In a new study of 170 tax-exempt hospitals before and after the onset of the COVID-19 pandemic (2019-2021), findings suggest that 84.1 percent of those hospitals made changes to their charity care policies during the timeframe. Tax-exempt hospitals are required by law to provide charity care, with those policies required to be written and published online with clear eligibility criteria according to the Affordable Care Act.
For the study, head investigator Dr. Christopher Goodman, a clinical assistant professor of internal medicine at the University of South Carolina School of Medicine Columbia, and his co-authors, Amber Flanigan, LISW-CP, MPH, CHES (Prisma Health); Janice C. Probst, PhD (UofSC Arnold School of Public Health) and Ge Bai, PhD (Johns Hopkins Bloomberg School of Public Health), developed a nationally representative sample of large tax-exempt hospitals and downloaded their charity care policies in 2019 and then downloaded those policies again in 2021 to analyze them for change.
Three factors were used for analysis: whether the hospital is in a state that expanded Medicaid eligibility before or during the analysis period; whether ownership changed owing to a merger or acquisition; and whether the hospital is a nonprofit or a government hospital.
Among the 170 hospitals in the study, 151 were available for comparison and of the 84.1 percent who made changes, 51 percent of those hospitals made substantial adjustments to their policies.
“Tax-exempt hospitals are required to provide charity care, but they are largely free to design their own policies and make changes as they see fit. Our study suggests that hospitals are regularly updating their policies, at times for the worse, even in the midst of the COVID-19 pandemic as health outcomes worsened.”
Hospitals made a wide variety of changes to eligibility criteria such as income cutoffs, asset limitations and residency requirements according to the analyzed data. While the changes were mostly positive – 31 percent of hospitals made adjustments that were overall more generous – a small number of hospitals, 12 percent, made changes that were restrictive. Changes to the policies in relation to insurance were also common.
The study suggests that greater transparency and simplification in charity care policies, especially as it relates to eligibility criteria, are needed to ensure adequate access to charity care for those in need.
“Charity care is the most important way for tax-exempt hospitals to justify their taxpayer subsidies,” Bai commented. “Many tax-exempt hospitals can do more to lower access barriers to charity care faced by vulnerable uninsured and underinsured patients.”
The full study was published on Sept. 27, 2022, in Jama Network Open.