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New York Hospitals Try the Kinder, Gentler Approach

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Hospitals that have routinely charged their highest rates to uninsured patients and aggressively pursued those who are unable to pay are adopting gentler billing and collection practices, according to New York's largest hospital trade group.

The new policy responds to a longstanding complaint that hospitals have overcharged their uninsured patients and failed to tell them about their charity care policies, thereby burdening people with big hospital bills for years.

Under guidelines that the Healthcare Association of New York State (HANYS) quietly issued a few weeks ago, the state's 230 not-for-profit hospitals will begin publicizing their charity care programs, posting signs and including notices in bills to encourage patients who can't pay to ask for help.

They also committed to bringing hospital rates for the uninsured in line with what others pay. Traditionally, HMOs and government programs such as Medicaid negotiate much lower rates, leaving the uninsured as the only patients paying the higher charges. Critics say the hospitals charge these higher rates to make up for the discounts given to government programs and HMOs.

Local advocates also applauded HANYS' new rules. ``It's good the hospitals have realized there's a problem and that they need to take measures to do something about it,'' said Richard Kirsch, executive director of the Albany-based Citizen Action of New York.

However, those advocates also said the new policy guidelines are vague and voluntary, with no way to police hospitals that sidestep the rules. They also question how much charity care hospitals actually offer.

HANYS established the guidelines after news stories highlighted embarrassing cases in which hospitals had tried to collect on the inflated debts of uninsured patients for years, driving many into bankruptcy and even foreclosure.

When HANYS hospital CEOs first met a few months ago to discuss their charity policies, most thought they were already doing a good job.

But they soon discovered they weren't. ``When the CEOs went back to their hospitals and saw what was really happening, they said there was room for improvement,'' said HANYS spokeswoman Monica Mahaffey.

The new guidelines will cover a particular group of people - those who earn too much to qualify for Medicaid, but don't have good health insurance of their own.

New York's most generous government insurance program is Family

Health Plus, for individuals who earn less than one-and-a-half times the federal poverty level, or $28,275 for a family of four.

HANYS proposes offering discounted or free care to patients whose family income is up to twice the federal poverty level income, or $36,800 for a family of four.

``The guidelines are very consistent with the policy we've been using,'' said Jim Gavin, chief financial officer for Saratoga Hospital.

The charity care program at St. Peter's Hospital in Albany, Mercy

Healthcare Benefits, has won accolades from groups like Citizen Action because it's widely publicized and clear about whom it will cover. St. Peter's discounts bills from 40 percent to 100 percent on a sliding scale for uninsured patients in Albany and Rensselaer counties who earn up to twice the federal poverty level income.

But even St. Peter's says it will take some work to meet the new guidelines. ``One of the things that's on my list for this year is better education for our staff,'' said Sister Gail Waring, the hospital's vice president for mission services.

Other local hospitals also say they're doing many of the things that

HANYS is recommending. Albany Medical Center Hospital has financial counselors in its emergency rooms, to see if patients without insurance might qualify for a public program like Family Health Plus or Medicaid, the government insurance program for the poor.

While hospitals say they can improve their charity care, they also resent the accusation that they've been overcharging the poor to make up for shortfalls. There's a lot of care we offer we never get compensated for,'' said Albany Med spokesman Greg McGarry.That sometimes gets lost.''

According to HANYS, member hospitals lost $1.8 billion in 2002 on care for the uninsured.

Advocates question those figures, saying hospitals are including costs that have little to do with charity care.

That number is swelled by disputes between insurers and hospitals, said Elisabeth Benjamin, an attorney in the Health Law Unit of New York

City-based Legal Aid.

If an HMO will only pay three days of hospitalization for a procedure, and the patient stays four days, the hospital might choose to write off that extra day, regardless of patient's income level.

``I don't think a normal person would count that as charity care,'' said Benjamin.


(The Albany Times Union web site is at )

c.2004 Albany Times Union

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