Report: Few tax-exempt hospitals adequately inform needy patients of available financial assistance

(Atlanta, Ga. and Boston, Ma.) Many non-profit hospitals are not doing enough to let needy patients know about whether they qualify for hospital charity care programs and how to apply for assistance, according to a report released today by The Access Project and Community Catalyst in collaboration with Georgia Watch.

The report, Best Kept Secrets, presents the findings of a survey that looked at whether non-profit hospitals are meeting the voluntary guidelines established by the American Hospital Association (AHA) regarding billing and collection practices for uninsured and underinsured patients.

Non-profit hospitals are expected to offer community benefits, including charity care, in exchange for the tax exemptions they receive as charitable institutions. Charity care programs provide free or discounted care to patients who meet hospitals’ financial assistance criteria. The AHA guidelines call on hospitals to have clear, written policies to help patients determine if they qualify for charity care and to make these policies available to patients and the public.

According to the report, while most hospitals mentioned the existence of charity care programs on either their websites or over the telephone, only about a quarter provided information regarding eligibility for charity care.  Fewer than half provided a charity care application form. A small percentage provided information on their websites that listed the discounts available to people at different income levels.

“This report illustrates that voluntary guidelines are ineffective,” said The Access Project director Mark Rukavina. “Given the state of our economy and the insecurity Americans feel regarding health care costs, hospital charity care is and will continue to be an important part of our health care safety net. Both federal and state governments must ensure that hospitals receiving tax breaks are also fulfilling their charitable obligations.”

Georgia Watch will soon release a separate report detailing notification of the availability of financial assistance at metropolitan Atlanta hospitals through its own Hospital Accountability Project. Through this endeavor, Georgia Watch examined the challenges low-income, uninsured and underinsured patients face in the metropolitan Atlanta area by surveying consumers, analyzing the financial aid policies at area hospitals and evaluating current public policies that requite hospitals to give free or low-cost care. The organization also sent representatives to 34 hospitals within the metropolitan Atlanta area to see if signage was posted in the appropriate area.

“Unfortunately, Best Kept Secrets report findings mirror those of our own, and most hospitals did not have adequate signage advertising financial assistance or even an available written policy,” said Georgia Watch Hospital Accountability Project Manager Holly Lang. “We’re disappointed that so many of our local hospitals do not provide information on financial assistance that is so crucial to uninsured and underinsured consumers.”

According to Georgia Watch’s upcoming report, Of the hospitals examined, only about one-quarter had clear signage placed at some part of the hospital advertising the availability of free or reduced-cost care. About one-half of all hospitals studied did provide some information about financial assistance on their Web site, though often this information was difficult to locate and often only included a number to call for more information.

“Many consumers, especially those who are low-income and either do not have a computer or are not web savvy, simply will not see that information,” Lang said. “It’s critical that hospitals let patients know at the hospital that assistance exists.”

Provisions in the recently-passed national health care reform law (the Patient Protection and Affordable Care Act) impose new requirements on tax-exempt hospitals. Under the law, hospitals must establish written financial assistance policies that clearly specify eligibility criteria and widely publicize these policies. They are also prohibited from taking extraordinary collection actions before making a reasonable effort to determine if patients qualify for financial assistance. These provisions represent the most significant revisions to the community benefit standards for hospitals receiving federal tax exemptions since 1969, following passage of the laws that established the Medicare and Medicaid programs.

“These findings are disappointing given that hospital billing and collection issues have been closely scrutinized over the last decade by Congress and many state governments,” said Jessica Curtis, director of the Hospital Accountability Project at Community Catalyst. “It will be important for the federal government to develop regulations establishing very clear standards for tax-exempt hospitals and monitor hospital behavior for compliance.”

The report is based on a survey of a representative sample of non-profit hospitals nationally that was conducted by The Access Project in the summer of 2009. The random sample of 99 non-profit hospitals in the current survey was selected from the 2009 AHA handbook of hospitals. The research assessed whether hospitals were complying with the AHA billing and collection guidelines by searching hospital websites for information and by calling hospitals to inquire about the availability of charity care and the criteria for eligibility.

About Georgia Watch
Founded in 2002, Georgia Watch is a nonprofit, nonpartisan 501-(c)(3) watchdog group focusing on consumer education and research in the areas of health care, insurance, identity theft, consumer energy issues and personal finance.

About The Access Project
The Access Project is a research and advocacy organization that has worked to improve health and health care access since 1998. Its mission is to strengthen community action, promote social change, and improve health, especially for those most vulnerable. Visit The Access Project’s Web site for more information.

About Community Catalyst
Community Catalyst is a national non-profit advocacy organization dedicated to quality affordable health care for all.  Since 1997, Community Catalyst has been working to build the consumer and community leadership required to transform the American health system.  With the belief that this transformation will happen when consumers are fully engaged and have an organized voice, Community Catalyst works in partnership with national, state and local consumer organizations, policymakers, and foundations, providing leadership and support to change the health care system so it serves everyone – especially vulnerable members of society.  For more information, visit