A SURVEY OF CALIFORNIA HOSPITALSASSISTING LOW-INCOME UNINSURED PATIENTS:

A SURVEY OF CALIFORNIA HOSPITALSASSISTING LOW-INCOME UNINSURED PATIENTS:

PRINCIPLES AND GUIDELINES 15

2VOLUNTARY PRINCIPLES AND GUIDELINES FOR

ASSISTING LOW-INCOME UNINSURED PATIENTS

INTRODUCTION

BROKEN HEALTH CARE SYSTEM

RIGID CHARITY CARE REQUIREMENTS

COMMITMENT TO CHARITY CARE PRINCIPLES AND GUIDELINES

HELPING HOSPITALS DEVELOP AND IMPLEMENT CHARITY CARE POLICIES

SURVEY OF HOSPITALS

SURVEY METHODOLOGY

SUMMARY OF FINDINGS

CONCLUSION

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1HOSPITAL CHARITY CARE

SURVEY RESULTS 21

APPENDIX

HOSPITAL CHARITY CARE

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INTRODUCTION

Every hour of every day, medical miraclesoccur in hospitals throughout California.Whether it’s life-saving trauma care for thevictim of a violent act or the joy of a preciousnewborn taking its first breath, hospitals arethe cornerstones of our communities.

For the vast majority of Californians—the morethan 80 percent who have some form ofgovernmental or private health insurancecoverage—the sophisticated technologies ofa modern hospital are often taken for granted.But for a patient who is uninsured and at thelower end of the economic scale, what wasonce a miraculous occasion can turn into afinancial quagmire.

A hospital’s job—first and foremost—is toprovide care to all patients. California hospitalsfulfill this mission every day. Hospitals are theproviders of health care, not the financiers.However, because we take our mission toserve seriously, California hospitals also arecommitted to assisting those patients whotruly cannot afford the health care they need.

This report, as promised to the administrationof Governor Arnold Schwarzenegger, theLegislature and other key policymakers, offersa quantitative insight into the recent effortsby California’s hospital community to applymeaningful financial assistance policies tolow-income uninsured patients.

BROKEN HEALTH CARE SYSTEM

A key element being overlooked in the publicdebate about hospital charity care is the underlyingcause of the problem: a broken health care systemthat has left nearly 7 million people—one out offive Californians—with no health insurance. Theunrelenting number of uninsured patients is thesingle biggest pressure point on hospitals, costingCalifornia hospitals more than $6.5 billion a yearin uncompensated care.

This report offers quantitative insight into the efforts byCalifornia’s hospital community to apply meaningful financial

assistance policies to low-income uninsured patients.

RIGID CHARITY CAREREQUIREMENTS ARENOT THE ANSWER

In the absence of a comprehensive health carecoverage solution, some lawmakers over the pastfew years have attempted to shift the responsi-bility onto hospitals through rigid and excessivelegislative proposals requiring charity care.With 56 percent of California hospitals currentlyoperating in the red, it’s clear this is not a realsolution to the problem of who should pay for thehealth care of the uninsured.

Legislative proposals requiring hospitals to providecharity care that far exceeds their ability to do sowill only hamper access to care. Hospital charitycare policies need to be flexible in order to meetthe needs of the diverse communities they serve.

As shown in this report, hospitals are adhering tothe intent of providing appropriate levels of charitycare for each community, without greatly divertingscarce resources.

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Working together,hospitals and

patients cansuccessfullynavigate the

complex andsensitive issuessurrounding the

payment forhospital care.

COMMITMENT TO CHARITYCARE PRINCIPLES ANDGUIDELINES

Most California hospitals have been usingresponsible guidelines for years as they work withuninsured patients who have limited financialresources. However, in February 2004, theCalifornia Hospital Association’s (CHA) Board ofTrustees reaffirmed its commitment to providingfinancial assistance to those truly in need througha comprehensive set of Voluntary Principles andGuidelines for billing and collecting from low-income uninsured patients.

CALIFORNIA HOSPITAL ASSOCIATION’S

VOLUNTARY PRINCIPLESAND GUIDELINES FOR

ASSISTING LOW-INCOMEUNINSURED PATIENTS

Recommends patients at or below 300percent of the federal poverty level—$58,050 for a family of four in 2005—be eligible to apply for charity care ordiscount payment programs.

Encourages hospitals to limit the expectedpayment from a low-income uninsuredpatient to no more than what the hospitalwould receive from Medicare or othergovernment-sponsored health programs,or as otherwise deemed appropriate bythe hospital.

Urges hospitals to ensure that theircollection practices—including the use ofexternal collection agencies—are consistentwith their mission and values.

Suggests hospitals prevent wage garnish-ments or liens on primary residences as ameans of collecting unpaid hospital billsfrom low-income uninsured patients.

NOTE:For full description of guidelines, see page 15

“Often, low-income patientsqualify for government aid orother discount options butaren’t aware of the resourcesavailable to them.”

HELPING HOSPITALS DEVELOPAND IMPLEMENT CHARITY CAREPOLICIESAs noteworthy as the Voluntary Principles andGuidelines are, CHA understands that the effortwill ultimately be meaningless unless hospitalstake direct action to implement policies that reflectthe unique needs of the communities they serve.

Immediately upon the adoption of the VoluntaryPrinciples and Guidelines last year, CHA embarkedon an extensive educational program to urgehospitals to quickly implement the VoluntaryPrinciples and Guidelines.

The underpinning of CHA’s educational campaignwas the publication of a comprehensive guidebookprovided to every California hospital. The guide-book, which already has been revised to ensurehospitals are implementing the latest bestpractices, is available online to ensure all hospitalfront-line staff have easy access to the mostcurrent information. Accompanying the guidebookwas a web-based seminar held in June 2004, atwhich more than 500 hospital leaders participated.

CHA also is making implementation a high priorityby routinely including it on the agendas of theCHA Board of Trustees, meetings of CHA’s Reg-ional Associations (Hospital Council of Northernand Central California, Hospital Association ofSouthern California and Hospital Associationof San Diego and Imperial Counties) and as apart of all public policy development efforts.CHA members also receive frequent written com-munications in the form of alerts and newsletters.

