Lawrence Memorial Hospital looks at changes to charity care policy
The way financially strapped patients receive a discount on medical care at Lawrence Memorial Hospital soon may change.
LMH board members on Wednesday were told the amount of unpaid care the hospital provides has grown to $30 million in 2012 from about $18 million in 2007. And that has LMH leaders looking at changes to the hospital’s charity care policy.
But board members were told on Wednesday that the changes aren’t expected to result in a reduction in the amount of charity care services the not-for-profit hospital provides.
“We think we actually will have more people qualifying for charity care under this policy than under the current policy,” said Joe Pedley, LMH’s chief financial officer.
People receiving charity care at the hospital will have a few new expectations to meet, if the policy is approved. The new policy calls for anybody who applies for charity care to pay minimum fees for service at the hospital. The hospital’s current charity care policy allows for service to be provided at no charge, if applicants meet income guidelines.
The new policy will set nominal fees for services, such as a $250 for an inpatient hospital stay; $50 for an emergency room visit; and $20 for a hospital outpatient visit.
“This makes us consistent with other safety net providers in the community,” Pedley said. “We think it will help people use the system more appropriately.”
Pedley, though, said patients won’t be denied service because they can’t pay the fee.
The proposed policy does raise the amount of money an individual or household can make and still qualify for charity care. The current policy requires an individual or household to be at or below the federal poverty level — which was about $23,000 for a family of four in 2012 — to qualify for the full benefits of charity care. The new policy would allow people at 150 percent of the federal poverty level — about $34,500 for a family of four — to qualify.
The new policy also would allow people at about 300 percent of the poverty level to qualify for discounted services under the charity care program. In addition, the new policy would recognize a group of people termed as “medically indigent.” Patients would fall into that category if their medical bills — after payments are made by their insurance companies — still exceed a certain percentage of their household incomes.
Patients who have medical bills from a single event that exceed 50 percent of their annual household income would receive a 90 percent discount on their services. Patients with medical bills between 25 percent and 49 percent of their annual income would receive an 80 percent discount.
Pedley said the hospital decided to change its income levels after reviewing policies at several hospitals in the Topeka and Kansas City area. The survey found LMH had one of the most restrictive policies in the area.
Pedley told board members on Wednesday that he doesn’t think changing the policy will cause the amount of “uncompensated care” the hospital provides to increase any more quickly than it has in recent years.
In 2012, preliminary numbers show LMH provided $30.8 million in uncompensated care. About $12.5 million of that care was categorized as charity care, while the rest was written off as bad debt — a category reserved for patients who had the means to pay but didn’t.
Pedley, though, suspects a significant portion of the hospital’s bad debt total actually should be categorized as charity care because the patients really didn’t have a feasible way to pay for their medical bills. By incorrectly placing such services in the bad debt category, the hospital ends up spending time and resources trying to collect a debt that likely will never be paid.
“There is no intent to reduce the amount of charity care we provide,” Pedley said. “This policy really will just save everybody a lot of time and trouble if we get this care into the right category to begin with.”
Hospital board members reviewed the policy on Wednesday but weren’t asked to approve the new plan. The board is expected to take action on the policy at their February board meeting.
In other LMH news, the board received preliminary numbers on patient activity at the hospital in 2012. Those statistics included:
• Patient discharges totaled 5,981, up from 5,883 in 2011. The number fell short of the 6,053 the hospital had budgeted for.
• Average length of patient stay declined to 2.8 days, down from 2.9 days. The hospital had budgeted 3.0 days.
• The number of births totaled 1,103, up from 1,086 in 2011 but below budget projections of 1,148
The uptick in births was the first in several years, said Gene Meyer, president and CEO of the hospital.
“I’m optimistic about the numbers on births,” Meyer said. “They are still not where we think they need to be, but it is better than we have seen in recent years.”