Two important pieces of news on the health access and transparency front arrived in time for the holidays:
- Modern Healthcare’s analysis of non-profit hospital tax reports shows, for the first time ever , what hospitals spend nationally on charity care, and
- The IRS held firm on requiring non-profit hospitals to report how they’re complying with ACA requirements on charity care (financial assistance), billing and debt collection for tax year 2011.
Those numbers—in the aggregate, at least—aren’t pretty. But they’re not the whole story, either. Yes, it’s true that hospitals can choose to spend their community benefit dollars in ways other than charity care, and that those dollars can be well-spent (see Following the Leaders: How Some Hospitals Use Community Benefit Programs to Address Health Equity). But with charity care numbers this low, and unemployment and uninsured rates so high, we have to wonder: are hospitals running their community benefit programs in a way that sidesteps the need for financial assistance in their communities?
Holly Lang, an advocate in Georgia, put the Modern Healthcare findings into context in a “Marketplace” segment on American Public Media, saying that in an experiment she did with 34 hospitals in Georgia last summer, only two provided information about charity care (also called financial assistance) for uninsured patients. Clearly, there is room for improvement in the ways hospitals communicate with patients who need financial help. And we think improvement is on the horizon.
Last week, the IRS announced that, come Tax Year 2011, non-profit hospitals will have to report how they’re complying with new ACA requirements that deal with how hospitals run key parts of their community benefit programs, not just how much they spend. For example, non-profit hospitals will have to report on the contents of their financial assistance policies, including the steps they take to publicize them to the community—just the kind of information Lang found to be in short supply in Georgia last year.
This is an important step. Additional reporting will provide the data necessary for communities to assess their hospitals’ contributions to the community in a broader context than the charity care figures provided on 2009 documents, by including details about the financial assistance policy eligibility criteria, dissemination of the policy, and billing and collections practices. The data will also be crucial to inform further public policymaking.
Will everyone be pleased with these changes? Probably not. The IRS issued a 2010 Schedule H that reflected the requirements of the ACA. But, after pressure from the American Hospital Association and others, the IRS decided to make the reporting optional for 2010. (See our previous blog, Two Steps Forward, One Step Back on Hospital Transparency.)
But we’re glad the IRS has beefed up reporting. We need information about hospital spending and the particulars of key community benefit programs to understand how hospitals meet community needs, and where there’s room for improvement. At the end of the day, we believe transparency and sunshine will drive real change. So the next time Lang has an uninsured patient who needs hospital care in Georgia, we hope more than two provide life-saving information about charity care. Now let’s schedule that follow-up appointment…
— Anna Dunbar-Hester, Policy Analyst