Educational activities are underway at nearly allhospitals across the state. Employees who workin hospital admissions, registration, and billingand collection departments as well as otheremployees who interact regularly with patients—including direct caregivers—are being trained toeffectively communicate hospital charity carepolicies and help patients obtain financialassistance.

Hospitals are posting signage in multiple languagesin all key areas and are working with local mediaand community organizations to publicize theavailability of financial assistance when needed.

To monitor implementation progress, some hos-pitals are conducting their own “secret shopper”audits to ensure patients are being properlyinformed about the availability of financialassistance programs.

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PATIENT COOPERATION:AN ESSENTIAL ELEMENT TO A HOSPITAL’S CHARITY CARE PROGRAM

Hospitals across California are investingenormous amounts of time, money andresources into refining and updating theircharity care programs. An essential com-ponent to the success of these programsis the cooperation of the patient.

Nearly all low-income assistance programs,whether hospital- or government-based, involvean application process. The process to determinea patient’s eligibility requires the patient to submitpersonal financial information.

Getting patients to submit the necessaryinformation is often very difficult. When a patientfails to cooperate with a government-sponsoredprogram, he/she is disqualified from participation.

But when a patient fails to provide the necessaryinformation to a hospital, the hospital often findsitself in a no-win situation—repeatedly attemptingto make contact with the patient, often to no avail.Then, when the hospital ultimately sends thepatient’s account to a collection agency, thehospital is unduly criticized for “aggressivecollection tactics.”

The problem is especially acute in hospitalemergency departments. Uninsured patients whoare treated and released often display no senseof responsibility when it comes to responding toa hospital’s follow-up inquiries regarding theireligibility for charity care or discounted payments.

Most hospitals find that the response rate to letterssent and phone calls made to emergencydepartment patients following their release is verylow. Unfortunately, it’s these patients who oftenend up being referred to collection agencies—anoption of last resort.

THE BREAKDOWN IN COMMUNICATION

Who doesn’t communicate with hospitals? Someevidence suggests that young people betweenthe ages of 18 and 30 are often negligent inresponding to requests for information—even whenit is to their advantage to do so. People whoalready have damaged credit also are among those

who often fail to communicate with hospitals. Theyare frequently so overextended that one morecreditor becomes overwhelming for them. Andthen there are the truly poor—patients who maybelieve there is nothing they can do, so they simplygive up and do not respond to the hospital.Ironically, it’s these patients who often could benefitfrom a hospital’s charity care program if they wouldonly communicate with the hospital.

Many uninsured patients also fail to make anyeffort to qualify for governmental health insuranceprograms (i.e., Medi-Cal, Healthy Families, etc.).Even though hospital personnel explain in detailthe steps that must be taken for an uninsuredpatient to qualify for governmental coverage (e.g.,an outpatient must go to a Medi-Cal office to applyfor Medi-Cal eligibility), these patients oftenthink they have done all they need to do by fillingout a hospital’s financial screening form. Hospitalofficials estimate that about 25 percent of uninsuredpatients seen in emergency departments couldqualify for Medi-Cal, but getting them to applyonce they leave the hospital is extremely difficult.

WORKING TOGETHER

To address these problems, hospitals are workinghard to improve proactive communications withpatients. As discussed elsewhere in this report,many hospitals are now including on patient billsinformation about financial assistance programsfor low-income uninsured individuals. Hospitalsalso are posting signage in visible locationsthroughout their facilities, and some organizationsare producing patient information brochures thatprovide information on how to apply for hospitalfinancial assistance programs.

At the end of the day, however, patients must beactive participants in this process. If they canqualify for a government assistance program, theyshould do so. If they may be eligible for a hospitalfinancial assistance program, they must providethe hospital with all necessary information. Andpatients who have the financial means must berequired to pay for their hospital services.

Working together, hospitals and patients cansuccessfully navigate the complex and sensitiveissues surrounding the payment for hospital care.

SURVEY OF HOSPITALS

As a further demonstration of its commitment,CHA recently completed a voluntary, compre-hensive survey of hospitals designed to monitorthe progress hospitals are making toward fullimplementation of these Voluntary Principles andGuidelines.

To the extent that changes are necessary, itunderstandably may take individual hospitalsseveral months or longer to retool billing andinformation systems to be in compliance with theVoluntary Principles and Guidelines.

Nonetheless, California hospitals are committedto be in compliance with the Voluntary Principlesand Guidelines.

(Note: For purposes of convenience, the terms“low-income assistance program” and “charitycare” program are used synonymously throughoutthis report.)

SURVEY METHODOLOGY

CHA, with the assistance of the consulting firm ofClark, Koortbojian & Associates, conducted asurvey of California hospitals to assess compliancewith CHA’s Voluntary Principles and Guidelines.The survey was conducted in early 2005. A totalof 347 of California’s full-service, acute-carehospitals were asked to respond to the writtensurvey and disclose the status of their indi-vidual charity care activities. Of the 347 hospitalscontacted, 159 responded—a 45.8 percentresponse rate.

CHA sent the survey, along with a cover letter, tohospital chief executive officers and chief financialofficers and asked them to involve the director ofpatient financial services (or similar position) inthe preparation of survey responses.

Responses were submitted via a secure Internetwebsite, with access controlled by a websitevendor to protect the confidentiality of all data.CHA did not have access to data submitted byindividual hospitals.

All survey responses submitted online wereforwarded from the website vendor to CHA’sexternal consultants for tabulation. Surveyresponses were aggregated for all hospitals andpercentage totals were calculated.

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California hospitalsare committed tobe in compliance

with the VoluntaryPrinciples and

Guidelines

SUMMARY OF FINDINGS

Charity Care Policies

Ninety-eight percent of responding hospitalsindicated that their charity care policies wereconsistent with CHA’s Voluntary Principles andGuidelines:

Eighty-one percent have implemented new orrevised charity care policies since January 1,2004.

Of those hospitals that have not yet adoptednew or revised charity care policies, 44 percentplan to present their hospital board of trusteeswith new or revised policies during 2005.

FINANCIAL ASSISTANCE FORLOW-INCOME UNINSUREDPATIENTS

California hospitals are responding to the needsof low-income uninsured and underinsuredpatients:

Ninety-one percent of hospitals reported thatthey offer both full and partial charity carewrite-offs to eligible low-income patients, witheight percent of hospitals offering a 100percent write-off. Only a very small numberof hospitals (1.2 percent) offer only discountpricing to eligible low-income patients.

