Free care, unpaid bills cost millions for Martha's Vineyard Hospital
The Martha's Vineyard Hospital must treat everyone who requests medical care. But not all patients pay their bills.
In some cases, patients who meet income guidelines qualify for so-called free care, under the Massachusetts "Health Safety Net" program. Or, patients simply walk away and do not pay their bills.
It all adds up. The hospital provided $4,129,732 million in uncompensated care in the 2009 fiscal year that ended on March 31, 2009.
The number might have been higher but for Commonwealth Care, the subsidized state health insurance plan enacted to provide universal access to insurance coverage for all Massachusetts citizens.
By law, with some exceptions, all residents of Massachusetts must have health coverage that meets state standards. Commonwealth Care premiums and subsidies from public funds are based on income, family size, and plan coverage.
Tim Walsh, Martha's Vineyard Hospital chief executive officer, said this week that Commonwealth Care has made a difference that is reflected in the numbers. In fiscal year 2008 the hospital provided $5,000,954 in uncompensated care.
Free care, bad debts
Annually, hospitals and state taxpayers contribute to the state's "free care pool," a reserve from which payments are made to hospitals to help underwrite, but not completely offset, the costs of free care.
Money is provided based on a state formula. In 2009, Martha's Vineyard Hospital paid $422,671 into the free care pool. It received $1,181,992. The hospital covered the additional $2,267,606 in care it provided to patients covered under the Health Safety Net program.
Patients must be prequalified to benefit from the free care program. Depending on income and family size, all medical care or a portion of care is covered.
Bad debt is uncomplicated. Patients come into the hospital and receive care and then do not pay the bill.
In 2009, the hospital claimed $1,862,126 as bad debt. Mr. Walsh said the numbers also reflect individuals who for one reason or another, mental or physical conditions, might qualify for free care but do not apply.
A look at the cost of uncompensated care from 2001 to 2009 reflects continued growth in hospital volume, Mr. Walsh said. The number spiked in 2007 to $6,236,908. Mr. Walsh said that year the hospital made efforts to bring longstanding accounts up to date, and the figure does not entirely reflect activity that year.
He said the decline in bad debt in 2008 is tied to the change in state law and the introduction of Commonwealth Care. More people have some type of health insurance.
From 2008, the year the mandatory health insurance law went into effect, to 2009, the charge for uncompensated care dropped from $5,000,954 to $4,129,732. "I think it has worked really well," Mr. Walsh said. "It shows in the numbers, the bad debt especially came down quite a bit."
Mr. Walsh added that what the health insurance law has not affected is the cost of providing free health care to illegal residents, who may apply to receive free care but are not eligible to participate in the state insurance program.
Mr. Walsh remains enthusiastic about the state insurance program. "It has worked, and I think very successfully," he said. "It is a very complicated system, and it still needs to be worked on, but it worked a lot better than I thought it would."
Mr. Walsh pointed to people who now come to see a primary care doctor and do not rely on the emergency room for care. "It is more continuous care, not episodic care," he said.
Successful, despite the economy
Martha's Vineyard Hospital has so far withstood the buffeting of a down economy. In January, the Island hospital had braced for a loss. Instead it ended the year in March with a profit of $635,000. That was less than the $735,000 projected in the budget but good news in bad times.
Mr. Walsh remains concerned about what the future may bring. He said there is no guarantee that the state's free care payments will continue to be greater than what the hospital pays into the pool, which is currently running a deficit.
There is also a great deal of discussion about insurance plan coverage. Mr. Walsh said the program works well, and it would be unfortunate if it were to falter now.
State officials can tinker with coverage, but the hospitals must still provide care, Mr. Walsh said. For example, whether or not a plan covers MRIs, if a doctor decides an MRI is needed, the test will be ordered. "That's the way it should be," he said. "The problem is the hospital does not get paid for it."
Access for all
In addition to the hospital, Dukes County's Vineyard Health Care Access Program advises low income patients of state health care programs and provides applications and help completing them.
Sara Kuh, program director, said that in order to qualify for free care on Martha's Vineyard an individual's annual income cannot exceed $21,660, approximately $416 per week.
If that individual made between $21,000 and $43,000, he or she can receive partial free care based on a deductible amount.
A family of four can have an annual income of no more than $44,100. In most cases, Ms. Kuh said, the children would qualify for coverage, and the family would receive free care as a secondary coverage.
Ms. Kuh said immigration status has no bearing on the free care application process.
There is one application for all of the state programs through Mass Health, Ms. Kuh said. Depending on the specifics of the application, a person may qualify for one or another program.
The application includes a question regarding whether a person is a U.S. citizen. A person who answers no must answer a series of questions. If an applicant is not a legal permanent resident, he or she checks a box that says they are applying only for limited benefits.
Ms. Kuh explained that there are only four programs available to such an applicant: Health Safety Net or free care, Mass Health Limited, Children's Medical Security Program, and Healthy Start, which covers prenatal care.
Ms. Kuh said Massachusetts is very progressive in terms of health care benefits for all residents.