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January 16, 2012

A Snapshot: Is Free Care in Minnesota What It Appears?

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With any luck, we’ve finally left the worst of the financial crash behind, and with it the financial challenge posed by large numbers of medically indigent patients.  A recent report from Minnesota’s hospital trade group underscores how bad things were for patients. It also suggests that the hospitals may not quite be as charitable as they claim.

According to the report, the level of free or discounted care provided by the state’s hospitals shot up 27 percent in 2010, driven largely by falling state coverage and rising unemployment.  The Minnesota Hospital Association said that state hospitals provided $226 million in charity care last year, along with $498.5 million expenses generated by Medicaid patients receiving discounted care that wasn’t reimbursed.

OK, let’s break this down. We’ve got, very broadly, $750 million in direct charity care expenses among 135 hospitals.  While I don’t know exactly what they grossed in 2010, we can be pretty sure it exceeds that figure by at least three or four orders of magnitude.

Sure, several million in charity care per hospital is enough to erode the slim margin most hospitals cope with year to year.  On the other hand, we know it’s not a simple matter of money in, expenses paid for charity care.  The accounting gets more complicated than seven-way chess, and let’s admit it, some of the numbers are a bit dicey at best.

Now, I’m not suggesting any individual hospital is gaming the system worse than others. But I am suggesting that if this is the best they can come up with, they’d better get cracking. Neither the IRS or Congress has much patience for charity care numbers that don’t add up, and municipalities (at least in Illinois) are getting into the “yank the tax exemption” act too.

Bottom line, you better keep your nose clean and those charity care numbers better be above board. If you’re not already, it’s time to avoid accounting tricks and play it straight.

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November 14, 2011

Hospitals play unfair games with Medicare observation status

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Most hospital visitors don’t care a whole lot whether they’re classed as inpatients or outpatients  — unless it affects the size of their bill. But lately, many patients are getting hit with unexpected fees after spending days in a hospital, thanks to tricks hospitals are playing in an effort to lower their readmission rate numbers, a newly-filed lawsuit contends.

These days, hospitals are under intense pressure to lower readmission rates, as such rates figure into their ratings on various types of quality scales.  In some cases, of course, they have no direct control of this number, as readmissions often have far more to do with the care they receive from community physicians and their willingness to comply with discharge instructions.

But ever-resourceful administrators have found a loophole that allows them to rejigger the admissions numbers. Under Medicare rules, they’re allowed to keep patients on “observation status,” deliver care and let patients go without ever classing them as inpatients. All of which might be well and good, except that if patients are in a hospital for days, they rack up a big bill — one they’re expected to pay far more of if the visit is billed as outpatient care under Medicare Part B.

Even more delightful for these patients, the fact that they haven’t logged three or more “real” inpatient days means that Medicare won’t pay for follow-up in a skilled nursing facility after discharge. So seniors either do without, or end up having the state pay through Medicaid.

Nice way to look out for patients, guys. Being old and sick and scared isn’t bad enough; now seniors have to wonder if their hospital costs are paid for even with Medicare coverage in place.

With this kind of mumblety-peg becoming fairly common, a consumer group called Center for Medicare Advocacy has filed a lawsuit to call a halt to the fun. The group is asking CMS to simply end observation status as a billable category.

While I sympathize with hospitals to some degree, who are also hoping to dodge scrutiny from the RECs by avoiding inpatient claim reviews, setting up seniors for high costs by playing unfair games is bad for you, the industry and the patient. Cut it out.

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October 17, 2011

Washington Hospitals Sue Over Cruel and Unusual Medicaid ED Visit Limits

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I’ve heard of some draconian budget-cutting measures, but the following, proposed by officials in Washington state, just about takes the cake. Good to see that the state’s hospitals, along with its doctors, are rightfully attempting to slam the door shut onMedicaid planners’ obscene antics.

A new state plan in Washington proposes to limit payment for Medicaid patients’ emergency department visits, on the extremely dubious assumption that such patients can self-diagnose whether they ought to be there in the first place. Not only is this program unlikely to save any real money (unless you count the money saved by not having to care for dead beneficiaries), it assumes that emergency department staffers are adding useless layers of expertise so often that their services should be choked back dramatically. The truth is, there’s boatloads of evidence that the poor aren’t the biggest users of ED services for non-emergent conditions, but I suppose these state penny-pinches wouldn’t be bothered by the facts.

Get this. The state’s Medicaid folks want to cover only three “non-emergency” visits per year — enough of a disincentive to prevent people from going in the first place — but it doesn’t end there. The plan would classify more than  700 diagnoses as “non-emergent,” including (wait for it) chest pain, abdominal pain and breathing problems.  So, I take it that pregnant women, infants, children, the disabled and the mentally ill are supposed to decide with a home thermometer and a bit of prayer whether they’re actually in danger?

According to the folks suing the state, which include the state medical association, hospital association and chapter of the American College of Emergency Physicians, this program not only endangers patients, but also has thrown a cloud of smoke around payment issues. Specifically, the plaintiffs argue that the state is threatening patients that they’ll be billed directly, while EMTALA and state charity care laws prohibit patient billing.

Folks, if I were a hospital executive, I’d be suing to avoid legal and political messes that will arise here, sure. But I’d be sick to my gut about what such rules would mean to real people, too. I truly hope that’s what the suing hospitals have in mind.

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