Fifty percent of hospitals exceed CHA’sVoluntary Principles and Guidelines foroffering financial assistance to patients whoseincome is at or below 300 percent of thefederal poverty level. This means that manypatients who cannot qualify for governmentprograms can qualify for hospital-based low-income assistance programs.

Specifically, hospitals used the followingfederal poverty level (FPL) ranges in offeringcharity care:

100% – 199% 9% of hospitals

200% – 299% 36% of hospitals

300% – 399% 17% of hospitals

Greater than 400% 33% of hospitals

Not based on FPL 5% of hospitals

Public Notification

More than 90 percent of hospitals are improvingtheir efforts to inform the public about their charitycare programs:

Eighty percent of hospitals have postedsignage regarding their charity care programsin the admitting, registration and emergencydepartments.

Of the hospitals that have posted publicnotices, 74 percent have done so in multiplelanguages.

Fifty-three percent of hospitals utilize patientbilling statements to communicate theexistence of financial assistance policies.Clearly, there is still room for improvement inthis area, but the fact that more than half ofthe hospitals have begun utilizing patient billingstatements in this manner shows progress inutilizing this channel of communication.

Internal Training

An important component in implementing ahospital’s charity care program is the training ofkey hospital staff:

Eighty-four percent of hospitals have providedspecialized employee training. Included inthese educational efforts have been employeesworking in registration and admitting, financialcounseling, billing and collection, accounting,discharge planning, and senior management.

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Collection Practices

California hospitals are working to implementresponsible collection practices:

More than 90 percent of hospitals do not sendpatient accounts to a collection agency duringthe time that eligibility for either a governmentalprogram or the hospital’s own internal charitycare program is being determined.

Nearly 80 percent have taken the importantstep of communicating their mission andcharity care policies to collection agencies.

Sixty-three percent of hospitals have createdcontractual obligations for collection agen-cies to adhere to, based on the hospital’smission, charity care policies and practices.However, more work is needed to ensure thatcollection agencies are contractually obligatedto follow these guidelines.

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Former nurse and real estate agent, Gayle Laval,never had to worry about being without medicalinsurance. Aside from routine doctor visits, shewas healthy and rarely needed medical attention.

A devastating divorce changed everything.Suddenly, the 55-year-old Sebastopol residentwas faced with extra bills, a mortgage payment—and no health insurance. Self-employed, shestruggled to make ends meet.

Months after her divorce, Gayle started havingunusual coughing and choking episodes. Seekingcare at a local clinic, she underwent a series oftests. That’s when she discovered that she hadmultiple tumors constricting her esophagus andwindpipe and needed surgery.

“I was very worried about how I was going to payfor the surgery. For most of my life, I paid intothe system, and suddenly I found myself as oneof those people who falls through the cracks.”

After her diagnosis, Gayle wrote a letter to SutterMedical Center of Santa Rosa, where theprocedure would be performed.

“I wanted to let them know about my situation.I was uninsured and was also helping to supportmy daughter and grandchild. I simply could notafford a pricey hospital bill, but desperately neededthis surgery.”

Through the Sutter Medical Center of Santa Rosa’scharity care program, the hospital covered themajority of her $36,000 medical bill. Today, aftera successful surgery, Gayle has regained herhealth.

“I am so incredibly thankful for the financial supportand the good care I received at Sutter Santa Rosa.This was a blessing. It restored my hope and,more importantly, made me healthy.”

“I was very worried about howI was going to pay for the surgery.

...Suddenly I found myself asone of those people who falls

through the cracks.”

WHEN LIFE THROWSA CURVE BALL

More than 85 percent of hospitals donot use liens on primary residences or

wage garnishments as a means ofcollecting from low-income patients.

Hospitals nationwide are being asked to increasethe amount of free or reduced-price care they offerto uninsured patients. Most hospitals have hadcharity care and sliding-scale payment policies inplace for decades, but many hospitals are nowtaking a fresh look at their charity care policies toensure that they meet the heightened expectationsof the public.

A case in point is Loma Linda University MedicalCenter in San Bernardino County. Loma Linda isa 789-bed research and academic medical centeraffiliated with the Adventist Health System. Thehospital’s mission to “continue the healing ministryof Jesus Christ and to make man whole” is theguiding principle underlying its policies to helpuninsured and underinsured patients pay for theircare.

Although Loma Linda has had financial assistancepolicies in place for years, in April 2004 the hospitalundertook a comprehensive, year-long processof re-evaluating its policies and procedures forassisting low-income uninsured patients. Centralto Loma Linda’s evaluation process was thegoal of incorporating the California HospitalAssociation’s (CHA) Voluntary Principles andGuidelines for Assisting Low-Income UninsuredPatients.

Loma Linda hired an outside consulting firm toreview the hospital’s existing procedures and todraft a new policy with related application formsand an implementation plan. Loma Linda officials

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then began an exhaustive effort to overhaul thehospital’s registration and billing and collectionprocedures.

The hospital built a new computer database toautomate the determination of charity care eligibilityand keep statistics. The hospital also creatednew signage promoting the hospital’s charity carepolicy. The signs are in both English and Spanish,and are on display in all 19 registration areasthroughout the hospital campus.

Hospital personnel spent more than 400 hoursdrafting Loma Linda’s updated charity care policy,using the consultant’s recommendations as astarting point. This work included developing aself-pay discount policy and rate schedules. Toensure that Loma Linda can continue to meet itsmission and continue serving the needs of itscommunity, the hospital adopted CHA’s recom-mended policy of providing charity care ordiscounted self-pay care for those individualswhose income is at 300 percent of the federalpoverty level (FPL) or below.

Loma Linda officials then embarked on a com-prehensive training program for all hospital staffinvolved in discussing financial arrangements withpatients. All registration and billing and collectionemployees were put through this training, as werecase management personnel, social services staff,patient relations employees and home careworkers.

