RACINE COUNTY — Hospitals across Wisconsin saw a nearly 30 percent drop in the amount of uncompensated or unpaid care provided to patients in fiscal year 2015, according to a recent report by the Wisconsin Hospital Association.
The 2015 decrease marks a 40 percent drop in such losses since fiscal year 2013 — the last year Americans could forgo health insurance coverage without facing a fine under the Affordable Care Act.
In Racine County the decrease was even greater, with Ascension All Saints Hospital seeing a 40 percent drop in uncompensated care charges between 2014 and 2015. Aurora Memorial Hospital of Burlington saw such charges drop by 15 percent in 2015.
The WHA, which tracks uncompensated care at Wisconsin hospitals credits at least part of the dip with the increased health care coverage ushered in the by the ACA.
Sometimes called Obamacare, the ACA has made it a requirement that all Americans secure health insurance either by purchasing it on the open marketplace, or through Medicaid if they meet income guidelines.
But with that increase in health care coverage has come growing Medicare and Medicaid losses, the WHA has reported.
Debt and charity
In the world of hospital billing, uncompensated care is a large umbrella that includes services provided by hospitals that either aren’t paid for by the consumer or can’t be billed to private insurance, Medicaid or Medicare. Uncompensated care often falls into two categories: charity care and bad debt.
Charity care is when hospitals will cover the costs of uninsured, low-income individuals who can’t afford to pay their hospital bills. Bad debt is when those unpaid bills just don’t get paid or go to collections.
According to the WHA report, Ascension All Saints incurred about $15.7 million in charity care costs in fiscal year 2015, compared with $28.8 million in fiscal year 2014. That’s a drop of about 45 percent. The hospital’s charges for bad debt dropped by 31 percent from $17.6 million in 2014 to roughly $12 million in 2015.
Ascension tracks such expenses in terms of cost — what it cost the hospital to provide the care, not what the services were billed at. It reports that its charity care costs dropped by 34 percent from $13.8 million in 2014 to $10.3 million in 2015.
According to the WHA report, Aurora Memorial Hospital of Burlington saw its charity care charges drop by 49 percent from $4.5 million in 2014 to $2.3 million in 2015. The hospital’s bad debt, on the other hand, more than doubled, according to the report, increasing to $2.08 million in 2015 from $711,201 in 2014.
In terms of costs, the hospital reported $635,000 in charity costs in 2015 — a 94 percent drop over 2014’s charity care costs of $1.3 million. The hospital’s report did not includes costs for bad debt.
Medicaid and Medicare
Increased health insurance coverage among patients may be helping All Saints and Burlington Memorial to reduce charity care costs, but those savings have come along at a time when the hospitals, and others like them across the state, have been experiencing continued Medicaid and Medicare losses.
“Wisconsin Medicaid provider reimbursement still remains one of the lowest in the country, paying on average 65 cents on the dollar toward the cost of care,” said Mary Kay Grasmick, vice president of communications for the Wisconsin Hospital Association. “In 2015, Medicare losses were $1.64 Billion, $160 million higher for Wisconsin hospitals than in 2014. Hospitals across the nation faced Medicare payment cuts under the Affordable Care Act.”
All Saints saw Medicare losses for in-patient care increase by 4.5 percent in 2015 to $8.8 million, according to data provided by Ascension, but saw its Medicaid losses for in-patient care drop by 40 from $13.7 million in 2014 to $8.1 million in 2015.
At Aurora in Burlington, Medicaid loses increased by 16 percent in 2015 to just over $6 million, according to the hospital’s Community Benefit Report. The report did not include information about Medicare losses.
“Charity care is one component of uncompensated care, and while that has gone down in recent years, it has been increasing in 2016,” said Rachel Roller, Aurora’s senior vice president for community and government relations. “Meanwhile, we’ve seen significant increases in … Medicaid shortfalls.”
Asked what improvements Ascension might make to the ACA should Congress or the incoming administration of President-elect Donald J. Trump seek the provider’s input, Anthony Tersigni, president and chief executive officer of Ascension, had this to say:
“We look forward to working with the new administration and Congress to continue to transform our health care system, with a special focus on those living in poverty and (the) most vulnerable in our society. It’s our hope that, with the election behind us, our newly elected leaders in Washington will come together to ensure 100 percent access and 100 percent affordable coverage for every American.”