(NEW YORK) MintPress — In 2004, 24-year-old Manny Lanzar was admitted to St. Luke’s Hospital in New York City after being diagnosed with a severe brain condition that required immediate help.. The hospital told him that he needed insurance before he could receive treatment, but Lanzar worked at a fast-food restaurant and didn’t qualify for health insurance, so he applied for Medicaid and scheduled the surgery. When the application was denied, the hospital cancelled the operation. Two years later, he died.
Even though New York’s hospitals were getting nearly $1 billion a year in what are called Indigent Care Pool (ICP) funds from the State and federal governments, Lanzar was never offered any financial aid. The widespread media attention led to a public outcry and the passage of New York’s 2006 Hospital Financial Assistance Law (HFAL), commonly known as “Manny’s Law,” designed to ensure medical care for those most in need.
But a new study of financial procedures at all 201 State hospitals and records of the New York State Department of Health records by the Community Service Society of New York (CSSNY) concludes that most medical centers are violating the law and getting away with it. “Clearly, the system is not working,” Elisabeth R. Benjamin, the group’s vice president of health initiatives, tells MintPress.
Under HFAL, in order to get ICP funding, hospitals must have financial assistance programs (the law establishes a sliding fee scale rate for all uninsured patients living at or below 300% of the Federal Poverty Level (FPL); publicize information about their financial aid policies so that patients are aware of what is available to them; and refrain from issuing bills or collection notices and taking other action to retrieve funds while an application for financial assistance is pending.
It is one of the most complicated systems in the country; hospitals can claim reimbursement for both uncollected bills and financial assistance to uninsured patients. CCSY’s report, though, found that some hospitals simply lumped all of their claims for out of pocket expenditures together; many had not provided financial aid or even applications. Yet those hospitals, and other centers that had filed hundreds of liens against patients’ homes, were allowed to get money from the charity care pool.
“The main problem is that there is no incentive for hospitals to provide aid, as required,” explains Benjamin, “because the State of New York is reimbursing them for uncompensated costs.”
According to the CCSNY, those costs could constitute a crisis for millions of patients: Medical debts and illness account for 62% of all personal bankruptcies in the United States; unmanageable medical bills are the cause of 23% of all home foreclosures in the United States; and placement of a lien on a patient’s home can impede home sales, complicate mortgage refinancing, and damage personal credit.
New York is not the only state dealing with the issue. Several others, including Illinois, California and Minnesota have passed laws in recent years trying to prevent hospitals from aggressively pursuing unpaid bills.
New York’s Department of Health has acknowledged the need for stronger law enforcement and says a group of administrators and advocates and is going to work on developing a better system. But it could be too little too late.
Advocates say change is urgent because of new rules that will come into effect in 2014 under the Patient Protection and Affordable Care Act (PPACA) signed into law by President Obama in March, 2010 to overhaul the country’s health care system and guarantee access to medical insurance for tens of millions of people.
The CCSNY estimates that as many as 1.8 million of the roughly 2.8 New Yorkers who are uninsured could remain uncovered. At the same time, New York State’s Indigent Care Pool stands to lose hundreds of millions of federal dollars, because the new legislation will no longer treat uncollected bills as if they were charity care.
“All the more reason to be allocating those funds to the people most in need, and to the hospitals providing those who are most in need,” says the CCSNY’s Benjamin.
Source: MintPress
.