After initial disagreement, patient advocates and hospitals in Colorado are in favor of a bill that would require hospitals to provide discounts to uninsured patients and to offer more transparency about how those patients can pay their bills.
Senate Bill 134 initially provided strict guidelines for both: for patients whose income was 400 percent of the federal poverty level — about $92,000 for a family of four — hospitals were required to offer care at cost.
In addition, the bill says that every step of the way — from admissions to discharge to billing — patients should receive information about discounts, payments plans and other options.
Both requirements shook the hospitals, but they met with Senate sponsor Irene Aguillar to hammer out a compromise. Both sides came to an agreement, and the result was that the bill has passed both the health and human resources committee and the appropriations committee. It was sent March 2 to the full Senate.
“In its original form, this bill was harmful to rural hospitals, because it forced them into financing they just weren’t capable of doing,” said Nancy Engle, government advocate for Memorial Health System. “At Memorial, we already spend about $70 million a year on uncompensated care, and we just think that 400 percent of the federal poverty level was too much.”
So the bill got watered down — and now only includes financing for 250 percent of the federal poverty level, or about $44,000 for a family of four.
Also, in its original form, the bill said hospitals could only collect 10 percent of a family’s annual income. That was unsustainable, Engle said.
“That would mean that we would be collecting on hospital bills for years,” she said, “depending on what the patient needed. Again, for small hospitals, that would affect their operations.”
So Aguillar removed that requirement. Despite the changes, patient advocates are satisfied with the bill and its progress through the General Assembly.
“We’re pleased with the changes, and with Sen. Aguillar’s ability to bring the stakeholders together for a compromise,” said Christine Murphy, CEO of the Colorado Center on Law and Policy, which supported the bill in its original form. “And we don’t think the changes will affect much — we believe this is the best bill for Colorado’s consumers. The transparency part of it is a very big deal for consumers.”
That’s because hospitals were not providing uninsured patients with a breakdown of the costs or with financial payment plans, she said. In addition, many hospitals were charging 200 or 300 percent more than what insurance companies had negotiated.
“That’s unfair to the uninsured,” she said. “That’s why we’re in favor of the bill. It limits the amount you can charge patients to the lowest negotiated rates that insurance companies pay.”
The bill also requires a certain level of transparency from hospitals about what the patient’s bill might look like, what payment plans are available, and options for discounts.
While none of that is new for Memorial, Engle said the requirement places and additional burden on the hospital.
“We are all in favor of transparency,” she said. “And we know it’s an issue we have to work on. But it’s a process. Pricing and financial information can be complicated. We’re working on getting the information to patients in a more concise way.”
Colorado Springs’ other hospital, Penrose-St. Francis Health Services, is owned by Centura Health, which says it already has a discount plan in place to cover families who make 400 percent of the federal poverty level.
In a statement, the hospital said, “We are committed to providing health care services regardless of age, gender, geographic location, cultural background, physical mobility or ability to pay, and in the fiscal year ending June 30, 2011, provided in excess of $545 million in uncompensated care.”
Both local hospitals were part of a larger lobbying effort from the Colorado Hospital Association, a trade industry group for all of Colorado’s hospitals.
CHA says it adopted a policy in 2007 that encouraged hospitals to have financial aid policies that consider each individual’s ability to contribute to the cost of care.
“Such polices should be clear, understandable and readily available upon request — the latter of which includes conspicuous posting on a hospital’s website and place of entry,” according to CHA.
“Policies should include flexible payments plans, said CHA, and should state if a minimum payment is required and should specify the type and scope of services that qualify for discounts.
However, SB 134 takes away the decision of what to offer, when to offer it and how to provide the information. It requires giving the information to patients on several different occasions during the inpatient treatment, and afterwards, as well.
But some of the requirements, having the information posted on web sites, for instance, haven’t yet happened. Memorial, for instance, doesn’t have financial information posted on its web site — at least, not yet.
“We’re working on getting it there,” Engle said. “For us, however, there isn’t really a one-size-fits-all policy. We try to work with individual patients to make sure they can pay their bills.”
Penrose does have its financial policy on its web site, and says, among other things, that it does not pursue debt collection from unemployed people or people who have demonstrated their inability to pay.
While both sides praise the compromises reached in SB 134, there remains a single problem that hospitals say isn’t addressed in the bill — and probably can’t be changed through legislation.
The ultimate responsibility for payment is still up to the patient, Engle said.
“It’s difficult to work with someone who won’t even call you back, won’t send a letter,” she said. “We have patients who we never hear from again, despite the steps we take to make sure they know about discount plans and payment options. We don’t have a choice but to send bills to collections if we can’t even have a conversation.”