Hospitals in South Carolina and across the nation will have to become more compassionate in their treatment of the poor.
That's essentially what the government said when it sent out word this week that federal law does not prevent hospitals from providing the same discounts to uninsured patients that insurance companies and government programs enjoy.
Hospitals in general have long contended that federal rules prevented them from giving such discounts to the uninsured and encouraged them to be aggressive in their collection practices.
In a letter to American Hospital Association President Richard Davidson, Health and Human Services Secretary Tommy Thompson said that view is "not correct, and does not accurately reflect my policy."
Thompson cited the government's payment to hospitals of $22 billion each year to reimburse them for indigent care. "I strongly encourage you to work with AHA member hospitals to take action to assist the uninsured and underinsured," Thompson wrote.
"I'm glad the federal government straightened them (the hospitals) out," said Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center in Columbia, an advocate for the poor. "We're taking a step in the right direction. The uninsured need to have access to affordable health care."
Ken Shull, president of the South Carolina Hospital Association, agreed, yet he believes the government needs to do more to clarify its position before more hospitals will start offering discounts to the uninsured.
Still, he expects that to happen soon. "We're talking 2004," he said.
Hospitals' billing practices have come under intense scrutiny in the past year, as stories of their aggressive collection tactics have spread and the number of people without health coverage has grown.
More than 15 percent of the nation's population is uninsured, and this week a state Department of Insurance report found that more than 19 percent of South Carolinians are uninsured at some point during the year.
Hospitals are required to set a price for their procedures. But Medicare and Medicaid reimburse them at lower levels and private insurance companies negotiate their own discounts.
That leaves only the uninsured to pay the full bill. Last fall, The Post and Courier detailed the story of Honre Deveaux, an uninsured Ladson man who was hit with a $51,000 bill for treatment of a heart attack at an area hospital. His bills forced him to file for bankruptcy.
In a letter written in December to Thompson, the AHA's Davidson said that "federal Medicare regulations as written today contain a string of barriers that discourage hospitals from reducing charges or forgiving debt for these patients without running afoul of the law."
But in its opinion, the Office of the Inspector General said federal rules don't prevent hospitals from helping the uninsured.
Hospitals generally reacted with relief, saying that the opinion clarifies uncertainty about the federal rules. "This is actually good news, as far as I'm concerned," said Diane Story, an official at Roper St. Francis Healthcare. "It clarifies a lot of things."
Story believes it'll make life easier for her company, which runs Roper and Bon Secours St. Francis hospitals.
Currently, she said, the nonprofit hospital negotiates discounts on a case-by-case basis, based on a person's ability to pay and the size of the bill. She said the company did not establish a blanket policy for the uninsured because it was concerned about the federal rules.
Story said the hospital will look at the opinion to see whether it could implement a policy giving set discounts to the uninsured.
The Medical University of South Carolina has long given discounts to indigent uninsured patients in households making less than 200 percent of the federal poverty level, or $18,620 a year for a family of four.
Lisa Montgomery, chief financial officer for the university's Hospital Authority, said the hospital has also given uninsured patients above that income level discounts as low as the average amount managed-care companies pay.
Officials at Trident Health System in North Charleston were unavailable for comment. But HCA, the company's Nashville-based parent and the largest for-profit hospital company in the country, recently put in place a discount program for its poorest patients.
The issue has focused intense attention on the nation's No. 2 for-profit hospital chain, Tenet Healthcare, owner of East Cooper Regional Medical Center.
Last summer, a U.S. House committee investigating hospital billing practices reported that the California-based for-profit attributed 35 percent of its profit to the uninsured.
The company proposed a discount plan last year. That plan is now awaiting federal approval, and Andrea Wozniak, chief executive at East Cooper hospital, said that it will be implemented at her facility once that approval comes.
"If somebody doesn't have anything and you want them to pay, it seems to make sense to give them a discount," she said.
