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

Current through Register Vol. 42, No. 9, June 28, 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.