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More Marylanders going to the hospital with insurance

Significantly fewer people have been going to Maryland hospitals this year without health insurance, according to new data provided to The Baltimore Sun by state officials, who now say the rates that hospitals charge will rise more slowly for everyone.

Hospitals are supporting a recommendation by the Health Services Cost Review Commission, which sets their rates, to reduce a proposed annual across-the-board rate increase that will take effect in July by about a quarter.


"It's great that significantly fewer people are coming in without insurance than before," said Maryland Health Secretary Joshua Sharfstein. "Without question it's because of the coverage expansion under the Affordable Care Act."

The Health Services Cost Review Commission found that in the first three months of the year patients classified as charity cases dropped by 62 percent in Maryland hospitals and those logged as "self pay" — those who have no insurance and pay for their own care — were down by 24 percent, indicating more people were insured.


Officials in Maryland and elsewhere have predicted that hospitals eventually would see fewer unpaid bills after the uninsured began to gain coverage in January under the federal health care reform law. But state officials can't yet say how much the reduction in charity cases might impact unpaid bills at the state's hospitals.

A report from the Urban Institute's Health Policy Center estimated that the amount of uncompensated care nationally would fall from $62.1 billion in 2009 to $46.6 billion in 2019 as a result of the reform law. Without reform, the report found that that the bad debt would rise to as much as $141 billion in 2019.

And though the level of insurance coverage is promising, the problem of bad debt isn't resolved, Sharfstein and others said. Uncompensated care in Maryland has been on the rise for years — topping $1 billion in fiscal 2012 and coming close to $1.1 billion in fiscal 2013. As a result, Maryland's practice of allowing hospitals to charge everyone somewhat inflated bills to make up much of the difference will continue.

Not all of Maryland's estimated 800,000 uninsured gained insurance under health reform. Half are undocumented and don't qualify for new coverage. And state officials won't know for some time how many of the 343,000 people who got Medicaid and private coverage through Maryland's new health insurance marketplace were uninsured before.

Further, other factors contribute to the rise in uncompensated care, such as the higher deductible health insurance plans that employers are increasingly offering workers, said Steve Ports, deputy director for policy and operations at the Health Services Cost Review Commission.

The panel based its rate increase for fiscal 2015, starting July 1, in part on data from about 96,000 Maryland adults who moved this year to Medicaid from a bare-bones state health program that offered no hospital coverage. Analysts found their hospital bills totaled about $164 million last year and assumed little of it was paid.

With more comprehensive coverage under Medicaid, those Marylanders won't leave such a trail of debt, Ports said.

Donna Kinzer, the commission's executive director, told Sharfstein in an email that the panel would keep monitoring those classified as charity cases and self pay, and if they continued to decline, there was "potential for additional reductions" in rates for everyone.


The commission will vote on the revised rate increase at its June 11 meeting.

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Hospitals in general agreed that reducing the proposed rate increase is warranted.

"We support the recommendation," said Jim Reiter, spokesman for the Maryland Hospital Association. "The numbers add up."

The move also is supported by some hospitals that have substantial uncompensated care, such as Mercy Medical Center in Baltimore.

The hospital's CEO, Tom Mullen, said rate changes typically lag upticks and downturns in revenue by a year or more, but the improvement in uncompensated care appears to be so significant that faster action was not surprising. But he said some hospitals are affected more than others by bad debt and he expects state officials to act just as fast if the expected reductions don't fully materialize.

He said Mercy doesn't expect its reduction in uncompensated care to be as large as the state average. Even though insurance is available to more people, Mullen said, they don't always acquire it. And for people with high deductibles, he said, "we often write them off, too."


But, he added, "It's very positive. Having more people covered is good. In Maryland, everyone benefits."