Most bad-debt writeoffs involve patients poor enough to qualify for state reimbursement
BOSTON - Practically all patients whose care in Massachusetts hospitals are reimbursed out of state free-care funds have incomes within the guidelines for such care, according to a report in the July/August issue of Health Affairs. However, contrary to a common belief that many patients whose expenses are written off as bad debt are able to pay their bills, the study of 1996 data found that the great majority of bad-debt patients had incomes that would have made them eligible for state-sponsored free care or Medicaid.
The report was written by Joel Weissman, PhD, of the Massachusetts General Hospital (MGH) and Harvard Medical School; Paul Dryfoos, MBA, a Boston-based health care consultant and former Massachusetts deputy state budget director; and Katharine London of the Massachusetts Division of Health Care Finance and Policy (DHCFP).
"We found that a lot of care written off to bad debt is delivered to patients who are actually quite poor, which has potentially serious implications, since these patients may be reluctant to obtain treatment in the future if they fear being billed for services they cannot afford," says Weissman, a member of the MGH Institute for Health Policy and the report's lead author. "This information, along with some public policy changes, has prompted many hospitals in the state to set up programs to identify all uninsured patients who might be eligible for free care or for Medicaid programs."
Massachusetts hospitals receive at least partial reimbursement for the care of
uninsured patients from the state's uncompensated care pool. This reimbursement
falls into three categories: full free care, for those with incomes below 200
percent of the federal poverty level; partial free care, for those with incomes
between 200 and 400 percent of the poverty level; and emergency bad debt, for
emergency care rendered to uninsured
Contact: Susan McGreevey
Massachusetts General Hospital