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Glossary of Terms

OVERVIEW: Washington requires hospitals to establish charity care policies that provide for charity care and sliding fee schedule "sponsorship."  The law mandates minimum eligibility requirements for full charity care and sliding fee care and sets mandatory requirements around notification and application procedures.  The Department of Health reviews hospital policies and has authority to reject ones that do not meet the requirements established by law. 

CITATION:
Health Data and Charity Care
Revised Code of Washington §§ 70.170.010 to 70.170.905

Hospital Charity Care
Washington Administrative Code 246-453-001 to 246-453-090

TERMINOLOGY:
Charity care sponsorship
Indigent persons
Sliding fee schedule

REGULATORY OVERSIGHT:
The Department of Health shall have authority to do the following through regulation:

  • Establish and maintain uniform procedures, data requirements, and criteria for identifying patients receiving charity care;
  • Develop reasonable and uniform standards for collecting residual bad debt;
  • Develop guidelines to help hospitals establish sliding fee schedules;
  • Monitor compliance with EMTALA and the charity care statute’s anti-dumping provisions;
  • Monitor, evaluate, and report on charity care distribution across hospitals, with reference to factors such as the need for charity care in the hospital’s service area and trends in both public and private insurance; and
  • Assess the affect of charity care legislation on access to care.  Wash. Rev. Code § 70.170.060(4)-(8); see also Wash. Admin. Code 246-453-060 (regarding the prohibition on denying access to emergency care due to inability to pay). 

DEFINITIONS AND DISTINCTIONS:
“Bad debt” is defined as “uncollectible amounts, excluding contractual adjustments, arising from failure to pay by patients whose care has not been classified as charity care.”  Wash. Admin. Code 246-453-010(6).

“Charity care” is defined in statute as “necessary hospital health care rendered to indigent persons, to the extent that [they] are unable to pay for the care or to pay deductibles or co-insurance amounts required by a third-party payer, as determined by the [Department of Health]” (emphasis added).  Wash. Rev. Code § 70-170-020(4); compare with Wash. Admin. Code 246-453-010(5) (defining “charity care” as “appropriate hospital-based medical services provided to indigent persons”).

“Income” is defined as “total cash receipts before taxes derived from wages and salaries, welfare payments, Social Security payments, strike benefits, unemployment or disability benefits, child support, alimony, and net earnings from business and investment activities paid to the individual.”  Wash. Admin. Code 246-453-010(17).

An “indigent person” is a patient who has a) exhausted third-party payment options, including public programs, and b) whose income is either at or below 200 percent FPL or is insufficient to enable the person to pay either for care or for deductibles or coinsurance owed to third-party payors. Wash. Admin. Code 246-453-010(4).

"Sliding fee schedule" is defined as “a hospital-determined, publicly available schedule of discounts to charges for persons deemed eligible for charity care,” which are to be established in consideration of the Department of Health’s guidelines.  Wash. Rev. Code § 70.170-020(5). 

“Sponsorship status,” with regard to charity care requirements and “initial and final determinations of sponsorship,” refers both to a patient’s third-party health care coverage—or the lack thereof—and to the responsible party’s potential eligibility for charity care as an “indigent person” (see definition above).  See Wash. Admin. Code 246-453-010(19) and (20). 

FREE CARE AS A COMMUNITY BENEFIT: N/A

ELIGIBILITY REQUIREMENTS:
Hospitals shall develop, implement, and maintain charity care policies that give people living below the Federal Poverty Line access to appropriate hospital-based medical services.  Wash. Rev. Code § 70.170.060(5).  All individuals who are not eligible for public or private health coverage sponsorship and whose family incomes are equal to or below 100 percent FPL, adjusted for family size, shall be deemed charity care patients for the full amount of the hospital’s charges. Wash. Rev. Code § 70.170.060(5); Wash. Admin. Code 246-453-040(1).

Hospitals shall also develop, implement, and maintain a sliding fee schedule for discounts from hospital charges for those patients who do not qualify for full charity care.  Wash. Rev. Code § 70.170.060(5); Wash. Admin. Code 246-453-050.  At a minimum, individuals with family incomes between 100 and 200 percent FPL, adjusted for family size, are deemed indigent and qualify for discounts from charges in keeping with the hospital’s sliding fee schedule and policies regarding individual financial circumstances.  Wash. Admin. Code 246-453-040(2).  Hospitals may also classify individuals whose income exceeds 200 percent FPL, adjusted for family size, as indigent and eligible for a discount from charges.  Wash. Admin. Code 246-453-040(3).

