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Study: Hospitals adopting new guidelines for billing uninsured patients

Patient Financial Services Weekly Advisor, October 21, 2005

Hospitals are slowly changing the way they bill and collect for low-income, uninsured patients in response to lawsuits and negative publicity, according to a recent study conducted by the Center for Studying Health System Change (HSC).

The lawsuits named hospitals in more than 50 health systems as defendants in class-action suits, alleging that not-for-profit hospitals charged uninsured patients full billed charges for care. Meanwhile other payers, such as Medicare and Medicaid, receive large discounts from billed charges.

The courts dismissed most of the lawsuits without merit, but the possibility of state court action remains. Considering the bad press hospitals are receiving, hospital associations are encouraging them to create formal policies for billing uninsured patients, according to the study.

"Many uninsured patients are poor and unable to afford care, while others may have the resources to pay for their care, leaving hospitals the task of determining who is financially needy," says Paul B. Ginsburg, Ph.D., president of HSC. "What we have found is that hospitals generally have adopted guidelines to help make those calls in a more organized and structured way."

Many of the hospitals participating in the study reported that expenses previously classified as bad debt had been shifted to charity care write-offs, resulting in little impact on hospital finances.

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