BAD DEBT: Public Assistance Makes Much Debt Avoidable
Many Massachusetts hospitals are racking up bad debt unnecessarily, according to a recent study in Health Affairs. In an analysis of more than 350,000 medical claims filed by indigent patients, the authors found that most recipients of hospital-funded treatment were actually eligible for Medicaid funding, for which hospitals are entitled to compensation. Such a finding is good news for Massachusetts hospitals, which racked up a total of $355 million in bad debt last year. Said co-author Katherine London, a policy specialist at the Massachusetts Division of Health Care Finance and Policy, "We were shocked by the results." Massachusetts Hospital Association spokesperson Andrew Dreyfus said, "This study shows that a lot of what's written off as bad debt is really free care" for which hospitals should be reimbursed (Saltus, Boston Globe, 7/13). Entitled "Income Levels of Bad-Debt and Free-Care Patients in Massachusetts Hospitals," the study was originally commissioned by Massachusetts legislators who were concerned "that many patients whose expenses are written off to bad debt are able to pay their bills." To the contrary, the authors found that the majority of non-payers were genuinely of low means and that most were not appropriately registered on Medicaid rolls. The findings have "direct financial implications" both for Massachusetts hospitals and for low-income patients who are not "tak[ing] advantage of expanded government-based coverage, such as Medicaid" (Health Affairs, July/August 1999 issue).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.