In determining their sliding fee schedules, hospitals shall take into account the guidelines established in regulation by the Department of Health.  Wash. Rev. Code § 70.170.060(5); Wash. Admin. Code 246-453-050.  Currently, those guidelines are as follows:

  • Sliding fee schedules shall consider the level of hospital charges not covered by third-party sponsorship, as related to the family’s income;
  • Sliding fee schedules shall determine the maximum amount a responsible party will be expected to pay, while reserving management’s ability to reduce that amount based on individual circumstances;
  • Sliding fee schedules shall acknowledge the potential necessity for a responsible party to establish a payment plan over a reasonable period of time, without interest or late fees;
  • Sliding fee schedules shall specify the kinds of individual financial circumstances hospital personnel might take into account when adjusting the amount owed by an individual party (e.g., extraordinary medical expense, family assets, future income earning capacity).  Wash. Admin. Code 246-453-050(1). 

The regulations give examples of sliding fee schedules that de facto meet these guidelines.  See Wash. Admin. Code 246-453-050(2). 

FINANCING SOURCE:
Hospitals are assessed to cover the basic expenses of reporting and collecting hospital data as required under Chapter 70.170. Wash. Rev. Code § 70.170.080.

SERVICES COVERED:
“Appropriate hospital-based medical services” for which a patient/responsible party might receive charity care sponsorship are defined as follows:

“[H]ospital services which are reasonably calculated to diagnose, correct, cure, alleviate, or prevent the worsening of conditions that endanger life, or cause suffering or pain, or result in illness or infirmity, or threaten to cause or aggravate a handicap, or cause physical deformity or malfunction, and there is no other equally effective more conservative or substantially less costly course of treatment available or suitable for the person requesting the service.” Wash. Admin. Code 246-453-010(7).

Section 246-453-050(3) of the Administrative Code expressly excludes charges for professional services offered by the hospital’s medical staff that are either billed separately by the individual medical staff or separately identified within the hospital’s billing system from inclusion in the hospital’s sliding fee schedule.  See also Wash. Rev. Code § 70.170.060(5). 

NOTIFICATION REQUIREMENTS:
Hospitals shall notify individuals who may be eligible for charity care.  Wash. Rev. Code § 70.170.060(5). 

Notice that hospital charges may be waived or reduced must be made publicly available. Wash. Admin. Code 246-453-020(2).   In this context, “publicly available” is defined to mean “posted or prominently displayed within public areas of the hospital, and provided to the individual in writing and explained… in any language spoken by more than 10 percent of the population in the hospital’s service area, and interpreted for other non-English speaking or limited-English speaking or other patients who [cannot] read or understand the writing and explanation.”  Wash. Admin. Code 246-453-010(16).

APPLICATION PROCESS:
Generally speaking, each hospital shall make every reasonable effort to determine the following:

  • Whether a patient has public or private health coverage sponsorship;
  • The patient’s family income, as classified under the federal poverty guidelines; and
  • The patient’s eligibility for charity care, as defined by law and under the hospital’s charity care policy.  Wash. Rev. Code § 70.170.060(6); see also Wash. Admin. Code 246-453-020(4).

While the particular components of an application process for charity care and discounted charge sponsorship are left for individual hospitals to determine, the regulations set some standards with which every hospital applications procedure must comply, as follows: 

  • Hospitals must give public notice of a possible waiver or reduction in charges for persons who qualify for charity care sponsorship under Section 246-453-040 of the Administrative Code. Wash. Admin. Code 246-453-020(2).
  • Collections—defined here to include billing—cannot begin until the hospital has made an initial determination of sponsorship status. Wash. Admin. Code 246-453-020(1)(a).  This includes an initial determination of both third-party sponsorship status (i.e., whether a person has private or public health insurance) and charity care sponsorship status (i.e., whether the patient/responsible party is an “indigent person” eligible for free or discounted care).  Wash. Rev. Code § 70.170.060(6); Wash. Admin. Code 246-453-020(1).   The initial determination should take place at the time of admission or as soon as possible after services have begun.   Wash. Admin. Code 246-453-020(1)(b).  
  • Hospitals must make every reasonable effort to determine whether a patient might be eligible for third-party sponsorship that would cover all or some of the charges.  Wash. Admin. Code 246-453-020(4).
  • If the initial determination reveals that the party responsible for the patient’s account may meet the definition of “indigent person” (see Definitions and Distinctions, above), collection efforts must cease until a final determination of sponsorship is made.   Wash. Admin. Code 246-453-020(1)(c).
  • Hospitals may use an application process that attests to the accuracy of information when determining whether an individual qualifies for charity care sponsorship.  Wash. Admin. Code 246-453-020(5).  However, the application procedures they use a) may not place unreasonable burdens on the responsible party and b) must take the individual’s physical, mental, intellectual, and sensory deficiencies and linguistic barriers into account.  Id.  Requests for information to verify charity care status must be “reasonably necessary,” “readily available,” and limited to relevant facts.  Wash. Admin. Code 246-453-030(5).  In no event can such requests deter people from seeking charity care. Id. 
  • Once an initial determination identifies a patient/responsible party as an “indigent person,” that person must be given at least fourteen (14) calendar days—longer, if reasonably necessary or required by the patient’s medical condition—to present documentation necessary to make a final determination of sponsorship status.  Wash. Admin. Code 246-453-020(3). 
  • A hospital that has received the information required to make a final determination of charity care sponsorship status must notify the applicant of its final decision, including any amount for which the applicant will remain responsible, within fourteen (14) calendar days.  Wash. Admin. Code 246-453-020(7); see also Wash. Admin. Code 246-454-030.  If the hospital denies an application for charity care sponsorship, it must notify the applicant of the denial, give its reasoning, and provide information on how the applicant might appeal the decision. Wash. Admin. Code 246-453-020(8).

