The Value of Residency Requirements in Hospital Financial Assistance Policies as WA Hospitals Sue State Over New Charity Care Law Interpretation
Having written and supported hundreds of hospitals’ Financial Assistance Policies across the country with the mission of making financial assistance easy to access and navigate for the patients who need it – we at Breez would like to make known the value of residency requirements and reasonable service exclusions in these policies.??
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[From Becker’s Hospital Review ] The Washington Hospital Association filed a lawsuit Oct. 16 against the state over the state's health department's change in interpretation of a long-standing charity care law. According to the lawsuit, hospitals statewide are required to provide charity care for any service to any patient seeking it regardless of their ability to pay or an indigent person's residency.?
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Breez Health agrees with the Washington Hospital Association's stance that the state's revised interpretation of the long-standing charity care law goes too far.?
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Here's why:?
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1. The Power of "Community"?
"Community" is more than just a word—it embodies a deep-rooted commitment to nurturing and caring for the individuals within a defined geographical boundary. Many Washington hospitals, as cornerstones of their communities, consistently offer financial assistance to ensure that every community member, regardless of their financial circumstance, receives the care they need at an affordable cost. Financial assistance programs play a critical role in defining "Community Benefit," which hospitals report annually to the IRS. The tax advantages hospitals receive due to their nonprofit status are inherently tied to the contributions given to their local communities. So, the “Community Benefit” should predominantly be felt by those same communities.?
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Nonprofit hospitals have consistently provided financial assistance for urgent and emergency care needs, even if the patient doesn't reside in the state. However, the recent reinterpretation of the charity care law mandates that Washington hospitals offer financial assistance for any service type and to patients regardless of their residency. This not only broadens the scope of the "Community Benefit" system beyond its original intent but also exposes Washington hospitals to potential abuse or medical tourism. The essence of “community” was always about prioritizing and catering to the needs of Washingtonians. The aim was not to stretch resources thin by extending aid, for any service type, beyond state lines. Each nonprofit hospital in the U.S. should be responsible for caring for those who reside in their own communities.?
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2. Clear Eligibility Criteria is Crucial: Laws and policies should come with clear, fair and implementable criteria. It's necessary to strike a balance between aiding those in need and safeguarding hospitals from undue financial burden. While hospital financial assistance should continue to be readily available for urgent and emergency care, regardless of where a patient lives, there are some services that should not be covered under the charity care law. Any services that are not medically necessary, such as cosmetic procedures or fertility treatments, should not be required to be subject to financial assistance discounts.?
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3. The Threat to Hospital Sustainability: Requiring hospitals to provide free or low-cost care universally — to non-residents — may put an unbearable strain on Washington's hospitals. Such a mandate potentially exposes hospitals to an influx of patients from all states, seeking both common and highly specialized treatments. This not only poses a financial risk but also a significant operational challenge.?
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4. The Implications for Washingtonians: A potential upsurge in outside patients seeking free or discounted care could hamper the quality and accessibility of medical services for Washington residents. Moreover, the additional cost burden might trickle down to the very community the hospitals are intended to serve, raising healthcare costs and limiting accessibility of services for Washingtonians.?
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While the intent to expand the umbrella of hospital financial assistance is noble, the approach needs to be accompanied by a thoughtful strategy to ensure the sustainability of hospitals and the well-being of the local community. Many hospitals across country are proactively investing strategic resources to improve the efficiency and effectiveness of their financial assistance programs – easing the burden of medical debt in their communities. But many have yet to take the critical steps of establishing a streamlined, patient friendly financial assistance program. In doing so, residents across the country could easily access affordable care without feeling the need to seek assistance beyond their home state. The proposed expansion of the charity care law in Washington seems to have deviated from its original intent of addressing "cost" and "access" specifically for the people of Washington. After over 30 years of consistent interpretation, this sudden shift should be reconsidered.?
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Our plea aligns with that of the Washington State Hospital Association: to take a step back, reconsider the implications, and collaboratively find a sustainable solution that upholds the true spirit of the charity care law.?
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Editor’s Note: Breez Health is a healthcare financial assistance (FA) service and technology provider focused on reducing medical debt and connecting more eligible patients to charity care. By streamlining the financial assistance eligibility and application processes, and making FAPs seamless for providers and patients alike, we're ensuring everyone has access to affordable healthcare.?
General Counsel at Dollar For
1 年Much of this is objectively false. Neither the DOH notice nor the WSHA lawsuit claim that hospitals must give charity care "for any service to any patient." The exact language of the interpretive statement is that charity care determinations “shall not be based, in whole or in part, on an indigent person’s residency.” This means hospitals may not consider residency as an eligibility factor, but it does not affect the other factors that they can legally consider such as income, assets, etc. Also, the interpretive statement specifically cites the legislature’s definition of charity which is: “Charity care means medically necessary hospital health care rendered to indigent persons when third-party coverage, if any, has been exhausted, to the extent that the persons are unable to pay for the care or to pay deductibles or coinsurance amounts required by a third-party payor, as determined by the department.” (Emphasis added). Clearly this, like all other Washington charity care factors, only applies to medically necessary care.
General Counsel at Dollar For
1 年The post also says: A potential upsurge in outside patients seeking free or discounted care could hamper the quality and accessibility of medical services for Washington residents. Not only is there no evidence to support this, all evidence available strongly suggests this will not happen.? As the DOH interpretive statement says, this only affects a small number of hospital policies with residency restrictions in their charity care policies. Therefore, most Washington hospitals do not, and have not, had residency restrictions. These hospitals have not been flooded with poor non-resident patients.
General Counsel at Dollar For
1 年What this interpretive statement does say and do is align the administrative regulations with the clear letter of the law. As stated above, the statutory definition of “charity care” includes medically necessary hospital care rendered to “indigent persons. ”The statutory definition of “indigent persons” “are those patients or their guarantors who qualify for charity care pursuant to RCW 70.170.060(5) based on the federal poverty level, adjusted for family size, and who have exhausted any third-party coverage.” RCW 70.060(5) requires that the hospital grant charity care to “all patients and their guarantors whose income” falls within set ranges. Personally, I don’t read “all patients” to mean “all patients who live where the hospital wants them to.”
General Counsel at Dollar For
1 年There is enough misinformation in healthcare policy right now…let’s not add to the pile.
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1 年Do hope to see reconsideration and a more sustainable solution