Association of State Medicaid Expansion With Hospital Community Benefit Spending.

Importance: Medicaid expansion was widely expected to alleviate the financial stresses faced by hospitals by providing additional revenue in the form of Medicaid reimbursements from patients previously receiving uncompensated care. Among nonprofit hospitals, which receive tax-exempt status in part because of their provision of uncompensated care, Medicaid expansion could have released hospital funds toward other community benefit activities. Objective: To examine changes in nonprofit hospital spending on community benefit activities after Medicaid expansion. Design, Setting, and Participants: This cohort study used difference-in-differences analysis of 1666 US nonprofit hospitals that filed Internal Revenue Service Form 990 Schedule H detailing their community benefit expenditures between 2011 and 2017. The analysis was conducted from February to September 2019. Exposures: State Medicaid expansion between 2011 and 2017. Main Outcomes and Measures: Percentage of hospital operating expenditures attributable to charity care and subsidized care, bad debt (ie, unreimbursed spending for care of patients who did not apply for charity care), unreimbursed Medicaid spending, noncare direct community spending, and total community benefit spending. Results: Of 1478 hospitals in the sample in 2011, nearly half (653 [44.2%]) were small hospitals with fewer than 100 beds, and nearly 70% of hospitals (1023 [69.2%]) were in urban areas. Among the 1666 nonprofit hospitals, Medicaid expansion was associated with a decrease in spending on charity care and subsidized care (-0.68 [95% CI, -0.99 to -0.37] percentage points from a baseline mean [SD] of 3.6% [4.0%] of total hospital expenditures; P < .001) and in bad debt (-0.17 [95% CI, -0.32 to -0.01] percentage points). There was an increase in unreimbursed spending attributable to caring for Medicaid patients (0.85 [95% CI, 0.60 to 1.10] percentage points; P = .04), which canceled out uncompensated care savings from the expansion. Noncare direct community expenditures decreased overall (-0.24 [95% CI, -0.48 to 0.00] percentage points; P = .049). Direct community expenditures remained more stable in small hospitals (-0.07 [95% CI, -0.20 to 0.05] percentage points; P =.26) compared with large hospitals (-0.37 [95% CI, -0.86 to 0.12] percentage points; P = .14) and in nonurban hospitals (0.02 [95% CI, -0.09 to 0.14] percentage points; P = .70) compared with urban hospitals (-0.36 [95% CI, -0.73 to 0.01] percentage points; P = .06). Conclusions and Relevance: In this study, Medicaid expansion was associated with a decrease in nonprofit hospitals' burden of providing uncompensated care, but this financial relief was not redirected toward spending on other community benefits.

Charity Care Characteristics and Expenditures Among US Tax-Exempt Hospitals in 2016.

Objectives. To examine content of financial assistance polices (FAPs) among US tax-exempt hospitals and determine whether restrictive policies were associated with reduced charity care spending.Methods. Using hospital tax filings with the Internal Revenue Service in 2016 and FAPs obtained from hospital Web sites, we examined characteristics of FAPs and associated expenditures for charity care in a representative sample of 170 tax-exempt hospitals. We identified common eligibility requirements and used them to define restrictiveness of FAPs.Results. FAPs were characterized by various ways to exclude patients, a patchwork of coverage for typical health care services, and wide-ranging discounts. FAP expenditures were lowest among restrictive hospitals in states that expanded Medicaid as part of the Affordable Care Act and highest among nonrestrictive hospitals in nonexpansion states. FAP expenses did not differ by hospital restrictiveness alone.Conclusions. Standardizing common eligibility requirements among FAPs carries potential benefits with regard to optimizing charity care for community benefit and achieving at least some level of equity; however, further policy efforts must account for additional restrictions, charges, and exclusions to be effective.

Association of Nonprofit Hospitals' Charitable Activities With Unreimbursed Medicaid Care After Medicaid Expansion.