Standards for application procedures.  As stated above, hospitals have the option of establishing applications procedures to determine charity care sponsorship status.  The regulations give guidelines as to what hospitals may require when making both the initial and final determination of eligibility for charity care sponsorship.  Hospitals may rely on oral information from the patient/responsible party when making the initial determination of eligibility for charity care sponsorship, and they may ask the patient/responsible party to sign an attestation to the accuracy of this information.  Wash. Admin. Code 246-453-030(1).  For purposes of making a final determination of charity care sponsorship status, any of the following documents are considered sufficient evidence:

  • W-2 withholding statement;
  • Pay stubs;
  • Most recent income tax return;
  • Forms approving or denying Medicaid eligibility;
  • Forms approving or denying unemployment compensation; or
  • Written statements from employers or welfare agencies. Wash. Admin. Code 246-453-030(2).

If the individual cannot provide any of these forms, the hospital must rely on a written and signed statement.  Wash. Admin. Code 246-453-030(4).  If the person’s identification as an indigent person is obvious, the hospital does not need to establish the exact income level or request the above documentation before qualifying him or her for charity care.  Wash. Admin. Code 246-453-030(3).  Failure to reasonably complete appropriate applications procedures is sufficient grounds for the hospital to initiate collection efforts against the responsible party.  Wash. Admin. Code 246-453-020(5).

Timing of the eligibility determination.  While hospitals should make reasonable efforts to make timely determinations of charity care sponsorship, they may designate a patient account as eligible for charity care sponsorship at any time that they receive documentation or otherwise become aware that a responsible party’s income is equal to or below 200 percent FPL.  Wash. Admin. Code 246-453-020(10).  If the responsible party has made payments on an account and is later found to have been eligible for charity care sponsorship at the time the services were rendered, the hospital has thirty (30) days to refund any amounts paid in excess of the waiver or discount for which the individual should have qualified. Wash. Admin. Code 246-453-020(11). 

GRIEVANCE/APPEAL PROCESS:
Hospital appeals procedures must notify and enable responsible parties to correct deficiencies in documentation, to request review of the denial, and to request the results of such review by the hospital’s chief financial officer or an equivalent.  Wash. Admin. Cod 246-453-020-(9).  The hospital must notify responsible parties that they have thirty (30) calendar days to request an appeal. Wash. Admin. Cod 246-453-020-(9)(a).  During the first fourteen (14) days of this appeals period, the hospital may not refer the account in question to an external collection agency.  Id.  If, however, no appeal has been filed after the first fourteen (14) days, collection proceedings may begin.  Id.  If an appeal is subsequently filed, the collection proceedings must stop until a final decision is made.  Wash. Admin. Cod 246-453-020-(9)(b).

If the hospital’s review under appeal affirms its decision, the case is sent to the Department of Health for review.  Wash. Admin. Cod 246-453-020-(9)(c).  If the Department determines that the denial of charity care was inappropriate, it may seek penalties. Wash. Admin. Cod 246-453-020-(9)(d). 

REPORTING REQUIREMENTS:
Each hospital must submit its charity care policies, procedures, and sliding fee schedules to the Department of Health for review.  Wash. Admin. Code 246-453-070(1).  Hospitals must also develop and submit policies and procedures on bad debt, including reasonable and uniform standards for collection, to the Department for review.  Wash. Admin. Code 246-453-070(2).  These standards must be incorporated into each hospital’s accounts receivable management manuals and should cover preadmission, admission, discharge, outpatient registration and discharge, billing, credit, and collections procedures.  Id.   Subsequent modifications to charity care and bad debt policies or procedures must be submitted to the Department at least thirty (30) days before they go into effect.  Wash. Admin. Code 246-453-070(1)-(2). 

