New York Hospitals' Charity Care Isn’t So Charitable

New York State’s Indigent Care Pool (ICP) exists to offset the cost of uncompensated care for uninsured and underinsured patients. Annually, nearly $1.2 billion in Medicaid funds are allocated to 201 hospitals statewide to compensate hospitals for the cost of providing care to people that cannot or will not pay their medical bills. In 2007, the state enacted the Hospital Financial Assistance Law (HFAL) to respond to concerns that hospitals were not properly notifying patients of financial assistance and lacked transparency and accountability for how they using public funds. However, a report issued this month by the Community Service Society found that an overwhelming majority of New York hospitals violate the HFAL and continue to impose barriers to financial assistance.

Bronx Health REACH is a longstanding advocate of providing equitable access to care for uninsured and underinsured patients. Part of this effort involves providing clear financial assistance policies to patients through the hospital’s website and the physician referral line. In 2011, New York State Senator Gustavo Rivera and Assemblyman Nelson Castro introduced legislation that would require patients receive information about financial assistance in these ways, as well as prohibit hospitals from steering patients into different care settings. (To read more about this legislation and segregated care, click here.) The passage of this legislation would be a step forward in ensuring that uninsured and underinsured patients receive the financial aid that they need. However, an overarching concern is that the largest amounts of money are going to the hospitals that provide the least amount of care to needy populations, while the safety net institutions shoulder an increased burden with severely limited funds.

The Community Service Society analyzed state department of health data for all New York hospitals and found that the hospitals that approved the largest amount of financial aid applications generally received a smaller amount of funding. For example, Jacobi Medical Center, a public hospital in the Bronx that treats a large proportion of uninsured patients, received $167 in 2010 for each of the 52,702 financial aid applications it approved in 2008. In comparison, Lenox Hill Hospital, a private hospital on the Upper East Side of Manhattan, approved only 130 applications that year and received $84,469 per application. In this current system, the Indigent Care Pool does not reward safety net institutions, which provide significant financial assistance to needy New Yorkers, as they generally receive a lower amount of funding. The report concludes that the extreme variability in the amount of funding received shows that there is a serious need for change in state policy, as well as increased regulation of how these payments are distributed.

The CSS report contains no end of statistics that detail the non-compliance of New York hospitals under HFAL, as well as the inequitable distribution of resources to safety net hospitals. While these reports are critical in order to shed a light on these practices, they should also be a call to action for communities, organizations, and health care advocates. Enormous amounts of money have been paid to treat indigent patients, yet it’s not reaching the people that need it most. (The New York Times wrote an article on this issue and outlined some patient stories, which you can read here.) Without pressure from the communities that these funds are meant to assist, the hospitals may continue to reap the benefits of state funding without providing the assistance it promises. The $1.2 billion per year needs to go to the people that need it most.