Medical debt has become a critical issue for a large number of low and moderate income individuals and families in the United States. Medical debt is the #1 cause of personal bankruptcy in this country. This is not just a problem of the uninsured, who now number nearly 47 million, and the poor. Millions of other people at all income levels have health insurance plans that fail them when they get sick þu including plans with high premiums and unaffordable deductibles that provide only limited benefits. When health insurance is non-existent or inapplicable, these people either forego needed health services or incur crushing debt.
Hospital community benefit programs, including those that provide both uninsured and underinsured patients with financial assistance, have become an increasingly critical and necessary part of the nation’s safety net. They are also a tool for addressing public health problems. The expectation that hospitals will provide these programs and services arises from a number of sources. In the case of nonprofit hospitals, the obligation is rooted in their tax-exempt status. Nonprofit hospitals receive billions of dollars in federal, state and local tax breaks every year and, in exchange, are expected to provide benefits that address the health care needs of the broader communities they serve.
Despite these obligations, research shows that nonprofit hospitals are increasingly engaging in egregious financial practices that push people with inadequate coverage into serious debt. These hospitals’ practices include:
Charging self-pay patients, on average, three times more for services than the amounts charged to patients with private insurance or covered by public programs;
Failing to screen uninsured and underinsured patients for eligibility for public or hospital financial assistance programs and then failing to provide them with enrollment assistance;
Requiring significant up-front payments before providing treatment;
Mounting extremely aggressive collection practices, including placing liens on patients’ property or garnishing their wages; and
Selling off patient accounts to third party lenders that charge exorbitant interest rates.
Community Catalyst’s Hospital Accountability Project is working with state and local health care advocates across the country to improve hospital practices so that uninsured and underinsured people are neither weighted down by medical debt nor dissuaded from seeking health care services. To support this state and local work, Community Catalyst is administering funds from a cy pres award realized from the court settlement of a major class action lawsuit against Tenet Hospital Corporation to coalitions of advocacy groups in 15 states. Community Catalyst supports these state and local advocacy efforts with policy expertise, advocacy tools and services.
The deadline for proposals for Hospital Accountability Project funding has passed. Check back in the coming weeks for details about funded projects.
The Hospital Accountability Project also works at the national level to promote public policies that set clear community benefit and financial assistance standards for hospitals and that establish strong consumer protection practices in billing.
Resources from Community Catalyst:
- Not There When You Need It: The Search for Free Hospital Care
- Free Care: A Compendium of State Laws
- The Patient Financial Assistance Act (Free Care Model Act)
- Health Care Community Benefits: A Compendium of State Laws
- The Health Care Institution Responsibility Model Act
- Commentary to the Health Care Responsibility Model Act
- The ABC’s of Negotiation: An Advocate’s Guide to Negotiating with Providers to Improve Access to Health Care Services
Free Care Projects:
- New York State Requirements Relating to Community Benefits and Free Care
- Hospital Community Benefits and Free Care Programs: An Initial Study of Seven Long Island Hospitals
- Hospital Free Care Programs: A Study of Sixteen Long Island Hospitals
- Neglected and Invisible: Understanding the Unmet Healthcare Needs of People on Long Island
- Getting Health Care When You Are Uninsured: A Survey of Uninsured Patients at Four Hospitals in Cleveland, Ohio
- Hospital Care Assurance Program in Ohio
- Mending the Safety Net: A Hospital-Community Collaboration Improves Access to Free Care in Columbus