Nonprofit hospitals expand charitable care, but not all changes are positive

About 84% of nonprofit hospitals updated their charitable care policies from 2019 to 2021, at the height of the COVID-19 pandemic, and according to findings published in Open JAMA Networkthese updated policies have resulted in mostly positive changes.

However, restrictions in charitable care and unclear eligibility criteria are still common and deserve regulatory attention, the authors found.

Overall, 127 of the 170 hospitals in the sample made substantial changes to their charitable care policies, with 242 distinct policy changes in categories such as income eligibility thresholds, asset limitations, and service exclusions.

While most hospitals have expanded charity care, a statistically significant minority, nearly 8%, have actually restricted their charity care.

Unpublicized or vague eligibility criteria – which remain persistent issues – can limit patients’ understanding of charitable care policies and obscure the full extent of policy changes over time. The authors said policymakers should consider requiring greater transparency and simplification of charitable hospital care policies to ensure adequate access to care for uninsured and underinsured patients.

WHAT IS THE IMPACT

Many people rely on charity hospital care to ease the financial burden of healthcare costs; this reliance has been particularly significant during the COVID-19 pandemic given the associated increase in job losses and disabilities.

The specific policy changes primarily involved six criteria: income thresholds for free and discounted care, residency status, presumed eligibility, length of coverage, and underinsured eligibility.

Despite the generally positive changes, some concerns remained. Among the minority of hospitals that restricted charitable care, residency requirements were most frequently restricted, often by limiting access based on immigration status. Some hospitals have added unusual service restrictions such as excluding coverage for services in the custody of law enforcement and excluding birth control.

In addition to this, charity care policies continue to use vague language, especially for eligibility criteria such as assets, which limits patient understanding of charity care policies and can obscure policy changes. over time, the authors said. Third-party tools for determining eligibility are common and may further limit the transparency of eligibility requirements.

Additionally, although underinsured eligibility expanded among the hospitals in the sample, when hospitals addressed specific insurance scenarios common to underinsured status – such as cost sharing and out-of-pocket services network – the results were mixed. Of the hospitals that have limited cost-sharing coverage, some have alluded to contracts with insurers that limit coverage for charitable care, which the authors say is contrary to the spirit of the health care requirements. community benefits from tax-exempt hospitals. The impact of these types of changes on insured patients is complex and difficult to fully assess, given the geographic variations in health costs and insurance networks.

The expansion of Medicaid reduces the uninsured population and could cause hospitals to adopt more generous charitable care policies, but since the results of the specific analysis do not provide enough evidence for this, it remains merely speculation.

THE GREAT TREND

Although information on charity care is sparse, a 2019 report from California Healthline found that hospitals in that state are providing significantly less charity care to low-income patients since the Affordable Care Act took effect. .

As a proportion of their operating expenses, general acute care hospitals across the state spent less than half on such patients in 2017 compared to 2013, according to data the hospitals reported to the California Office of Planning and Development. statewide health development.

The largest drop in charitable care spending occurred from 2013 to 2015, when it fell from just over 2% to just under 1%. Spending has continued to fall since then, although less dramatically.

Health experts attribute much of the decline in charitable care spending to the implementation of the ACA. The law extended insurance coverage to millions of Californians starting in 2014, and hospitals are now treating far fewer uninsured patients who cannot afford the care they receive.

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