Importance: In the United States, nonprofit hospitals receive tax-exempt status with the expectation that they provide a high level of benefit to local communities. Prior work has shown that Medicaid expansion reduced hospital spending on uncompensated care. Objective: To measure the association of tax-exempt hospital spending with community benefit and changes in uncompensated care after Medicaid expansion. Design, Setting, and Participants: This cohort study was performed using a difference-in-differences analysis (ie, a pre-post treatment-control design) to estimate changes in reported charitable categories associated with Medicaid expansion. Data from Internal Revenue Service form 990, Schedule H, tax filings for 2253 tax-exempt hospitals in the United States from 2012 to 2016 were used. Data were analyzed from June to November 2019. Exposure: The proportion of the hospital's tax filing that spanned the period after Medicaid expansion. Main Outcomes and Measures: Hospital-reported spending on uncompensated care, unreimbursed Medicaid expenses, and other community benefit spending categories. Results: Across 2253 hospitals, mean (SD) uncompensated care costs between 2012 and 2016 were $4.20 million ($8.80 million) and unreimbursed Medicaid expenses were $7.60 million ($18.62 million). Compared with tax-exempt hospitals in states that did not expand Medicaid, those in states that did expand Medicaid reported mean reductions in their provision of uncompensated care of $1.11 million (95% CI, $0.35 million to $1.87 million; P < .001), representing a mean change of -2% (95% CI, -6% to 2%; P < .001). These reductions have been offset by mean reported increases in the provision of unreimbursed Medicaid expenses of $1.63 million (95% CI, $0.31 million to $2.94 million; P = .02), representing a mean increase of 2% (95% CI, 1% to 4%; P = .01). Tax-exempt hospitals in states that expanded Medicaid reported no statistically significant mean increase in spending on other community benefit activities. Conclusions and Relevance: In this study, large decreases in uncompensated care among tax-exempt hospitals associated with Medicaid expansion were not accompanied by increases in other reportable categories of community health benefit spending. Instead, they were accompanied by increased spending on unreimbursed Medicaid expenses.

Hospital detention of mothers and their infants at a large provincial hospital: a mixed-methods descriptive case study, Lubumbashi, Democratic Republic of the Congo.

BACKGROUND: The practice of detaining people who are unable to pay for health care services they have received is widespread in many parts of the world. We aimed to determine the proportion of women and their infants detained for inability to pay for services received at a provincial hospital in the Democratic Republic of the Congo during a 6-week period in 2016. A secondary objective was to determine clinical and administrative staff attitudes and practices about payment for services and detention. METHODS: This mixed-methods descriptive case study included a cross-sectional survey and interviews with key informants. RESULTS: Over half (52%) of the 85 women who were in the maternity ward at Sendwe Hospital and eligible for discharge between August 5 and September 15, 2016 were detained for 1 to 30 days for outstanding bills of United States dollars (USD) 21 to USD 515. Women who were detained were younger, poorer, and had more obstetric complications and caesarean sections than other women. In addition, over one quarter of the infants born to these women had died during delivery or in the first three days of life. Key informant interviews normalized detention as an unfortunate but inevitable consequence of patient poverty and health system resource constraints. CONCLUSIONS: Detention of women and their infants is common at this hospital in the DRC. This represents a violation of human rights and a systemic failure to ensure that all people have access to essential health services and that they not suffer financial hardship due to the price of those services.

Determinants of Community-Related Expenses of US Tax-Exempt Hospitals, 2013.

CONTEXT: Tax-exempt hospitals in the United States are required to report community benefit expenses on their federal tax forms. Two categories of expenses critical to the public health mission of hospitals are the "community health improvement" and "community-building" expense categories. The community health improvement expenses formally qualify as a community benefit, whereas community-building expenses do not. Increasing both types of spending would be consistent with the growing evidence on the effects of social determinants on population health. OBJECTIVE: To identify characteristics associated with the level of community health improvement and community-building expenses reported by tax-exempt hospitals. DESIGN: The general acute care hospital is the unit of analysis. We utilize secondary data for all US general acute care hospitals that filed their own Internal Revenue Service Form 990 Schedule H for 2013 (n = 1508). We apply linear regression analysis to an explanatory model with 8 independent variables. MEASURES: The primary dependent variables are percentage of operating expenses devoted to community health improvement and to community building. The independent variables include 4 hospital-level measures, 3 county-level measures, and a measure of state requirements for community benefit. RESULTS: The level of community health improvement expenses is positively associated with bed size, system membership, profit margin, and urban location. In states where tax-exempt hospitals are required to demonstrate community benefit to the state, there is lower community health improvement spending. Teaching hospitals also demonstrate lower community health improvement spending. Results for community-building expenses mirror those for community health improvement except that teaching hospital status and per capita income lose significance and hospital competition gains significance in the negative direction. CONCLUSIONS: Leaders among tax-exempt hospitals in community-related spending are hospitals that are larger, more profitable, members of systems, and located in urban areas and in states that do not have community benefit requirements.

