In our Feb. 2 cover story (p. 6), reporter Patrick Reilly wrote about efforts by the American Hospital Association to improve the public perception of the nation's hospitals. Those efforts-which the AHA says are not part of any premeditated or coordinated image campaign-include a new logo for the association itself, a study on patients' return on investment on spending on hospital services and a seven-step platform to improve the nation's healthcare delivery system. All of this builds on a series of reports and studies that the AHA and the Federation of American Hospitals released last year that blamed patient demand, labor costs and rising health insurance premiums for escalating healthcare spending.
We understand that trade associations try to point the finger at someone else when problems pop up. It's what trade associations do while they quietly try to get their members to shape up. The problem is, the associations often don't get much help from their constituencies, whose continued bad behavior undermines the rhetoric from their paid lobbyists.
Let's look a little closer at one area where hospitals' behavior has been called into question: billing uninsured patients full charges for hospital care and hospitals using hardball debt-collection tactics. In a white paper released last December, the AHA pinned the matter largely on Medicare, saying the program's complex billing rules and regulations force hospitals to engage in behavior that they otherwise would avoid. Hospitals say discounting charges to the poor might place them on the wrong side of the kickback provisions of the Medicare fraud statutes. Those provisions bar any form of remuneration to induce patient referrals. And they say Medicare requires them to make every effort and exhaust all means possible to collect on overdue bills before Medicare will reimburse them for the program's share of bad debt.
Interestingly, none of this would have come to a head and the practices presumably would have continued if patients' rights groups, unions and the media hadn't exposed what has been going on for years. Now, suddenly, as reporter Cinda Becker disclosed in our Feb. 9 issue (p. 8), state hospital associations are tripping over themselves to release guidelines for members on ethical billing and collection practices. The AHA, as reporter Mark Taylor disclosed, is meeting with HHS' inspector general's office presumably to create a safe harbor for hospitals to discount care to the poor without violating the kickback laws. Faced with the real possibility of federal regulation of their billing practices, a massive self-policing effort is under way. It's reminiscent of the self-policing effort orchestrated by the American Association of Health Plans a few years ago when its HMO members were faced with proposed federal patients' rights legislation. That legislation, once one of the hottest topics around, died, and managed-care plans continue to set their own rules on enrollee appeal rights.
Why didn't the AHA, state hospital associations or even hospitals themselves fix this problem long ago? Realistically, HHS would not suspend or exclude a hospital from Medicare and Medicaid for discounting an uninsured person's bill. HHS would not deny a hospital its share of bad debt after a hospital made a reasonable and documented effort to collect on an unpaid bill.
If a hospital has any question about whether what it was about to do would break federal law, all it has to do is ask HHS' inspector general's office for an advisory opinion. Feb. 21 marks the seven-year anniversary of HHS' advisory opinion program in which providers can ask Medicare's top lawyers whether a proposed business transaction would break any Medicare laws, and the lawyers tell them yes or no. To the best of our knowledge, no hospital has ever asked Medicare for an advisory opinion on whether they could discount a poor patient's bill.
No. 2 on the AHA's list of Seven Steps to a Healthier America says, "No American should become impoverished due to a major illness or injury." The real challenge for the AHA and state hospital associations is getting patients, state lawmakers and federal legislators to take them seriously.