Published on January 22, 2013

LMH Board Considers Expanding Charity Care Eligibility

"Under the new policy, more folks will qualify for charity care at LMH," Joe Pedley, CFO.

As part of our continual effort to better serve our community, Lawrence Memorial Hospital is updating its charity care policy. As presented to the LMH Board today, proposed revisions will expand the criteria for patients to qualify for charity care, making more people eligible.

Chief Financial Officer Joe Pedley explained that over the past several years hospitals have been under scrutiny for billing and collection practices. While LMH has never used any of the practices that have received national attention, the Board suggested that to remain proactive and pro-gressive, LMH review and revise the existing policy. Area hospitals and safety net providers were surveyed and those results, as well as other industry trends, guided the proposed policy changes.

"Under the new policy, more folks will qualify for charity care at LMH," Joe said. Previously the maximum charity discount was available to patients with household incomes up to 100 percent of the Federal Income Poverty Guidelines (FIPG). The proposed guidelines provide the maximum charity care discount to patients with household incomes up to 150 percent of FIPG. In addition, the proposed policy would extend the levels of charity discounts available up to 300 percent of FIPG where previously it was 200 percent.

The proposed policy also defines and recognizes patients who are medically indigent. Joe explained these are uninsured folks who have household incomes that exceed the charity guide-lines, but have experienced a catastrophic medical event that has left them with medical bills that they cannot reasonably be expected to pay.

The new policy will help to ensure care for residents of Lawrence and surrounding communities by defining our primary and secondary service areas. Except for emergent or urgent services, patients who reside outside the LMH-defined service area will not be eligible for charity care.

The new policy also provides for an expectation of nominal payments from patients who qualify for charity care, including $10 per LMH clinic visit, $20 per hospital outpatient visit, $50 per emergency room visit, and $250 for any inpatient stay, observation stay or outpatient surgery. However, Joe noted that even these amounts can be waived in extreme cases.

In 2012, preliminary statistics show LMH will write off approximately $12.6 million in charity care and $18.2 million in bad debt. Joe said he expects the new policy will not impact the total amount of uncompensated care in the future, but it is likely more bad debt will shift to charity care because more patients will qualify.

The Board is expected to take action on the proposed policy at its February meeting.

Read LJWorld reporter Chad Lawhorn’s story. 

LMH Board Considers Expanding Charity Care Eligibility

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