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ONE HOSPITAL’S JOURNEY TO IMPROVED CHARITY CARE POLICIES

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Loma Linda has estimated that it cost the hospitalapproximately $1 million in start-up costs toimplement the revised charity care program. Thehospital has hired eight new full-time employeesin the hospital’s financial assistance departmentand reassigned three other staffers from withinthe hospital, bringing the total number ofemployees who process applications andcommunicate with patients to 13. Additionally,the hospital has placed six new financial assistanceemployees in the emergency department to assistpatients after treatment is completed, one newworker in the admitting office and one new staffmember in the business office.

The hospital is now in the process of developingnew contracts with its outside collection agencies.These new contracts will incorporate Loma Linda’srevised charity care and self-pay policies andrecommendations from CHA’s Voluntary Principlesand Guidelines. This includes formalizing anexisting ban on placing liens on primary residencesfor unpaid hospital bills.

Loma Linda also will not knowingly authorize acollection agency to garnish a patient’s wagesunless there is clear documentation that the patienthas the financial means to pay for his/her careand has simply chosen not to do so.

CONTINUING A TREND

The efforts undertaken in the past year by LomaLinda University Medical Center are not unique.Hospitals large and small across California havebeen evaluating and updating their charity careand discount payment policies. They are investinglarge amounts of time, money and resources tobalance the needs of patients who truly cannotafford to pay for their care with the hospital’s abilityto stay solvent and continue caring for all patientsin the community.

A hospital’s job—first and foremost—is to providecare to anyone who needs it. Loma LindaUniversity Medical Center is but one example ofa hospital balancing its mission and its financialneeds to serve those who seek care.

CONCLUSION

California hospitals exist, first and foremost, tocare for patients in times of need. They providecharity care as a benefit to their communities.Hospitals take seriously their mission and theirvalues as they seek to improve the billing andcollection procedures utilized for low-incomeuninsured patients.

CHA’s Voluntary Principles and Guidelines arebeing implemented at hospitals across the stateto address the needs of the most vulnerablepatients in our society. These steps include:

Prohibiting wage garnishments andliens on primary residences;

Working respectfully with patients todetermine eligibility for financial assistance;

Offering full and partial charity carewrite-offs; and

Providing eligibility programs moregenerous than governmental programs.

Most hospitals adhere to charity care guidelinesthat best meet local needs. More can and muststill be accomplished in the areas of internal trainingand awareness, as well as better communicationwith patients.

As California’s hospitals strain daily to care for the10 million uninsured or underinsured, charity carecannot be addressed separately from the otherissues facing the state’s health care system.

In the meantime, CHA and its member hospitalsremain committed to assisting low-incomeuninsured patients through well-communicatedand appropriately implemented discount paymentand charity care programs.

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VOLUNTARY PRINCIPLES ANDGUIDELINES FOR ASSISTINGLOW-INCOME UNINSURED PATIENTS

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California hospitals are on the front lines—deliveringhigh-quality health care to millions of people everyday. They operate around-the-clock emergencyrooms and trauma centers, offer the latest medicaltechnologies and save lives every hour of everyday. By mission and by law, hospitals providecare to anyone who needs help, regardless of theirability to pay.

Unfortunately, California’s health care system isfragmented—with millions of people unable toafford the health care services they need. Nearly7 million Californians—one out of every fivepeople—have no health insurance, and another3 million residents are underinsured. Californiahospitals provide nearly $4 billion annually inuncompensated care.1

While some uninsured individuals have the financialresources to pay for the health care services theyneed, many do not. The financial challenges facedby the growing number of low-income uninsuredare real. Ultimately, the only true solution to thisproblem is for all Californians to have a basic levelof health insurance coverage available to them,and for governmental and private payers to payhospitals the true cost of providing care.

In the absence of universal health care coverageand adequate funding, California hospitals mustfind the financial resources to serve low-incomeuninsured patients. Unfortunately, a confusingarray of governmental laws, rules and regulationscurrently make it difficult for hospitals to respondto the needs of those patients who truly cannotafford the health care services they receive.

Regulatory reform is needed to enable hospitalsto effectively respond to the individual needs oflow-income uninsured patients. CHA anticipatesthat the U.S. Department of Health and HumanServices will shortly provide guidance on howhospitals across the country can appropriately billthe uninsured.2 CHA will provide further informationas it becomes available, and will make any revi-sions that may be necessary to these VoluntaryPrinciples and Guidelines.

In the meantime, CHA urges its member hospitalsto adopt the following principles and guidelinesto better meet the needs of those patients whotruly cannot afford the health care services theyreceive.

CALIFORNIA HOSPITALBILLING AND COLLECTION PRACTICES

Voluntary Principles and Guidelines for AssistingLow-Income Uninsured Patients

Adopted by the CHA Board of Trustees on February 6, 2004

1 At the end of 2004, the amount of uncompensated care provided by California hospitals had risen to more than $6.5 billion.

2 On February 19, 2004, the U.S. Department of Health and Human Services issued guidance to hospitals allowing them to provide discounts to uninsured and underinsured patients without violating federal anti-kickback statutes.

PRINCIPLES

California hospitals are united in providing carebased on the following principles:

Fear of a hospital bill should never preventany Californian from seeking emergencyhealth care services.

Each hospital should have financial assist-ance policies that are consistent with themission and values of the hospital. Thesepolicies, which should be broadly commu-nicated, should reflect a commitment toprovide financial assistance to patients whocannot pay for part or all of the care theyreceive.

Financial assistance policies must balancea patient’s need for financial assistance withthe hospital’s broader fiscal responsibilities.

All patients should be treated fairly, withdignity, compassion and respect.

Debt collection policies—by both the hos-pital and its external collections agencies—must reflect the mission and values of thehospital.

Financial assistance provided by the hospitalis not a substitute for personal responsibility.All patients should be expected to contributeto the cost of their care, based upon theirindividual ability to pay.

GUIDELINES

Financial Assistance Policies for Low-IncomeUninsured Patients3

Each hospital should maintain understand-able, written financial assistance policiesfor low-income uninsured patients, address-ing both the hospital’s charity care policy,as well as its discount payment policy forthe low-income uninsured.

Each hospital’s financial assistance policiesshould clearly state the eligibility criteria(i.e., income, assets) and the process usedby the hospital to determine whether apatient is eligible for financial assistance.Such process should take into accountwhere and how far a particular patient fallsrelative to existing federal poverty levels(FPL).

