Alabama Administrative Code
Title 410 - STATE HEALTH PLANNING AND DEVELOPMENT AGENCY
Chapter 410-2-2 - HEALTH PRIORITIES
Section 410-2-2-.06 - Health Care For The Medically Indigent
Universal Citation: AL Admin Code R 410-2-2-.06
Current through Register Vol. 43, No. 02, November 27, 2024
(1) The Problem
(a) There have been studies and estimates to
determine the number of medically uninsured and underinsured, both in Alabama
and nationally. Although the statistics may vary among the various studies, the
conclusions are all consistent in that a large percentage of the population has
either no health insurance coverage or the coverage is inadequate. According to
the July 2018 U.S. Census Bureau's Quick Fact Sheet on Alabama, the uninsured
population under age 65 is 12.0% of the total population of 4,887,871. Most of
the uninsured were found in families where at least one person is employed, and
most of the employed worked in small businesses. In 2010, the Congress passed
the Patient Protection and Affordable Care Act, which ensured coverage for
pre-existing conditions and dependent coverage under a parent's policy through
age 25, which reduced the number of uninsured.
(b) Lack of health insurance coverage,
including mental health coverage, contributes significantly to uncompensated
care provided by those who deliver needed health care. The uninsured and
underinsured often fail to seek needed health care services early when
treatment is generally less expensive and more effective. The financial impact
of the uninsured in Alabama is shown by 2018 data compiled by the Alabama
Medicaid Agency. Total uncompensated care in Alabama was estimated to be $712
million. This number represents the total cost of care for charity care and bad
debt, as defined by Medicare, as reported on Medicare Cost Reports filed by the
ninety (90) acute care hospitals in Alabama with Medicare, a copy of which is
also filed annually with the Alabama Medicaid Agency. This number, however,
only reflects the cost for hospital care (not charges) and does not include
other uncompensated health care costs from other providers including: Community
Mental Health Centers, Psychiatric Hospitals, Nursing Homes, clinics operated
by the Alabama Department of Public Health, Federally Qualified Health Clinics
(FQHCs), Residential Treatment Facilities, and others. Also, according to the
Alabama Medicaid Agency, Medicaid is required to provide to the Centers for
Medicare and Medicaid Services (CMS) an audit of uncompensated care, called a
DSH (Disproportionate Share Hospital) audit. This audit is used to justify DSH
payments from the Federal Government which are used to reimburse hospitals for
uncompensated care provided to uninsured patients. The definitions for
uncompensated care in this instance are different than those used in the
Medicare Cost Reports, but is the amount that Medicaid is accountable for with
respect to uncompensated care. Utilizing this measure, the total Uninsured
Uncompensated care hospital cost included in the audit for Fiscal Year 2015 was
$510 million. Based upon this audit, hospitals in Alabama did receive a Federal
DSH allotment of $333 million to partially offset the cost. Without
Congressional action, however, reductions amounting to approximately forty
percent (40%) of the Federal DSH allotments are required to take place in
Fiscal Year 2020. According to Medicaid, current expectations are that these
scheduled reductions will be deferred for one or two years.
(c) Providers should pursue collections based
upon economic-means based policies in order to recover part of the cost of
uncompensated care, and according to generally accepted standards. Bad debt is
an increasing problem for Alabama providers.
(d) Bad debt is the unpaid charges/rates for
services rendered from a patient and/or third-party payer, for which the
provider reasonably expected payment.
(e) Charity care is defined as health
services for which a provider's policies determine a patient is unable to pay.
Charity care could result from a provider's policies to provide health care
services free of charge to individuals who meet certain pre-established
criteria as required by the 2010 Patient Protection and Affordable Care Act.
Charity care is measured as revenue forgone, at full-established rates or
charges. Charity care would not include contractual write-offs, but could
include partial write-offs for persons unable to pay the full amount of a
particular patient's bill.
(f)
Uncompensated care is the combination of charity care and bad debt.
(g) Each county is responsible for indigent
residents.
1. Article 7 Title 21 - Hospital
Service Program for Indigents (§
22-21-210), et seq.
2. Article 10 Title 21 - Financial
Responsibility for Indigent Healthcare (§
22-21-290), et seq.
(2) Recommendations
(a) The SHPDA should work with other state
agencies to develop a database to determine the nature and extent of
uncompensated care in Alabama and to monitor changes in the level of
uncompensated care over time.
(b)
The State is examining ways to encourage provision of medical insurance through
employers and ways to more effectively utilize public funding
sources.
(c) The State is examining
establishment of a risk pool for small employers and for individuals who lose
employer-provided insurance.
(d)
The Statewide Health Coordinating Council believes that access to care, which
is mandated as a part of the Certificate of Need (CON) Review process shall
include the historical and projected charity care provided by each CON
applicant and the impact each CON approval will have on access to health care
for the medically indigent.
(e)
Counties are encouraged to provide adequate resources to fulfill obligations in
accordance with the following state statutes:
1. Article 7 Title 21 known as Hospital
Service Program for Indigents (§
22-21-210), et seq.
2. Article 10 Title 21 Financial
Responsibility for Indigent Healthcare (§
22-21-290), et seq.
Author: Statewide Health Coordinating Council (SHCC)
Statutory Authority: Code of Ala. 1975, § 22-21-260(4).
Disclaimer: These regulations may not be the most recent version. Alabama may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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