Delaware Health Resources Board
Charity Care Task Force

January 2006

Delaware Health Resources Board
Charity Care Task Force
January 26, 2006
1:00 p.m. – 2:30 p.m.
Delaware Technical & Community College
Terry Campus Conference Center, Rooms 407A&B
Dover, Delaware

1. Call to Order
2. December 15, 2005 Meeting Summary
3. Developing the Framework for a Charity Care Policy
4. Other Business
5. Next Steps
6. Adjourn

Minutes

Charity Care Task Force Meeting
January 26, 2006
1:00 p.m. – 2:30 p.m.

Attendance

Call to Order

Meeting was called to order by Phyllis Sheppard at 1:15 p.m.

Approval of Minutes

December 15, 2005 Meeting Summary – Joann Hasse made a motion to adopt minutes. Bernard Ableman seconded. The motion carried by voice vote.

Developing the Framework for a Charity Care Policy

Phyllis Sheppard framed this agenda item as an activity to develop a “wish list” for the contents of a charity care policy for freestanding surgery centers. She suggested the policy discussion be separate from the charity care enforcement discussion.

Existing and Previously Recommended Policies

It was noted that a charity care policy does currently exist. It reads:

1. CPR Charity Care Condition
   
   (Currently in place for Freestanding Surgery Centers as a condition of Certificate of Public Review)
   
   That the applicant develop a charity care policy setting forth criteria for identifying patients who will receive care without charge or at a reduced charge and for whom collection efforts will not be made. The applicant shall maintain records to measure the amount of charges forgone under this charity care policy. Charity care shall not include bad debts or charge reductions resulting from contracts with third party payors. Within 180 days after the end of each fiscal year, a certified public accountant shall submit a report to the Delaware Health Resources Board showing the applicant’s total gross charges and the amount of charges forgone under the charity care policy. If the amount of charges forgone is less than 2.75 percent of total gross charges, the applicant shall be responsible for making up such deficit in the following year and shall submit to the Board its plan for increasing the level of charity care provided. Likewise, if the amount of charges forgone is more than 2.75 percent of total gross charges, such excess shall be credited towards the following year’s obligation.
2. Beebe Charity Care Policy
   
   At the last meeting, Wallace Hudson, Beebe Medical Center, supplied the board with Beebe Medical Center’s Charity and Financial Aid Policy. A copy of Beebe’s policy is included in the February 23 meeting packet.In general, to qualify individuals must be uninsured and have incomes below 400% FPL. Those with incomes between 100 % and 200% FPL are provided service at no charge. A graduated sliding fee scale if applied to charges for individuals with incomes between 200% FPL and 400% FPL. (Note:  Legal citizens with incomes below 100% FPL are eligible for Medicaid. Undocumented residents are eligible for CHAP, which accommodates individuals up to 200% FPL.) Income calculations do not include assets.
3. Charity Care Policy Recommended by the Delaware Healthcare Association
   
   It was noted that the Board of the Delaware Healthcare Association has embraced and previously submitted to the Delaware Health Resources Board a charity care policy for freestanding ambulatory surgery centers. A copy of the Delaware Healthcare Association’s recommended policy is attached to these minutes.

Discussion/Key Points

1. Goals of a Charity Care Policy
   • To level the playing field between not-for-profit hospitals and for-profit freestanding surgery centers, and
   • To promote access to care for low-income (uninsured/underinsured) Delawareans
2. Issues/Options/Considerations
   • Adopt all or part of the Beebe charity care policy
   • Adopt all or part of the charity care policy adopted by the Delaware Health Resources Board (attached to these minutes)
   • Any policy will require implementation guidelines (operationalize)
     • For example, any facility subject to the charity care condition should be required to submit their charity care policy to the Delaware Health Resources Board and make it known to patients who present at the facility
   • Require facilities to submit to the Delaware Health Resources Board reports on charity care and bad debt (uncompensated care)
   • The charity care policy should be coordinated and complement CHAP and individual facility polices
   • Follow Medicaid rules regarding assets
   • Require ASC Medicaid utilization rate of 10% - Medicaid gross charges as a percent of total gross charges
   • Instead of a charity care policy, consider an uncompensated care policy (which includes both bad debt and charity care
3. Additional Comments
   • Eligibility for the charity care policy is prospective; some individuals will not go through the enrollment process (stigma, pride). Hospital uncompensated care provided in such cases is calculated as bad debt.
   • Under hospital accounting rules, charity is a deduction from gross revenue while bad debt is captured as an expense
   • At Bayhealth Medical, bad debt and charity care are at approximately the same level.
   • Bad debt is becoming more problematic as a result of higher health insurance deductibles/co-payments
   • Chuck Lockwood stated that some single-specialty freestanding ambulatory surgery centers cannot provide the same level of charity care as full-service hospitals because they are a single specialty facility. He added that geographic location of facilities should be taken into consideration
   • Wally Hudson suggested the need for consequences for non-compliance

Next Steps

Based on the discussion, staff will draft a new charity care policy for consideration at the next meeting.

Final Comments

Adjourn

William O’Connor made a motion to adjourn. Richard Cherrin seconded the motion. The motion passed by voice vote. The meeting adjourned at 2:45 p.m.

The next meeting is scheduled for February 23, 2006, 1:00 – 2:30 p.m., Delaware Technical & Community College, Terry Campus Conference Center, Rooms 407A & B

Delaware Healthcare Association
Recommended Charity Care Policy for Ambulatory Surgery Centers
Adopted by DHA Board, June 2004