Patients who are at or below 300 percentof the FPL are eligible to apply for financialassistance under each hospital’s charitycare policy or discount payment policy.

Absent any regulatory prohibition, eachhospital should limit expected paymentsfrom these patients eligible for financialassistance to amounts that do not exceedthe payment the hospital would receivefrom Medicare, other government spon-sored health programs, or as otherwisedeemed appropriate by the hospital.

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3 “Low-income uninsured patient” is defined as a patient who is at or below 300 percent of the federal poverty level (FPL). In 2005, 300 percent of FPL was $58,050 for a family of four.

Hospitals should use their best efforts toensure all financial assistance policiesare applied consistently.

In determining a patient’s eligibility forfinancial assistance, hospitals shouldassist the patient in determining if he/she is eligible for government-sponsoredprograms.

Communication of Financial Assistance Policieswith Patients and the Public

Each hospital should post notices regardingthe availability of financial assistanceto low-income uninsured patients. Thesenotices should be posted in visible loc-ations throughout the hospital such asadmitting/registration, billing office, emer-gency department and other outpatientsettings.

Every posted notice regarding financialassistance policies should contain briefinstructions on how to apply for charity careor a discounted payment. The notices alsoshould include a contact telephone numberthat a patient or family member can call toobtain more information.

Hospitals should ensure that appropriatestaff members are knowledgeable aboutthe existence of the hospital’s financialassistance policies. Training should beprovided to staff members (i.e., billing office,financial department, etc.) who directlyinteract with patients regarding their hospitalbills.

When communicating to patients regardingtheir financial assistance policies, hospitalsshould attempt to do so in the primarylanguage of the patient, or his/her family, ifreasonably possible, and in a mannerconsistent with all applicable federal andstate laws and regulations.

Hospitals should share their financial assist-ance policies with appropriate communityhealth and human services agencies andother organizations that assist such patients.

Billing and Collection Practices

Hospitals should have written policies aboutwhen and under whose authority patientdebt is advanced for collection, and shoulduse their best efforts to ensure that pat-ient accounts are processed fairly andconsistently.

Hospitals should define the standards andscope of practices to be used by theiroutside (non-hospital) collection agencies,and should obtain written agreements fromsuch agencies that they will adhere to suchstandards and scope of practices.

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At time of billing, hospitals shall provide toall low-income uninsured patients thesame information concerning services andcharges provided to all other patients whoreceive care at the hospital.

When sending a bill to a patient, hospitalsshould include a) a statement that indicatesthat if the patient meets certain incomerequirements the patient may be eligible fora government-sponsored program or forfinancial assistance from the hospital; andb) a statement that provides the patientwith the name and telephone number of ahospital employee or office from whom orwhich the patient may obtain informationabout the hospital’s financial assistancepolicies for patients and how to apply forsuch assistance.

Any patient seeking financial assistancefrom the hospital (or the patient’s legalrepresentative) shall provide the hospitalwith information concerning health benefitscoverage, financial status and any otherinformation that is necessary for the hospitalto make a determination regarding thepatient’s status relative to the hospital’scharity care policy, discounted paymentpolicy, or eligibility for government-sponsored programs.

For patients who have an applicationpending for either government-sponsoredcoverage or for the hospital’s own charitycare and financial assistance program, ahospital should not knowingly send thatpatient’s bill to a collection agency 4 priorto 120 days from time of initial billing.

If a patient qualifies for assistance underthe hospital’s financial assistance policyand is reasonably cooperating with thehospital in an effort to settle an outstandingbill, the hospital should not send the unpaidbill to any outside collection agency if thehospital knows that doing so may negativelyimpact a patient’s credit.

The hospital or outside collection agencyoperating on behalf of the hospital shall not,in dealing with low-income uninsuredpatients, use wage garnishments or lienson primary residences as a means ofcollecting unpaid hospital bills. Thisrequirement does not preclude hospitalsfrom pursuing reimbursement from thirdparty liability settlements or tortfeasors orother legally responsible parties.

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4 “Collection agency“ is defined as an outside, non-hospital agency engaging in bad-debt collection activities as opposed to an outside agency simply carrying out the hospital’s normal billing function.

Eligibility for charity care and discountpayments may be determined at any timethe hospital is in receipt of all the informationneeded to determine the patient’s eligibilityfor its financial assistance policies.

Any extended payment plans offered by ahospital to assist low-income uninsuredpatients in settling past due outstandinghospital bills shall be interest-free.

Implementation of Voluntary Principles andGuidelines

Most California hospitals have been usingresponsible guidelines for years as they work withuninsured patients who have limited financialresources. To the extent that changes are nec-essary, however, it understandably may takeseveral months to retool billing and informationsystems to be in full compliance with theseguidelines. Nonetheless, California hospitals arecommitted to be in full compliance with theseVoluntary Principles and Guidelines by the endof 2004.

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SURVEY RESULTSAPPENDIX

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Has your hospital board of directors adopted a new or revised policyfor assisting the low-income uninsured since January 1, 2004?

YES......129 NO......24 N/A..........6

If the answer to the question above is YES, is the new or revised policyfor assisting the low-income uninsured consistent with the CHA Principlesand Guidelines for charity care?

YES......126 NO........2 N/A..........1

If the answer to the question above is NO, is hospital managementplanning on presenting the hospital board of directors with a new orrevised policy for assisting the low-income uninsured during 2005?

YES........11 NO......14 N/A......134

Note that Question 1B had a combined total of 25 YES and NO responses.This total differs from the number of NO responses in Question 1 by one additionalresponse. This difference was likely due to respondent error.

What kind of assistance is provided by the hospital’s policy for assistingthe low-income uninsured?

Charity care (write-off 100% of charges)................................13

Discounted charges (write-off a percentage of charges)..........2

Both charity care and discounted charges...........................144

Do not provide charity care or discounted charges..................0

SURVEY RESULTS

1.

1A.

1B.

2.

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If your hospital’s policy for assisting the low-income uninsured uses thefederal poverty level (FPL) guidelines as a standard for patient eligibility,please indicate the level used for basic qualification:

100% – 199%.............14

200% – 299%.............56

300% – 399%............ 27

Greater than 400% .....51

Not based on FPL ........8

No Response................ 3

Does your hospital inform the public about its program for assistinglow-income uninsured patients?

