Tip: Managing uncompensated care

Hospitals have traditionally structured their charity programs to the Federal Poverty Guidelines (FPG), which the government updates annually. However, in the past few years, there has been a trend to expand the charity eligibility to greater percentages of the FPG.

Uncompensated care as a percentage of expenditures has remained relatively constant, ranging from a high of 5.8% in 2000 to a low of 5.1% in 2002.

At the same time, the amount of uncompensated care provided has increased from a low of $21.5 billion dollars in 2001 to $24.9 billion dollars in 2003.

On an adjusted patient day basis, the cost to healthcare providers has followed a similar pattern, ranging from a low of $69.51 per adjusted patient day in 2001 to $78.75 per adjusted patient day in 2003.

With hospital operating margins in 2003-2004 ranging from -1.84% to 4.1%, the incorporation of contemporary uncompensated care processing is an important aspect of healthcare financial management.

This tip is excerpted from Charity Care: Tools to Manage the Uninsured Population by Sandra J. Wolfskill, FHFMA. Copyright 2005 by HCPro, Inc. For more information, click here.