Tenet Healthcare To Begin Program To Provide Discounts to Uninsured Patients
California-based Tenet Healthcare on Tuesday announced that next month it will begin implementing a program to offer "major discounts to all uninsured patients using its hospitals" at the beginning of April, the Miami Herald reports (Dorschner, Miami Herald, 3/3). Tenet, the nation's second-largest for-profit hospital chain, agreed to the discounting program in January 2003 as part of a settlement with Consejo de Latinos Unidos, a Los Angeles-based consumer group that had campaigned for a change in Tenet's policies for charging the uninsured. Tenet delayed implementation of the discounts until company leaders were sure that the program would not jeopardize Tenet's participation in Medicare (Girion, Los Angeles Times, 3/3). The decision by Tenet follows a statement by HHS Secretary Tommy Thompson last month that federal regulations do not prevent hospitals from offering discounts to uninsured patients. In a letter sent to Thompson in December, the American Hospital Association asked HHS to change or clarify pricing schedule rules so that hospitals can give discounts to uninsured patients without worrying about violating Medicare rules. According to hospitals, Medicare regulations require them to keep a uniform price list for treatments and procedures for all patients (California Healthline, 2/20).
According to the Wall Street Journal, it is "unclear" how the discount policy, which will be implemented fully by June 30, will affect Tenet's finances. Tenet said that the discounts will vary among hospitals and will be comparable to local managed care discount rates, which generally range between 30% and 70% off of list charges, the Wall Street Journal reports (Rundle, Wall Street Journal, 3/3). Tenet's discounts will not apply to copayments or deductibles required by Medicaid, Medicare or other federal health care programs (Yu, Dallas Morning News, 3/2). According to the Times, the discount plan could help Tenet decrease the amount that it writes off as bad debt by reducing uncollected booked revenue. Tenet currently collects an average of 7 cents of every dollar spent on care for the uninsured.
The Times reports that Tenet is believed to be the first hospital chain to offer such a discount program to uninsured patients without regard to income or ability to pay. Tenet CEO Trevor Fetter said, "Our Compact With Uninsured Patients represents a groundbreaking approach by Tenet to help solve one of our nation's most pressing problems." K.B. Forbes, executive director of Consejo de Latinos Unidos, said, "We applaud Tenet. What they have done -- adopt a universal, across-the-board price discounting plan -- will force other hospitals to look." Rick Wade, a spokesperson for AHA, said that Tenet's plan promotes AHA's goals but cannot be used at every hospital, adding, "There are some places, particularly larger hospital systems, that will look at what Tenet has done as a model for what they can do." Wade said, "Every place will handle it a little differently" (Los Angeles Times, 3/3).
Tenet said that the discount program would not be implemented at its 13 Texas hospitals because state law "does not permit it." However, Jim Hurley, a spokesperson for the Texas Department of Insurance, said that the company may have "misread the law," which prohibits providers from knowingly charging people with health insurance higher prices than they charge the uninsured. Hurley said that the law does not apply to Medicare or Medicaid beneficiaries or the "medically indigent." He said, "We just don't want someone to be charged more just because they have insurance. But TDI doesn't want to discourage providers from providing discount services for charitable reasons." According to the Morning News, company officials said that they "stand by" their interpretation of the Texas law but said that they "would welcome an opportunity to clarify the matter" with TDI (Dallas Morning News, 3/2).
Meanwhile, at a meeting of the Federation of American Hospitals, which represents for-profit hospitals, House Ways and Means Committee Chair Bill Thomas (R-Calif.) said that he would hold "at least one" hearing next week on prices that the uninsured pay in the current health care system, the Journal reports. Thomas also said that he would examine whether not-for-profit hospitals "do enough to earn their tax-exempt status," according to the Journal (Wall Street Journal, 3/3).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.