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United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, charity care is
health care Health care, or healthcare, is the improvement or maintenance of health via the preventive healthcare, prevention, diagnosis, therapy, treatment, wikt:amelioration, amelioration or cure of disease, illness, injury, and other disability, physic ...
provided for free or at reduced prices to low income patients. The percentage of doctors providing charity care dropped from 76% in 1996–97 to 68% in 2004–2005. Potential reasons for the decline include changes in physician practice patterns and increasing financial pressures. In 2006,
Senate A senate is a deliberative assembly, often the upper house or chamber of a bicameral legislature. The name comes from the ancient Roman Senate (Latin: ''Senatus''), so-called as an assembly of the senior (Latin: ''senex'' meaning "the el ...
investigators found that many
hospital A hospital is a healthcare institution providing patient treatment with specialized Medical Science, health science and auxiliary healthcare staff and medical equipment. The best-known type of hospital is the general hospital, which typically ...
s did not inform patients that charity care was available. Some for-profit hospitals provided as much charity care as some non-profit hospitals. Investigators also found non-profit hospitals charging poor, uninsured patients more than they did patients with
health insurance Health insurance or medical insurance (also known as medical aid in South Africa) is a type of insurance that covers the whole or a part of the risk of a person incurring medical expenses. As with other types of insurance, risk is shared among ma ...
. Hospitals must provide some charity care if they wish to maintain non-profit status. One estimate put the cost of uncompensated care for 2004 at $41 billion, of which $34.6 billion was funded through a patchwork of government programs. Over half of all government reimbursement for uncompensated care comes from the federal government; most of that is provided through Medicare and
Medicaid Medicaid is a government program in the United States that provides health insurance for adults and children with limited income and resources. The program is partially funded and primarily managed by U.S. state, state governments, which also h ...
. These federal funds are a primary source of support for health care providers that serve the uninsured. Increasing demand for free and low-cost health care services by uninsured patients and
Medicaid Medicaid is a government program in the United States that provides health insurance for adults and children with limited income and resources. The program is partially funded and primarily managed by U.S. state, state governments, which also h ...
beneficiaries is, along with increased competition, placing a growing financial strain on safety-net health care providers. Some safety-net providers are responding by trying to limit their charity care exposure and attract more paying customers.


State reimbursement for charity care

The state of
New Jersey New Jersey is a U.S. state, state located in both the Mid-Atlantic States, Mid-Atlantic and Northeastern United States, Northeastern regions of the United States. Located at the geographic hub of the urban area, heavily urbanized Northeas ...
has a program to provide reimbursements to hospitals and other health care institutions which provide uncompensated or under-compensated health care to patients lacking private health insurance whose income falls below a certain amount but is too high to qualify them for
Medicaid Medicaid is a government program in the United States that provides health insurance for adults and children with limited income and resources. The program is partially funded and primarily managed by U.S. state, state governments, which also h ...
and are not old enough to be eligible for Medicare (New Jersey's situation is somewhat unusual among American states in that the state has no county or municipal hospitals). The scheme provides free health care to uninsured state residents whose income is up to 200% of the federally designated
poverty line The poverty threshold, poverty limit, poverty line, or breadline is the minimum level of income deemed adequate in a particular country. The poverty line is usually calculated by estimating the total cost of one year's worth of necessities for ...
, and provides discounts which gradually phase out at incomes between 200% and 300% of the poverty line; the patient's liquid assets (not including the patient's home and one automobile) must not exceed $7,500. Also, the maximum any individual qualifying for aid under the aforementioned criteria can be liable for in a single year is 30% of that patient's gross income for that year. A special fund was designed to compensate the health care provider—which may have furnished either inpatient or outpatient services—for the applicable difference in cost. However, New Jersey hospitals are reimbursed for charity care at below their cost to provide these services, which helps account for the fact that in the past two years, nine hospitals have closed in the state and six others have filed for bankruptcy, according to the New Jersey Hospital Association. Some private health care providers in other states—particularly those that are operated on a
nonprofit A nonprofit organization (NPO), also known as a nonbusiness entity, nonprofit institution, not-for-profit organization, or simply a nonprofit, is a non-governmental (private) legal entity organized and operated for a collective, public, or so ...
basis (often by religious entities)—also provide free and/or low-cost health care to uninsured patients, using income thresholds similar to those observed statewide in New Jersey; but state laws vary widely as to how much, if any, reimbursement (usually in the form of tax credits) the institution receives for so doing (and in only one other state besides New Jersey— Washington—does an outright mandate exist to provide charity care). Perhaps the most famous example of such an institution was the Charity Hospital of
New Orleans New Orleans (commonly known as NOLA or The Big Easy among other nicknames) is a Consolidated city-county, consolidated city-parish located along the Mississippi River in the U.S. state of Louisiana. With a population of 383,997 at the 2020 ...
, founded in 1732 and now run by the Medical Center of Louisiana, now closed due to damage from
Hurricane Katrina Hurricane Katrina was a powerful, devastating and historic tropical cyclone that caused 1,392 fatalities and damages estimated at $125 billion in late August 2005, particularly in the city of New Orleans and its surrounding area. ...
. In 2007 the community hospitals in Washington State agreed to uniform standards for providing free and reduced cost care to low-income individuals. The new standards were less generous than existing practice for four out of ten community hospitals, but is stronger than existing state law. Care is free for families with incomes below the federal poverty level. Between one and two times the federal poverty level patients may buy care at cost; between two and three times the federal poverty level uninsured patients are charged no more than what an average insured patient would pay.Kyung M. Song
"Standards set for charity care,"
The Seattle Times, January 11, 2007


See also

* Charge description master


References

{{reflist


External links


"Charity Care - New Jersey Hospital Care Payment Assistance Program"
from the New Jersey Department of Health and Senior Services website (accessed June 16, 2008)

from the Wisconsin Department of Health and Family Services website (accessed June 16, 2008)
Dollar For
an organization helping patients learn about charity care policies and apply for relief Healthcare in the United States