May 7, 2012

State's hospitals double free care over five years

The economy is the primary cause of a trend that stresses hospital finances. But even with the jump, some say nonprofits don't do enough.

By Jessica Hall
Staff Writer

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Since nonprofit hospitals are exempt from state, local and federal taxes, some health care advocates argue that the institutions should be more liberal with their free care policies.

"There are concerns that hospitals have not provided as much community benefit as they get through their tax-exempt status," said Alwyn Cassil, director of public affairs for the Center for Studying Health System Change in Washington. "A lot of it comes down to hospital missions and boards of trustees, who are members of the community, who are guiding the hospitals and meeting or not meeting community needs."


While there is no direct link between tax exemptions and charity care, some advocates use taxes as the benchmark for what the hospitals save and what they could be shifting toward free care. Twelve of Maine's hospitals received more than twice as much money in local property tax breaks -- $116.8 million -- than all of the state hospitals combined gave in charity care in 2005 ($60.6 million), according to Consumers for Affordable Health Care. That was the most recent year for which data was available.

The Patient Protection and Affordable Care Act requires hospitals to assess community health care needs and inform patients of their charity care policies. The fact that a needs assessment was mandated "reflects concerns on the part of policymakers that hospitals have not embraced this charity care requirement as closely as they should," Cassil said.

Each hospital has responded differently to the surge in demand for free care.

For example, Mid Coast Hospital in Brunswick, which has seen an 80 percent increase in free care over the past five years, has opened a clinic to connect patients with MaineCare, the state's Medicaid program, which receives about two-thirds of its funding from the federal government. The clinic helps link patients to subsidized or free care and keeps them from using the costly emergency room as their main source of medical care.

Meanwhile, Southern Maine Medical has bought PrimeCare Physicians, which put primary care and specialists under the umbrella of its nonprofit hospital. That means those doctors' services can be provided for free to poor patients. Southern Maine also has an employee who meets with patients to see if they qualify for federal aide, free care or insurance programs.


One 55-year-old Falmouth woman said she has been receiving free care for 30 years at the Adult Internal Medicine Clinic at Maine Medical Center. The woman, who legally changed her name to just "Terry," said the clinic has improved its care and customer service over the years that she has been a patient.

"It's much, much easier now. I used to feel like the scum of the earth. Now they make you feel good. The demeanor has changed. The world has changed. People are realizing that there's people who need care and that doesn't make them bad," said Terry, who teaches violin.

Terry has gone through costly procedures, such as childbirth and hip replacement, with only a $10 co-pay.

There's no minimum national requirement for the amount of free care that hospitals offer. The American Hospital Association said hospitals provide $39.3 billion in uncompensated care -- but that includes both free care and bad debts, or bills that patients don't pay. The association said the total of uncompensated care as a percentage of expenses was 5.8 percent.

In the past, Washington lawmakers have discussed setting national rules that nonprofit hospitals must provide charity care equal to 5 percent of their revenues. States such as Texas and Pennsylvania already require just that, in order for hospitals to keep their nonprofit tax breaks. Illinois also is considering such requirements, Gale said.

But having a minimum requirement may not be the answer, health care advocates said.

"One caution to having a federal requirement is that it could become a ceiling for what hospitals provide, not a minimum. The needs in each community are different, so a standard requirement may not work," said Jessica Curtis, hospital accountability project director for Community Catalyst in Boston, a national advocacy group.

Many patients don't even know they qualify for free care or don't know the hoops to jump through to get it.

A 2009 survey of 99 hospitals nationwide by Community Catalyst and The Access Project, another Boston-based health advocacy group, found that 85 percent of hospitals mentioned charity care to patients. But compliance dropped off to fewer than half when it came to providing applications for financial help, and only one-quarter provided eligibility requirements on their websites.

"Not-for-profits get pretty significant tax write-offs for providing free care, and still, it's not uncommon for us to hear about hospitals not posting policies, aggressive collection tactics or inconsistent policy implementation," Curtis said.

Staff Writer Jessica Hall can be contacted at 791-6316 or at:


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