE/APPEAL PROCESS: N/A

REPORTING REQUIREMENTS:
Providers report charity care based on their individual charge rates.  Ala. Code § 410-2-2-.06.

PENALTIES FOR NONCOMPLIANCE:
There are no penalties for noncompliance since county participation in the Hospital Service Program for Indigents is completely voluntary.  Ala. Code §§ 22-21-210(5); 22-21-211. 

Counties are “encouraged” to provide adequate resources to fulfill the obligations mentioned in the Hospital Service Program and Alabama Health Care Responsibility Act—namely, to bear ultimately responsibility for the health care costs incurred by their indigent residents.  Ala. Admin. Code r. § 410-2-2-.06.

OTHER:
Participating hospitals that treat indigent patients under the Hospital Service Program are not barred from collecting unreimbursed costs from indigent patients or third parties. Ala. Code § 22-21-219.  The regulations do note that “[p]roviders should pursue collections based upon economic means based policies in order to recover part of the cost of uncompensated care, and according to generally accepted standards.”  Ala. Admin. Code r. § 410-2-2-.06. 

The Certificate of Need (hereinafter “CON”) review process shall include the historical and projected charity care provided by each CON applicant, as well as the impact CON approval will have on access to care for the medically indigent.  Ala. Admin. Code r. 410-2-2-.06.