YES......147 NO......9 N/A......3

If the hospital does inform the public about its program for assisting low-income uninsured patients, which of the following methods are used?

The number of hospitals indicating the use of each means is identified in associationwith each method below. Please note that 147 hospitals indicated that they do informthe public about programs for assisting low-income uninsured patients.

Upon patient request....................................................................................137

Written materials provided to all patients upon registration ..........................80

Public notice postings in the admitting area.................................................118

Public notice postings in the emergency room.............................................116

Public notice postings in hospital on-site outpatientregistration areas...........................................................................................100

Public notice postings in hospital off-site outpatientregistration areas............................................................................................43

Public notice postings at community-based organization locations ...............4

Public service announcements in local media .................................................4

Through public speaking engagements to service groups orcommunity-based organizations....................................................................20

Other methods ...............................................................................................49

4.

5.

3.

23

6.

6A.

If public notices are utilized, are they provided in multiple languages?

YES......118 NO......10 N/A......31

If the answer to the question above is YES, please specify the languagesin which postings are available:

The number of hospitals indicating the use of each language is identified inassociation with each one below. Please note that there were 118 respondentsto Question 6 that indicated notices are posted in multiple languages.

English............118 Tagalog......29Spanish...........116 Korean.......32Chinese............ 34 Hmong.......29Vietnamese.......32 Other..........33

Which of the following items are included in or on the patient’s billingstatement?

The number of hospitals indicating the use of each statement message is identifiedin association with the specific statement language shown below. Please notethat 159 hospitals responded to Question 7.

A detailed statement of charges for services rendered .................................84

A request that the patient inform the hospital if the patient has healthinsurance coverage or coverage under a government health program..........95

A statement that informs patients that if they do not have healthinsurance coverage, they may be eligible for coverage under agovernment health program..............................................................................66

A statement that informs patients that if they do not have healthinsurance coverage, they may be eligible for coverage under thehospital’s low-income uninsured assistance program.....................................85

A statement indicating how the patient may obtain the necessaryinformation and/or forms for seeking eligibility for coverage undera government health program..........................................................................50

A statement indicating how the patient may obtain the necessaryinformation and/or forms for seeking eligibility for coverage underthe hospital’s low-income uninsured assistance program ............................78

None of the above ..................................................….............................11

7.

24

8. Which types of services and patient accounts are covered by the hospital’slow-income assistance program?

The number of hospitals indicating which types of services and patient accountsare identified in association with the specific service or account type shown below.Please note that 159 hospitals responded to Question 8.

Inpatient Services (Yes).............155 Rehabilitation Services (Yes)............67

Outpatient Services (Yes)..........152 Self-Pay/Private Accounts (Yes).....151

Psychiatric Services (Yes)..........88 Co-Pay and Deductibles (Yes).......106

Skilled Nursing Services (Yes).....53 Denied Charges (Yes)…...................73

Home Health Services (Yes).......50 None of the Above. (Yes)…................0

Does the hospital send patient accounts to an outside collection agencywhen the patient’s account is pending a decision for coverage by agovernment-sponsored program?

YES......14 NO......143 N/A......2

If the answer to the previous question is YES, at what age of theaccount is it sent out for collection?

It should be noted that only 14 hospitals answered YES to Question 9.In addition, two hospitals did not indicate a response, bringing the totalfor answers other than NO to 16. However, a total of 17 hospitalsresponded to Question 9A. These responses are shown below.

Before 90 Days…………2

90 – 119 Days………... . 2

120 – 149 Days…………6

150 – 179 Days…………0

After 180 Days ...……….7

Does the hospital send patient accounts to an outside collectionagency when the patient’s account is pending eligibility determinationunder the hospital’s low-income uninsured assistance program?

YES........4 NO......150 N/A......5

9.

10.

9A.

25

10A. If the answer to the previous question is YES, at what age of theaccount is it sent out for collection?

It should be noted that only four hospitals answered YES to Question 10.In addition, five hospitals did not indicate a response, bringing the total foranswers other than NO to nine. However, a total of seven hospitalsresponded to Question 10A. These responses are shown below.

Before 90 Days…………0

90 – 119 Days ...………..0

120 – 149 Days…………4

150 – 179 Days…………0

After 180 Days………….3

Has the hospital provided its collection agencies with its policy forassisting low-income uninsured patients, along with the hospital’smission statement that is to be used by the collection agencieswhen communicating with the hospital’s patients?

YES......125 NO........24 N/A......10

Have the hospital’s outside collection agencies formally agreed toadhere to the hospital’s policy for assisting low-income uninsuredpatients when carrying out its collection policies and practices aspart of their contractual obligation to the hospital?

YES........92 NO........47 N/A......20

Does the hospital allow the use of wage garnishments when trying tocollect bills from low-income uninsured patients?

YES........14 NO......138 N/A........7

Does the hospital allow the use of liens on primary residences whentrying to collect bills from low-income uninsured patients?

YES........18 NO......134 N/A........7

11.

12.

13.

14.

26

15.

16.

Does the hospital’s low-income uninsured assistance programprovide for an annual limit on the amount an eligible patientmust pay for hospital care?

YES......19 NO......134 N/A......6

Has the hospital provided special education or training to employeesregarding the hospital’s low-income uninsured assistance program?

YES......134 NO........20 N/A......5

If education has been provided, which employees have receivedsuch training? Please indicate all that may apply:

The number and types of employees who received specialized trainingrelated to the low-income assistance program are listed by each employeetype as shown below. Please note that 159 hospitals responded to Question 17.

Registration/Admitting………….132

Financial Counselor…………….137

Patient Advocate…………………76

Interpreter………………………....21

Accounting………………………..67

Billing………………………….....125

Collections……………...……….134

Discharge Planning………………55

Nursing………………………….....12

Department Directors……………47

Senior Management……………104

Other Classes of Employees.......17

17.

27

18. If training is provided, how frequently is training offered? Pleaseindicate which answer is most representative:

Annually........................................74

Every Six Months...........................5

New Employees............................16

Other............................................ 43

No Response............................... 21

Does your hospital use an outside organization or collection agencyto assist in determining eligibility for your hospital’s financial assistancepolicies for the low-income uninsured?

YES........86 NO......68 N/A......5

Are accounts written-off to bad debt when they are turned over to acollection agency?

