Lawrence Memorial Hospital leaders are concerned about a significant increase in charity care.
Simon Scholtz, chief financial officer, said the hospital spent $2.9 million during the past three months on charity care, which is more than the $2.8 million it spent during the first six months.
Charity care is free health care for those who truly can’t afford to pay their bills.
The type of free health care that the hospital provides runs the gamut, which includes laboratory tests, surgeries or oncology care.
Often, those who qualify for the financial assistance are referred by Health Care Access, a health care clinic for uninsured Douglas County residents, or through the emergency room.
With the economic downturn, hospital leaders projected an increase in charity care this year and budgeted $8 million, a 19 percent increase over 2008. But the recent surge in charity care was not expected.
“It appears to be a combination of the number of patients who have applied for financial assistance as well as the magnitude of the bills,” Scholtz said. “There have been several very large balances that have been written off in the last few months. There have been some very sick people.”
To qualify for assistance, people must meet Federal Income Poverty Guidelines. For example, a family of four with income of $31,800, or 150 percent of the FIPG, would be eligible for a 50 percent discount off their hospital bill.
If income is above 200 percent, LMH offers all patients a payment plan option with no interest added, which allows patients to make monthly payments on their bills.
Also, LMH recognizes that bills at times can be catastrophic, and if a patient’s bill is more than half their annual income, discounts may be applicable for up to 90 percent of their bill.
Scholtz said some of these patients may end up qualifying for government assistance, but there is a backlog for Medicaid applications. In that case, the hospital may or may not be reimbursed for their care. Otherwise, LMH doesn’t receive a reimbursement.
“It is all done as part of our community benefit obligation,” he said.
Scholtz, who has worked at LMH for 10 years, said he hasn’t seen a sustained increase like this before. He said there have been months when the totals were high, but not for three consecutive months.
“It will impact our budget for next year,” he said. “We will be budgeting for an increase.”
The nonprofit hospital ended 2008 with operating income of $8 million. Through September, it has had operating income of $8.9 million, up 31 percent from the $6.8 million budgeted for 2009.