HHS' inspector general's office cleared the way for a children's hospital network to begin billing private and public insurers for the first time. The unnamed specialty hospital network, which was established by a fraternal organization and opened its first hospital during the early 1900s, sought an advisory opinion on its proposals to bill insurers (PDF) and waive patients' payments, and subsidize housing and transportation for financially needy patients.
Children's hospital network could bill insurers, inspector general says
Shriners Hospitals for Children, a Tampa, Fla.-based system founded by a fraternal order, opened the first of its 20 hospitals in 1922. The system, which does not charge patients for medical care, has struggled financially in recent years and considered closing six hospitals in 2009.
At deadline, Shriners Hospitals’ did not respond to requests to confirm the system as the opinion’s unnamed network; the inspector general’s office said the unnamed network could be forced to close hospitals without insurance revenue because of financial challenges. The system’s endowment fund suffered “significant recent losses” as the fraternal order has lost members and medical costs climb, the inspector said. For the year that ended in December 2008, the most recent publicly available, the Shriners Hospitals lost $575 million on revenue of $42.6 million after its investment income plunged.
The advisory opinion said no action would be taken under the federal anti-kickback statute against the proposed plan to waive cost-sharing for insured patients. The plan “represents a singular vestige of the requestors’ founding and continuing charitable mission,” the opinion said. “This institutional history merits deference” inappropriate for other institutions. Few of the hospitals’ patients are eligible for Medicaid or Tricare, and Medicaid generally does not require cost-sharing for those younger than age 18, the inspector general’s office continued, listing other reasons the plan would not result in sanctions, including hospitals would not claim waived amounts as bad debt or seek to offset the losses from insurers.
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