Financing Charity Care
Role: Director of Community Care and Outreach
Audience: Internal, hospital leadership team(s)
Topic: Financing Charity Care
Scenario: You have worked for ABC Hospital for several years. Recently, you were promoted to be the Director of Community Care and Outreach. In this role, you are responsible for increasing the hospital’s presence in the community, reaching new patients, and ensuring patients receive effective and coordinated care. You are aware of ABC Hospital’s current issue with charity care: there is no defined policy for who can write off an account, and no defined standards for what qualifies a patient to receive charity care. The billing department has reported multiple complaints due to the lack of a policy, and frustrations from both providers and patients. Your presentation will address how to appropriately utilize the charity care resource of financing.
• Review the resource within Topic 3: Principles and Practices Board Sample 501c(3) Hospital Charity Care and Financial Assistance Policy and Procedures (Links to an external site.). (HFMA, n.d.)
• Prepare information for an 8-10 slide PowerPoint presentation, with voiceover. Assume fictional information to develop your content. Address the following points in your presentation:
• Why ABC Hospital needs and uses charity care
• Patient demographics and percent of hospital patient population receiving charity care in the last fiscal year (fictional data).
• Define the issues that have contributed to poor management of the charity care provision.
• Propose a new way to move forward, providing effective care to patients, utilizing charity care properly. What is different about this approach, then what was happening previously?
• Using bullet points, clearly define a minimum of three benefits of your plan for moving forward. These benefits should be focused on the financial health of ABC hospital, while balancing the needs of your patient population. These points will be the cornerstone for future development of a policy on charity care.
Additional Assignment Resource(s) (please use three references at least
Healthcare Financial Management Association. (n.d.) Principles and Practices Board Sample 501c(3) Hospital Charity Care and Financial Assistance Policy and Procedures. https://www.hfma.org/content/dam/hfma/document/policies_practices/PDF/62649.pdf
Why ABC Hospital needs and uses charity care
- Charity care – Free or discounted healthcare services provided by hospitals to those who cannot afford to pay for their medical services. It covers necessary healthcare services and emergency medical services.
- It is a requirement under the Affordable Care Act for not-for-profit hospitals to provide charity care for them to maintain their status as a not-for-profit under the internal revenue service (Zare et al., 2021).
Patient demographics and percent of hospital patient population receiving charity care
- Over the last fiscal year, charity care accounted for;
- 2% of the total hospital revenue
- The hospital spent $43 million on charity care
- 8% of the patient population in the hospital used charity care
- Patient demographics:
- The beneficiaries’ income was less than 300% of the federal poverty level.
- The majority of the beneficiaries are unemployed.
- Most applicants had lower levels of education, less than high school.
- The beneficiaries lacked health insurance
- The average age ranged from 20 to 60 years.
- Total assets for individuals using charity care were $8900.
Issues that have contributed to poor management
- Lack of charity care policy in the facility has contributed to the poor management of charity care.
- Poor accountability from the hospital staff members
- Lack of clearly defined application process for charity.
- Undefined eligibility criteria for applicants by the hospital (Bruch & Bellamy, 2020).
Propose a new way to move forward
- Develop a hospital policy that will regulate and guide charity care coordination
- It will define;
- The eligibility criteria and the application process.
- Assign responsibility to different individuals for efficient coordination.
- Determine services to be provided under charity care
- Set the minimum amount that charity care beneficiaries will need to pay for the services received.
- The new approach will provide clear procedures which will serve to eliminate confusion and frustration among the care providers and the patients (Bai et al., 2021).
Benefits of your plan for moving forward
- Increased accountability from the care providers and those involved in charity care coordination.
- Improved decision-making as the eligibility and application will be clearly defined.
- Faster application and approval process – the policy will outline the requirement for charity care qualification, minimizing confusion and delays when determining those who qualify (Bai et al., 2021).
Bai, G., Zare, H., Eisenberg, M. D., Polsky, D., & Anderson, G. F. (2021). Comparison of Trends in Nonprofit Hospitals’ Charity Care Eligibility Policies Between Medicaid Expansion States and Medicaid Nonexpansion States. Medical Care Research and Review, 10775587211039695. https://journals.sagepub.com/doi/abs/10.1177/10775587211039695
Bruch, J. D., & Bellamy, D. (2020). Charity Care: Do Nonprofit Hospitals Give More than For-Profit Hospitals?. Journal of General Internal Medicine, 1-2. https://link.springer.com/article/10.1007/s11606-020-06147-70e4584a-cf3c-42a7-9aba-a035e3123208&code=c83b5b25-0929-44a1-940f-43d36784949a
Zare, H., Eisenberg, M., & Anderson, G. (2021). Charity care and community benefit in non-profit hospitals: definition and requirements. INQUIRY: The Journal of Health Care Organization, Provision, and Financing, 58, 00469580211028180. https://journals.sagepub.com/doi/full/10.1177/00469580211028180