The Department of Health shall reject bad debt and charity care policies and procedures that violate the provisions of these sections. Wash. Admin. Code 246-453-070(3).  Where this is the case, the Department must notify the hospital of its rejection via mail within fourteen (14) days of its receipt of said policies.  Id.  The hospital then has fourteen (14) days to revise and resubmit the policies and procedures in question.  Id. 

Each hospital must also compile and report data to the Department with regard to the amount of charity care provided in compliance with Department instructions. Wash. Admin. Code 246-453-080.

The Department of Health shall prepare reports that identify problems with charity care distribution at least once a year.  Wash. Rev. Code § 70.170.060(7)-(8).  This report shall include a) an assessment of the effects charity care legislation has on the public’s access to hospital and health care services; and b) an evaluation of all hospital care purchasers’ contributions to charity care.  Id.

PENALTIES FOR NONCOMPLIANCE:
Any person who either violates or knowingly aids and abets in the violation of Section 70.170.060(5) (requiring hospitals to establish and maintain charity care policies and sliding fee schedules and to notify patients who may be eligible for charity care) or Section 70.170.060(6) (requiring hospitals to make an initial determination of insurance coverage prior to proceeding to collect from a patient, among other things) of the Revised Code and of regulations related to those Sections will be guilty of a misdemeanor.  Wash. Rev. Code § 70.170.070(1); see also Wash. Admin. Code 246-453-090(2).  Once official notice of the alleged violation is given to the Department of Health, every day of noncompliance thereafter shall constitute a separate violation.  Id.  Persons who violate the provisions of Chapter 70.170 may be enjoined from continuing such violations.  Id.  The Department of Health may also level civil monetary penalties up to $1,000 for violations of this Chapter.  Id. 

Washington’s compliance scheme extends to expressly prohibit hospital practices that result in: a) a significant reduction in the proportion of patients they see who are uninsured and unable to pay for services; b) a significant reduction in the proportion of people admitted for inpatient treatment for which the hospital is likely to be reimbursed at a below-cost or below-charge rate; c) EMTALA violations (e.g., refusing emergency care services based on inability to pay); and d) refusal to treat patients whose care would require “unusually costly or prolonged treatment” (with exceptions for instances in which such refusal would be appropriate).  Wash. Rev. Code §§ 70-170-060(1)-(2); see also Wash. Admin. Code 246-453-010(10) (defining “unusually costly or prolonged treatment”).  The Department of Health shall develop rules and monitor hospitals for compliance with these provisions and shall report possible violations to the Attorney General or to the appropriate federal agency (for EMTALA).  Wash. Rev. Code § 70.170.060(3).  Violation of these provisions, including a failure to perform any duties they create, is subject to both civil and criminal penalties.  Wash. Rev. Code § 70.170.070(2).  Initial violations shall result in an individual being charged with a misdemeanor. Wash. Rev. Code § 70.170.070(2)(a).  The Department of Health may also impose a civil penalty of up to $1,000.  Id.  If a person is found guilty a subsequent violation within five years of this conviction, they shall again be charged with committing a misdemeanor, and the Department of Health may levy a civil monetary fine of up to $3,000. Wash. Rev. Code § 70.170.070(b).  If, however, an individual is found to have committed a subsequent violation of these provisions with intent, he or she shall also be prohibited from issuing tax-exempt bonds and from applying for, or receiving, a certificate of need for up to three years. Wash. Rev. Code § 70.170.070(2)(c).  Further violation of these provisions within five (5) years of a conviction under subsection (c) will result in the same criminal and civil penalties outlined in subsections (a) and (b) above as well as a one-year prohibition from participating in Medicaid and state public programs. Wash. Rev. Code § 70.170.070(2)(d).  
 
Failure to file the policies, procedures, or sliding fee schedules or charity care reports as discussed above (see Reporting Requirements) shall constitute a violation of Section 70.170.060 of the Revised Code.  Wash. Admin. Code 246-453-090.  The Department of Health shall levy a civil monetary penalty of $1,000 for every day the violation occurs, following official notification of the violation.  Id.

OTHER:
The Washington State Department of Health compiles an report on charity care each year, and it is made publicly available.  The latest annual report can be found on the Washington Hospital Association's website.

The Department of Health also maintains a current listing of each hospital's actual approved charity care policies on the state's website.

Washington LawHelp has produced a detailed, user-friendly resource, "Charity Care", which provides a thorough explanation of Washington's charity care system, and includes sample letters and forms that advocates can use to request assistance with medical bills.