State Laws and Nonprofit Hospital Community Benefit Spending.

OBJECTIVE: To determine the association of state laws on nonprofit hospital community benefit spending. DESIGN: We used multivariate models to estimate the association between different types of state-level community benefit laws and nonprofit hospital community benefit spending from tax filings. SETTING: All 50 US states. PARTICIPANTS: A total of 2421 nonprofit short-term acute care hospital organizations that filled an internal revenue service Form 990 and Schedule H for calendar during years 2009-2015. RESULTS: Between 2009 and 2015, short-term acute care hospitals spent an average of $46 billion per year in total, or $20 million per hospital on community benefit activities. Exposure to a state-level community benefit law of any type was associated with an $8.42 (95% confidence interval: 1.20-15.64) per $1000 of total operating expense greater community benefit spending. Spending amounts and patterns varied on the basis of the type of community benefit law and hospital urbanicity. CONCLUSIONS: State laws are associated with nonprofit hospital community benefit spending. Policy makers can use community benefit laws to increase nonprofit hospital engagement with public health.

Impact of ACA Medicaid Expansion on Hospitals' Financial Status.

EXECUTIVE SUMMARY: The Patient Protection and Affordable Care Act's insurance reforms were expected to have significant and positive implications for hospital finances. In particular, state expansion of Medicaid programs held the promise of reducing hospitals' uncompensated care costs as a result of expanding health insurance to many previously uninsured individuals. Recent research indicates that in the early phases of Medicaid expansion, many hospitals did experience a substantial decline in uncompensated care costs. However, studies to date have not considered whether Medicaid expansion resulted in payment shortfalls that offset some of what hospitals saved from lower uncompensated care costs. We examined filings submitted by hospitals to the Internal Revenue Service (IRS)-one of the few publicly available sources of national data on both uncompensated care costs and Medicaid payment shortfalls. We also compared changes in uncompensated care costs and Medicaid payment shortfalls for hospitals in expansion states with those in nonexpansion states. Our findings indicate that state expansion of Medicaid led to substantial reductions in hospitals' uncompensated care costs, but the savings were offset somewhat by increased Medicaid payment shortfalls. Therefore, studies that focus only on reductions in uncompensated care costs can overstate the benefits of Medicaid expansion on hospitals finances.

Increased health information technology investment decreases uncompensated care cost: A study of Texas hospitals.

BACKGROUND: Many previous research studies have demonstrated that investing in health information technology (IT) in a hospital setting has potential benefits, including eliminating duplicate or unnecessary tests and adverse drug events, conserving healthcare provider time and effort by making information more readily available, and reducing cost by increasing efficiency or productivity metrics. However, the effect of health IT on uncompensated care has not been reported yet. OBJECTIVE: The objective of this study was to examine the effect of health IT investment on uncompensated care provided by hospitals. METHODS: The general linear model (GLM) with log link and normal distribution was used to estimate the association between health IT spending and the provision of uncompensated care using Texas American Hospital Association (AHA) data from 2004 to 2010. RESULTS: The total health IT investment was significantly and negatively associated with the provision of uncompensated care. When health IT investment was increased by 10%, the provision of uncompensated care was reduced by 2.7%. Health IT investment was also significantly and negatively associated with bad debt. When health IT investment was increased by 10%, bad debt was decreased by 3.2%. CONCLUSION: Health IT investment was negatively associated with the provision of uncompensated care. This means that health IT could reduce administrative burden and improve efficiency of tracking patient insurance status and billings.

Comparing the Value of Nonprofit Hospitals' Tax Exemption to Their Community Benefits.

The tax-exempt status of nonprofit hospitals has received increased attention from policymakers interested in examining the value they provide instead of paying taxes. We use 2012 data from the Internal Revenue Service (IRS) Form 990, Centers for Medicare and Medicaid Services (CMS) Hospital Cost Reports, and American Hospital Association's (AHA) Annual Survey to compare the value of community benefits with the tax exemption. We contrast nonprofit's total community benefits to what for-profits provide and distinguish between charity and other community benefits. We find that the value of the tax exemption averages 5.9% of total expenses, while total community benefits average 7.6% of expenses, incremental nonprofit community benefits beyond those provided by for-profits average 5.7% of expenses, and incremental charity alone average 1.7% of expenses. The incremental community benefit exceeds the tax exemption for only 62% of nonprofits. Policymakers should be aware that the tax exemption is a rather blunt instrument, with many nonprofits benefiting greatly from it while providing relatively few community benefits.