YES......143 NO......13 N/A......3

19.

20.

The following California hospitals have signed the joint California Hospital Association(CHA) and American Hospital Association (AHA) “Confirmation of Commitment”

to assist low-income uninsured patients with hospital bills:Adventist Health/Central Valley General HospitalAdventist Health/Feather River HospitalAdventist Health/Hanford Community Medical CenterAdventist Health/Redbud Community HospitalAdventist Health/St. Helena Hospital & Center for Behavioral HealthAdventist Health/San Joaquin Community HospitalAdventist Health/Selma Community HospitalAlameda HospitalAlhambra Hospital Medical CenterAlta Bates Summit Medical Center —Alta Bates CampusAlta Bates Summit Medical Center —Summit CampusAlvarado Hospital Medical CenterAnaheim Memorial Medical CenterAntelope Valley HospitalArroyo Grande Community HospitalAurora Behavioral HealthCare—Charter OakBakersfield Heart HospitalBakersfield Memorial HospitalBanner Lassen Medical CenterBarlow Respiratory HospitalBarton Memorial HospitalBrotman Medical CenterCalifornia Hospital Medical CenterCalifornia Pacific Medical CenterCatalina Island Medical CenterCedars-Sinai Medical CenterCentinela Freeman Regional Medical Center,Centinela CampusCentinela Freeman Regional Medical Center, Marina CampusCentinela Freeman Regional Medical Center, Memorial CampusChapman Medical CenterChildren’s Hospital and Health CenterChildren’s Hospital and Research Center at OaklandChildren’s Hospital at MissionChildren’s Hospital Central CaliforniaChildrens Hospital Los AngelesChildren’s Hospital of Orange CountyChinese HospitalChino Valley Medical CenterCitrus Valley Medical Center —Inter-Community CampusCitrus Valley Medical Center —Queen of the Valley CampusCity of Hope National Medical CenterCoalinga Regional Medical CenterCoastal Communities HospitalCollege Hospital—CerritosCollege Hospital—Costa MesaColorado River Medical CenterColusa Regional Medical CenterCommmunity Hospital of San BernardinoCommunity and Mission Hospitals of Huntington ParkCommunity Hospital of Long BeachCommunity Hospital of Los GatosCommunity Hospital of the Monterey PeninsulaCommunity Medical Centers—ClovisCommunity Memorial Hospital of San BuenaventuraCommunity Regional Medical CenterContinental Rehabilitation Hospital of San DiegoContra Costa Regional Medical CenterCorcoran District HospitalCorona Regional Medical CenterDameron HospitalDelano Regional Medical CenterDesert Regional Medical CenterDoctors Hospital Medical Center of MontclairDoctors Hospital of MantecaDoctors Medical Center of ModestoDoctors Medical Center San Pablo/PinoleDominican HospitalEastern Plumas Healthcare DistrictEden Medical CenterEdgemoor HospitalEisenhower Medical Center and Betty Ford Center at EisenhowerEl Camino HospitalEl Centro Regional Medical CenterEmanuel Medical CenterEncino-Tarzana Regional Medical Center Encino CampusEncino-Tarzana Regional Medical Center Tarzana Campus

Enloe Medical CenterFairchild Medical CenterFoothill Presbyterian HospitalFountain Valley Regional Hospital and Medical CenterFrank R. Howard Memorial Hospital/Adventist HealthFremont Medical CenterFrench Hospital Medical CenterGarden Grove Hospital and Medical CenterGarfield Medical CenterGateways Hospital and Mental Health CenterGlendale Adventist Medical Center/Adventist HealthGlendale Memorial Hospital and Health CenterGlenn Medical CenterGoleta Valley Cottage HospitalGood Samaritan Hospital—BakersfieldGood Samaritan Hospital—Los AngelesGood Samaritan Hospital—San JoseGreater El Monte Community HospitalHealdsburg District HospitalHEALTHSOUTH Bakersfield Rehabilitation HospitalHEALTHSOUTH Tustin Rehabilitation HospitalHemet Valley Medical CenterHenry Mayo Newhall Memorial HospitalHi-Desert Medical CenterHoag Memorial Hospital PresbyterianHollywood Presbyterian Medical CenterHuntington Beach HospitalHuntington Memorial HospitalIrvine Regional Hospital and Medical CenterJerold Phelps Community HospitalJohn F. Kennedy Memorial HospitalJohn Muir Medical CenterKaiser Permanente Orange CountyKaiser Permanente Santa Teresa Medical CenterKaiser Permanente Baldwin ParkKaiser Permanente BellflowerKaiser Permanente FontanaKaiser Permanente Fresno Medical CenterKaiser Permanente Hayward/Fremont Medical CenterKaiser Permanente Los AngelesKaiser Permanente MantecaKaiser Permanente Medical Care Program San DiegoKaiser Permanente Oakland/Richmond Medical CenterKaiser Permanente Panorama CityKaiser Permanente Redwood City Medical CenterKaiser Permanente RiversideKaiser Permanente Sacramento/Roseville Medical CenterKaiser Permanente San Francisco Medical CenterKaiser Permanente San Rafael Medical CenterKaiser Permanente Santa Clara Medical CenterKaiser Permanente Santa Rosa Medical CenterKaiser Permanente Santa Teresa Medical CenterKaiser Permanente South BayKaiser Permanente South Sacramento Medical CenterKaiser Permanente South San Francisco Medical CenterKaiser Permanente Vallejo Medical CenterKaiser Permanente Walnut Creek Medical CenterKaiser Permanente West Los AngelesKaiser Permanente Woodland HillsKaweah Delta Health Care DistrictKern Medical CenterKern Valley Healthcare DistrictKindred Hospital—OntarioKindred Hospital—San Francisco Bay AreaLa Palma Intercommunity HospitalLos Angeles County—Harbor-UCLA Medical CenterLos Angeles County—King-Drew Medical CenterLos Angeles County—Olive View-UCLA Medical CenterLos Angeles County—USC Medical CenterLaguna Honda Hospital and Rehabilitation CenterLakewood Regional Medical CenterLodi Memorial HospitalLoma Linda University Medical CenterLompoc Healthcare DistrictLong Beach Memorial Medical CenterLos Alamitos Medical CenterLos Robles Hospital & Medical CenterLucile Salter Packard Children’s Hospital at StanfordMammoth HospitalMarian Medical CenterMarin General HospitalMark Twain St. Joseph’s HospitalMarshall Medical Center

