Consumer Groups Welcome AHA’s Effort, Offer Specific Areas For Improvement

Boston, MA, May 2, 2006. Consumer advocates today are finding good and bad news in the American Hospital Association plan to aid the nation’s under- and uninsured.  Boston-based Community Catalyst called AHA’s decision to specify financial eligibility criteria for hospital free care under their new plan for hospital pricing “encouraging”.  However, the group added that the plan still leaves many patients unable to afford adequate insurance coverage and vulnerable to damaging medical debt. Community Catalyst also fears the plan will discourage people from seeking necessary medical care.   

Since 1999, Community Catalyst has been working with state and local consumer health advocates across the country who are concerned about access to hospital care for people with little or no insurance.  Through this work, the organization has learned first hand about the inadequacies of many hospital financial assistance policies. It also has identified policies that provide meaningful financial assistance to vulnerable individuals in ways that preserve their dignity. 

 “The principles we developed as a standard for any hospital financial assistance policy reflect our extensive experience with community groups, and they are the measure we used to assess the AHA plan,” said Susan Sherry of Community Catalyst. 

To establish a meaningful floor of protection, the AHA plan must address several critical issues: 

  • Full financial assistance should be available to individuals and families with incomes at or below 200% of the Federal Poverty Level – a standard that has been adopted in a number of places.
  • Financial assistance should also be routinely available to individuals and families with incomes up to 400% FPL, and it should be available at higher income levels if medical bills will pose a significant financial hardship for an individual or family.
  • Rather than arguing about what the appropriate “charge” basis is for a hospital bill, liability should be based on a percentage of family income, e.g. an eligible family is not liable for any hospital expenses that exceed 10% of taxable income.
  • Financial assistance should be available to both the uninsured and the underinsured. Current marketplace activity that shifts insurance costs to employees and promotes so-called ‘consumer-driven health plans’ that have high out-of-pocket costs leave many low- and moderate-income families vulnerable.
  • Financial assistance policies should apply to all medically necessary care. The AHA guidelines allow hospitals to adopt policies that limit financial assistance to the provision of  emergency care.
  • Standards for notification of the availability of financial assistance must require publicizing hospital policies both inside the institution and to the broader community.
  • Payment plans must be reasonable in light of other family financial obligations, and any interest should be minimal. Moreover, hospitals should not encourage low- and moderate-income patients to use credit cards to pay their bills.
  • Where individuals and families are eligible for financial assistance, certain collection activities including foreclosure or forced sale of a primary residence should be prohibited, and there should be stringent limitations on others such as garnishing wages.  

The newly enacted New York law that requires hospital financial assistance policies to meet certain standards as a condition of hospital payments from the state’s uncompensated care pool is an example of a policy that does a much better job of balancing hospital interests with consumer needs,” said Sherry. “Other good examples are the long-standing Massachusetts public policies, and the collaborative agreements reached by members of the Oregon Association of Hospitals and Health Systems.”

Finally, the AHA’s call for immunity from class action lawsuits if a hospital has a policy that conforms to the AHA’s guidelines is misplaced. “Time and again, we came across situations where hospitals had terrific policies on paper, but they were not being implemented,” said Betsy Stoll from Community Catalyst. “The real test is whether people can actually get financial assistance,” said Stoll. “If they can, then the hospital should have nothing to worry about.”


Community Catalyst is a national advocacy organization that builds consumer and community participation in the shaping of our health system to ensure quality, affordable health care for all. Since 1999 Community Catalyst has worked with local health advocates across the country who are pressing hospitals to adopt community responsive charity care policies. For more information on hospital free care, including Community Catalyst’s Patient Financial Assistance Principles, its model Patient Financial Assistance Act, and its comprehensive report on hospital free care, Not There When You Need It: The Search for Free Hospital Care, visit: