New rules proposed by the R.I. Department of Health this month would require not just hospitals and nursing homes, but a variety of free-standing health care facilities, to provide charity care to low-income patients, equivalent to at least 1 percent of net patient revenue.
Hospitals and nursing homes have long been required to provide charity care, though even updated regulations effective April 1 do not set a specific minimum.
In addition, the state Health Services Council has required individual urgent-care, surgical and other facilities, as part of their licensure or as a condition for approval of upgrades or new services, to provide some charity care. Most, however, face no such requirement.
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The goal of the proposed new regulations, said Ana Novais, associate director of health and head of the Division of Community Health and Equity, is to provide “consistency across the board, and in a sense, fairness and equity across the board.”
The new rules are strictly in draft form at this point, and officials are actively soliciting comments from health care providers and from the community. In addition, they have scheduled an informal meeting to review the rules March 22.
“This is going to be a long process, I’m expecting,” Novais said. The draft rules “will allow us to start a conversation with these facilities.”
Charity care is a touchy subject no matter whom you ask. Few would disagree with the basic principle – that poverty shouldn’t keep a person from getting needed care, especially in a life-or-death situation. But charity care costs money, and hospitals say that given their strained finances, they can’t carry the full burden of treating those who can’t pay.
Then there’s the question of how much charity care Rhode Islanders need – providers in the suburbs or in wealthy neighborhoods might not encounter a lot of truly poor patients, while those in the urban cores get them by the thousands.
And while a tough economy might bring a surge of unemployed and uninsured people into health care facilities, in good years the numbers might decline again.
The old hospital charity-care rules, which required hospitals to maintain or increase the percentage of free care they provided from year to year, were controversial precisely because of those factors.
Hospitals pressed the state to adopt income-based guidelines instead, which would ensure patients got the care they needed without imposing arbitrary targets.
The new hospital rules that go into effect April 1, which were approved after extensive discussions with the institutions, follow that model.
Uninsured Rhode Island residents with incomes up to 200 percent of the federal poverty line ($34,340 for a family of three in 2007) get completely free care, provided they pass an asset test. In addition, hospitals must set up a sliding-fee scale for patients with incomes between 200 and 300 percent of the poverty line, and for those with assets of more than $12,000 for a family.
The hospital rules require that each facility post signs explaining that free or discounted care is available to eligible patients, and that they include a similar notice on each patient’s bill. At the end of the year, hospitals must report to the state how many charity-care applications they received, how many they approved or denied, and the value, broken down by patient income, race and primary language spoken.
Edward J. Quinlan, president of the Hospital Association of Rhode Island, said that before the new rules were agreed upon, some hospitals had much lower thresholds for free care, between 125 and 175 percent of the poverty line, but all agreed to the new 200-percent standard.
“I think it was a strong statement from the hospitals that we recognize that people will, from time to time, find themselves without health insurance and in need of services, and they will be treated respectfully,” Quinlan said.
Jane Bruno, spokeswoman for Lifespan, said the health system had worked with state officials and others for two years to develop “meaningful charity care regulations that help meet the needs of the community,” and it supports the new standards.
The Lifespan hospitals actually go further, Bruno said, and provide discounted rates for patients up to 400 percent of the poverty line.
Marc Proto, director of revenue cycle at Landmark Medical Center, offered a similar assessment, saying that hospital also “goes above and beyond these regulations.”
“We have such a high indigent population in the Northern Rhode Island area that, with rising health care costs and hospital charges, we don’t feel that the entire burden should be put on the back of self-pays,” Proto said, referring to uninsured patients.
Landmark refuses to charge any patient more than insurers would pay for the same services, Proto said, and it tries to be lenient with income documentation requirements, so a person who doesn’t have a W-2 form, for example, can just submit a pay stub.
But while the new hospital rules have been embraced widely, the broader charity-care rules being proposed now – which combine the income-level mandate with the 1-percent minimum – are expected to be far more controversial.
Quinlan said he’s happy to see a wider range of health care facilities being asked to provide charity care. “I think that’s appropriate; it’s overdue,” he said.
“It’s our belief that the health care delivery system in Rhode Island is at a critical point in terms of how it helps meet broader societal needs of the uninsured,” he added, “and that’s a responsibility that should be shared by providers in addition to hospitals.”
But the 1-percent minimum “is an issue that we need to further analyze,” Quinlan said, because it may not be feasible for all hospitals, even though collectively they provide millions of dollars’ worth of free care each year.
Novais, the associate state health director, said some hospitals already exceed the target and provide as much as 2.2 percent of care for free, though others are at 0.6 and 0.7 percent. Still, she said, a 1-percent target “is not something that they would not be able to achieve.”
And the rules do provide an alternative: Facilities may pay 1 percent of their net patient revenue in cash to a nonprofit school-based health center or community health center, or make a payment to bridge the gap between the free care they’ve provided and the state target.
Still, it’s a substantial requirement, especially for facilities that have never had to provide free care at all. Few people had read the proposal as of last week, and many hadn’t even heard about it yet, so several facilities did not respond to a request for comments.
Beverly Gobin, a registered nurse and director of operations at Atmed Treatment Center, in Johnston, hadn’t read the proposal as of Wednesday, but she disapproved of the general concept. Hospitals can get federal funds to offset the cost of charity care, she noted; urgent-care centers can’t.
“Let me put it this way: If someone comes to my emergency room … and they’re bleeding or they’re having a heart attack, I don’t even ask what kind of coverage they have – I’m going to treat them,” she said. “We’ll go after them afterward, but we’ll treat them first.”
If the federal government wants to provide aid to urgent-care facilities to treat all comers in general, Gobin said, “we’ll be happy to do so.” But otherwise, she said, officials should be mindful of the fact that facilities such as Atmed don’t have the financial resources that hospitals have.
“Blue Cross reimburses them for a facility fee; we don’t get a facility fee,” she said. “We’re only reimbursed for our visits, [while] they’re pretty highly profitable, and they’ve got the federal government to back them, too.”
The proposed charity care rules can be downloaded at www.health.ri.gov/ hsr/regulations.
