Pennsylvania

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Glossary of Terms

OVERVIEW: Pennsylvania has no free care requirement per se.  Its Uncompensated Care Program, which partially reimburses participating hospitals for the uncompensated care they provide, contains some minor notification and reporting requirements as a condition of reimbursement.

CITATION:
Hospital Uncompensated Care
35 Purdon’s Pennsylvania Consolidated Statutes §§ 5701.1101 to 5701.1108

Health Care Cost Containment Act
35 Pennsylvania Statutes §§ 449.1 to 449.19.
(Note: The Health Care Cost Containment Act will sunset on June 30, 2014, unless it is reenacted prior to that date.  35 Pa. Cons. Stat. § 449.19.)

TERMINOLOGY:
Charity care
Indigent care
Uncompensated care
Medically needy

REGULATORY OVERSIGHT:
The Department of Public Welfare (hereinafter “DPW”) has regulatory authority to administer the Uncompensated Care Program, which deals almost exclusively with hospitals’ eligibility to receive reimbursement monies for the uncompensated care they provide. 35 Pa. Cons. Stat. § 5701.1103(b).  In administering this program, DPW has the authority to set uniform reporting requirements for charity care and bad debt expenses. Id. 

The Health Care Cost Containment Council serves a related function: it is an independent council with authority to independently audit all information health care providers are required to submit to DPW.  35 Pa. Cons. Stat. § 449.5(c). The Health Care Cost Containment Council is also charged with analyzing the medically indigent population, the magnitude of uncompensated care, the degree of access to and the result of any lack of access by the medically indigent to appropriate care, the types of providers and the settings in which they provide indigent care and the cost of the provision of that care. 35 P.S. § 449.8(B)(1).

DEFINITIONS AND DISTINCTIONS:
With regard to Pennsylvania’s Uncompensated Care Pool, the following terms are relevant:

“Bad debt expense” is defined as “the cost of care for which a hospital expected payment from the patient or a third-party payor, but which the hospital subsequently determines to be uncollectible.” 35 Pa. Cons. Stat. § 5701.1102.

“Charity care expense” is defined as “the cost of care for which a hospital ordinarily charges a fee but which is provided free or at a reduced rate to patients who cannot afford to pay but who are not eligible for public programs and from whom the hospital did not expect payment in accordance with the hospital’s charity care policy.” 35 Pa. Cons. Stat. § 5701.1102.

"Extraordinary expenses" are defined as “The cost of hospital inpatient services provided to an uninsured patient which exceeds twice the hospital's average cost per stay for all patients.” 35 Pa. Cons. Stat. § 5701.1102.
 
“Uncompensated care” is defined as “the cost of care provided to patients financially unable or unwilling to pay for services provided by a hospital. This cost shall be determined by the [Health Care Cost Containment] Council utilizing reported data and the hospital’s cost-to-charge ratio and shall include charity care expense and bad debt expense.” 35 Pa. Cons. Stat. § 5701.1102.

An individual is defined as "uninsured" under the following circumstances: he or she lacks health insurance coverage; has insurance coverage, but the insurer does not reimburse for medically necessary services provided by a hospital; or does not receive benefits under a publicly funded health care program. 35 Pa. Cons. Stat. § 5701.1102.

“Indigent care” is defined as “the actual costs, determined by the [Health Care Cost Containment] Council, for the provision of appropriate health care, on an inpatient or outpatient basis, given to individuals who cannot pay for their care because they are above the medical assistance eligibility levels and have no health insurance or other financial resources which can cover their health care.” 35 Pa. Cons. Stat. § 449.3.

FREE CARE AS A COMMUNITY BENEFIT:
Free and discounted care is counted as community benefit for “institutions of purely public charity,” e.g., institutions that qualify for tax-exempt status.  See 10 Pa. Cons. Stat. § 375.

ELIGIBILITY REQUIREMENTS: N/A

FINANCING SOURCE:
Monies from the Tobacco Settlement Act are used to annually compensate hospitals for part of the uncompensated care they provide to patients via DPW’s Hospital Uncompensated Care Program. 35 Pa. Cons. Stat. § 5701.1103(a). 

There is also a Hospital Extraordinary Expense Program which reimburses hospitals for extraordinary expenses in treating the uninsured on an inpatient hospital basis. In order to receive payment from this Program, a hospital cannot be receiving payment from the Hospital Uncompensated Care Program. 35 Pa. Cons. Stat. § 5701.1105.  Extraordinary expense is the cost of inpatient services provided to an uninsured patient which exceeds twice the hospital’s average cost per stay for all patients. 35 Pa. Cons. Stat. § 5701.1102.

SERVICES COVERED: N/A

NOTIFICATION REQUIREMENTS:
In order to receive reimbursement from the state’s Uncompensated Care Program, hospitals must post adequate notice of the availability of medical services and the obligations of hospitals to provide free services.  35 Pa. Cons. Stat. § 5701.1104(B).

APPLICATION PROCESS: N/A

GRIEVANCE/APPEAL PROCESS: N/A

REPORTING REQUIREMENTS:
In order to receive reimbursement from the state’s Uncompensated Care Program, hospitals must attest that they a) have a plan in place to serve the uninsured and b) meet the following criteria:

1. Accept all individuals regardless of the ability to pay for emergent medically necessary services;
2. Seek collections of a claim, either from an insurer or through payment plans with the patient;
3. Attempt to obtain health coverage for patients, including assisting patients in applying for Pennsylvania’s Adult Basic Coverage Insurance ProgramMedicaid or SCHIP;
4. Ensure that an emergency admission or treatment is not delayed of denied pending determination of coverage or requirement for prepayment or deposit;
5. Post adequate notice of the availability of medical services and the obligations of hospitals to provide free services; and
6. Provides data to the Health Care Cost Containment Council (see Reporting Requirements).  35 Pa. Cons. Stat. § 5701.1104(B).

DPW determines the level of aid hospitals are eligible for based on the annual data the hospitals submit. 35 Pa. Cons. Stat. § 5701.1104(A).  DPW is charged with notifying hospitals of the uniform reporting requirements for uncompensated care.  Each hospital is given an annual uncompensated care score which is based on this collected data.  35 Pa. Cons. Stat. § 5701.1104(C). The reporting requirements should address the following:

1. Patient eligibility for other public or private coverage;
2. Income eligibility threshold based on family size;
3. Consideration of other resources available to a patient or responsible party;
4. Patient or responsible party employment status and earning capacity;
5. Other financial obligations of the patient or responsible party; and
6. Other sources of funds available to the hospital such as endowments or donations specified for charity care. 35 Pa. Cons. Stat.§ 5701.1103(D)(2).

On January 1, 2002, it became a requirement for hospitals to report uncompensated care information to the Health Care Cost Containment Council in order to receive payments under the Hospital Uncompensated Care Program. 35 Pa. Cons. Stat. § 5701.1103(D)(3).  If a hospital knowingly violates any of the requirements for the Hospital Uncompensated Care Program or the Hospital Extraordinary Expense Program, it can be assessed a penalty of up to $50,000. 35 Pa. Cons. Stat. § 5701.1108.

PENALTIES FOR NONCOMPLIANCE: N/A

OTHER:
As a condition of reimbursement from the Uncompensated Care Program, hospitals must attempt to obtain health coverage for patients.  35 Pa. Cons. Stat. § 5701.1104(B).  This includes providing them with assistance in applying for public insurance programs like SCHIP and Adult Basic Coverage.  Id.