A state proposal to set income standards for charity care that Maryland hospitals provide - and are reimbursed for by the state - is welcome and overdue. A report on how Maryland hospitals provide treatment for indigent and uninsured patients found that collection policies on unpaid patient bills vary widely and are unclear. And that needs to change.
A series in this newspaper last year detailed the lengths some hospitals will go to collect bills despite the state reimbursements. That included placing liens on the homes of people with few assets but for the house they live in. The practice left many patients at the mercy of collection agencies. The Baltimore Sun's investigative reporting also raised questions about whether hospitals were getting paid twice, through Maryland's rate-setting system that ensures no patient is turned away from a hospital and as a result of lawsuits. The state hospital association denies that hospitals are double-dipping, but the present system doesn't provide a mechanism to check that.
As a result of the series, Gov. Martin O'Malley ordered a review of the charity care system. A report on that review by the Health Services Cost Review Commission was released last week. As part of its work, the commission has initiated special audits to verify hospitals' claims that they aren't being paid twice for care provided to poor patients. That was the right call. Some mechanism should be in place to ensure that hospitals are paid only once for uncompensated care.
State Health Secretary John M. Colmers is supporting the commission's charity care standard. It would require hospitals to provide free care to patients whose incomes are less than 200 percent of the federal poverty guideline. That means $44,100 for a family of four. The recommendation would be a more generous standard than the voluntary guideline used by most hospitals now. But it recognizes that despite the state's expansion of the Medicaid program to cover more families, there are working poor people who still don't have the means to pay significant hospital bills, costs that can bankrupt individuals. The state's unique rate-paying system has achieved many dividends for Maryland beyond ensuring hospital care for all patients regardless of ability to pay. It has helped keep the state's hospitals' costs below the national average. The health services commission report provides a reasonable framework to discuss needed reforms, while preserving the benefits of the system. As Maryland lawmakers review the panel's recommendations and other relevant legislation, they should strive to shape a fair, equitable system that serves patient and hospital alike.