Memorial Hospital Los BanosMemorial Medical CenterMendocino Coast District HospitalMenifee Valley Medical CenterMercy General Hospital, SacramentoMercy Hospital, BakersfieldMercy Hospital of FolsomMercy Medical Center Merced—Community CampusMercy Medical Center Merced—Dominican CampusMercy Medical Center Mount ShastaMercy Medical Center ReddingMercy San Juan Medical CenterMethodist Hospital of SacramentoMethodist Hospital of Southern CaliforniaMiller Children’s HospitalMills-Peninsula Health ServicesMission Community Hospital-San Fernando CampusMission HospitalModoc Medical CenterMonterey Park HospitalMoreno Valley Community HospitalMt. Diablo Medical CenterMt. Diablo Medical PavilionMountain Community Medical ServicesNatividad Medical CenterNorthBay Medical CenterNorthBay VacaValley HospitalNorthern Inyo HospitalNorthridge Hospital Medical Center —Roscoe Boulevard CampusNovato Community HospitalOak Valley Hospital DistrictO’Connor HospitalOjai Valley Community HospitalOlympia Medical CenterOrange Coast Memorial Medical CenterOroville HospitalOrthopaedic HospitalPacifica Hospital of the ValleyPalm Drive HospitalPalo Verde HospitalPalomar Medical CenterParadise Valley Hospital/Adventist HealthPetaluma Valley HospitalPioneers Memorial Healthcare DistrictPlacentia-Linda HospitalPlumas District HospitalPomerado HospitalPomona Valley Hospital Medical CenterPresbyterian Intercommunity HospitalPromise Hospital of East Los Angeles, Suburban Medical Center CampusProvidence Holy Cross Medical CenterProvidence Saint Joseph Medical CenterProvidence—Little Company of Mary Service AreaQueen of the Valley HospitalRancho Los Amigos National Rehabilitation CenterRedlands Community HospitalRedwood Memorial HospitalRegional Medical Center of San JoseRehabilitation Institute at Santa BarbaraRideout Memorial HospitalRidgecrest Regional HospitalRiverside Community HospitalRiverside County Regional Medical CenterSaddleback Memorial Medical Center—Laguna HillsSaddleback Memorial Medical Center —San Clemente CampusSaint Agnes Medical CenterSt. Bernardine Medical CenterSt. Dominic’s HospitalSt. Elizabeth Community HospitalSt. Francis Medical CenterSaint Francis Memorial HospitalSaint John’s Health CenterSt. John’s Pleasant Valley HospitalSt. John’s Regional Medical CenterSt. Joseph Hospital—EurekaSt. Joseph Hospital—OrangeSt. Joseph’s Behavioral Health CenterSt. Joseph’s Medical CenterSt. Jude Medical CenterSaint Louise Regional HospitalSt. Luke’s HospitalSt. Mary Medical Center—Apple ValleySt. Mary Medical Center—Long BeachSt. Mary’s Medical Center—San FranciscoSt. Rose Hospital

St. Vincent Medical CenterSalinas Valley Memorial Healthcare SystemSan Diego Hospice & Palliative CareSan Dimas Community HospitalSan Francisco General Hospital Medical CenterSan Gabriel Valley Medical CenterSan Gorgonio Memorial HospitalSan Joaquin General HospitalSan Joaquin Valley Rehabilitation HospitalSan Leandro HospitalSan Pedro Peninsula HospitalSan Ramon Regional Medical CenterSanta Barbara Cottage HospitalSanta Clara Valley Medical CenterSanta Rosa Memorial HospitalSanta Ynez Valley Cottage HospitalScripps Green HospitalScripps Memorial Hospital EncinitasScripps Memorial Hospital La JollaScripps Mercy Hospital Chula VistaScripps Mercy Hospital San DiegoSeneca Healthcare DistrictSequoia HospitalSeton Medical CenterSeton Medical Center CoastsideSharp Chula Vista Medical CenterSharp Coronado Hospital and Healthcare CenterSharp Grossmont HospitalSharp Metropolitan Medical CampusShasta Regional Medical CenterSherman Oaks Hospital and Health CenterSierra Nevada Memorial HospitalSierra View District HospitalSierra Vista Regional Medical CenterSierra-Kings District HospitalSimi Valley Hospital/Adventist HealthSonoma Valley HospitalSonora Regional Medical Center/Adventist HealthSouth Coast Medical Center/Adventist HealthSouthern Inyo Healthcare DistrictStanford Hospital and ClinicsSurprise Valley Health Care DistrictSutter Amador HospitalSutter Auburn Faith HospitalSutter Center for PsychiatrySutter Coast HospitalSutter Davis HospitalSutter Delta Medical CenterSutter Lakeside HospitalSutter Maternity and Surgery Center of Santa CruzSutter Medical Center of Santa RosaSutter Medical Center—SacramentoSutter Roseville Medical CenterSutter Solano Medical CenterSutter Tracy Community HospitalTahoe Forest Hospital DistrictTehachapi Valley Healthcare DistrictTemple Community HospitalTorrance Memorial Medical CenterTri-City Medical CenterTri-City Regional Medical CenterTulare District Healthcare SystemTuolumne General HospitalTustin Hospital and Medical CenterTwin Cities Community HospitalUkiah Valley Medical Center/Adventist HealthUniversity Medical Center (Fresno)University of California Davis Medical CenterUniversity of California Irvine Medical CenterUniversity of California Los Angeles Medical CenterUniversity of California Los Angeles Neuropsychiatric Institute & HospitalUniversity of California San Diego HealthcareUniversity of California—UCSF Medical CenterUSC University HospitalUSC/Norris Comprehensive Cancer Center and HospitalValleyCare Medical CenterVerdugo Hills HospitalWashington Township Health Care DistrictWest Anaheim Medical CenterWest Hills Hospital and Medical CenterWestern Medical Center—AnaheimWestern Medical Center—Santa AnaWhite Memorial Medical Center/Adventist HealthWhittier Hospital Medical CenterWoodland Healthcare