Community Benefit Spending By Tax-Exempt Hospitals Changed Little After ACA.

Provisions of the Affordable Care Act (ACA) encouraged tax-exempt hospitals to invest broadly in community health benefits. Four years after the ACA's enactment, hospitals had increased their average spending for all community benefits by 0.5 percentage point, from 7.6 percent of their operating expenses in 2010 to 8.1 percent in 2014.

Comparing the Affordable Care Act's Financial Impact on Safety-Net Hospitals in States That Expanded Medicaid and Those That Did Not.

Issue: Safety-net hospitals play a vital role in delivering health care to Medicaid enrollees, the uninsured, and other vulnerable patients. By reducing the number of uninsured Americans, the Affordable Care Act (ACA) was also expected to lower these hospitals' significant uncompensated care costs and shore up their financial stability. Goal: To examine how the ACA's Medicaid expansion affected the financial status of safety-net hospitals in states that expanded Medicaid and in states that did not. Methods: Using Medicare hospital cost reports for federal fiscal years 2012 and 2015, the authors compared changes in Medicaid inpatient days as a percentage of total inpatient days, Medicaid revenues as a percentage of total net patient revenues, uncompensated care costs as a percentage of total operating costs, and hospital operating margins. Findings and Conclusions: Medicaid expansion had a significant, favorable financial impact on safety-net hospitals. From 2012 to 2015, safety-net hospitals in expansion states, compared to those in nonexpansion states, experienced larger increases in Medicaid inpatient days and Medicaid revenues as well as reduced uncompensated care costs. These changes improved operating margins for safety-net hospitals in expansion states. Margins for safety-net hospitals in nonexpansion states, meanwhile, declined.

The Impact of the ACA's Medicaid Expansion on Hospitals' Uncompensated Care Burden and the Potential Effects of Repeal.

ISSUE: By increasing health insurance coverage, the Affordable Care Act's Medicaid eligibility expansion was also expected to lessen the uncompensated care burden on hospitals. The expansion currently faces an uncertain future. GOAL: To compare the change in hospitals' uncompensated care burden in the 31 states (plus the District of Columbia) that chose to expand Medicaid to the changes in states that did not, and to estimate how these expenses would be affected by repeal or further expansion. METHODS: Analysis of uncompensated care data from Medicare Hospital Cost Reports from 2011 to 2015. FINDINGS AND CONCLUSIONS: Uncompensated care burdens fell sharply in expansion states between 2013 and 2015, from 3.9 percent to 2.3 percent of operating costs. Estimated savings across all hospitals in Medicaid expansion states totaled $6.2 billion. The largest reductions in uncompensated care were found for hospitals in expansion states that care for the highest proportion of low-income and uninsured patients. Legislation that scales back or eliminates Medicaid expansion is likely to expose these safety-net hospitals to large cost increases. Conversely, if the 19 states that chose not to expand Medicaid were to adopt expansion, their uncompensated care costs also would decrease by an estimated $6.2 billion.

Medicaid Program; Disproportionate Share Hospital Payments--Treatment of Third Party Payers in Calculating Uncompensated Care Costs. Final rule.

This final rule addresses the hospital-specific limitation on Medicaid disproportionate share hospital (DSH) payments under section 1923(g)(1)(A) of the Social Security Act (Act), and the application of such limitation in the annual DSH audits required under section 1923(j) of the Act, by clarifying that the hospital-specific DSH limit is based only on uncompensated care costs. Specifically, this rule makes explicit in the text of the regulation, an existing interpretation that uncompensated care costs include only those costs for Medicaid eligible individuals that remain after accounting for payments made to hospitals by or on behalf of Medicaid eligible individuals, including Medicare and other third party payments that compensate the hospitals for care furnished to such individuals. As a result, the hospital-specific limit calculation will reflect only the costs for Medicaid eligible individuals for which the hospital has not received payment from any source.