Can you explain charity care?

Charity care in general is free or discounted care provided to low-income people who qualify for financial assistance.

The Virginia Department of Health, through the Certificate of Public Need program, can require hospitals and other providers to do charity care as a condition of having a project approved.

For instance, HCA’s John Randolph Medical Center was approved in July 2013 to add 16 psychiatric beds. As a condition of approval, the hospital had to agree to do charity care valued at 3.6 percent of all inpatient psychiatric services. Hospitals can do more charity care than required, or in lieu of charity care, they can make in-kind or cash donations to safety-net providers such as free clinics.

The most recent charity care report available from the state Health Department’s Office of Licensure and Certification is for 2012. It shows reports submitted on 217 projects, and all were compliant with provisions. Of the total, 120 met the requirements by providing care (valued at $1.2 billion), and 97 were compliant by donations (valued at $32.2 million).

Virginia Health Information, a private nonprofit agency with a contract to collect, analyze and report on Virginia health facilities, includes charity care information in its annual hospital Industry Report. Key elements of the report are online at Charity care is listed in the revenue column — but is counted as contra revenue and subtracted from revenue.

For the most recent year available, fiscal 2012, charity care dollar amounts vary by facility.

For instance, VCU Health System provided $271 million in charity care, and the University of Virginia provided $179 million. The Richmond-area Bon Secours and HCA hospitals collectively provided more than $250 million.

Those figures reflect the total values of charity care provided after subtracting disproportionate share dollars the medical centers receive for treating a lot of uninsured people. Those disproportionate share dollars are in jeopardy. The Affordable Care Act assumed states would expand Medicaid, so there would be less need to supplement hospitals because people would have insurance. Because Virginia has not expanded Medicaid, that leaves a large uninsured population, but those dollars might be reduced.

Nonprofit and for-profit hospitals differ in the amount of charity care they provide. For-profits pay taxes, while nonprofits do not and are expected to offer some community benefit to compensate for tax-exempt status.

Individuals facing large medical bills, or who have delayed medical treatment because they can’t afford it, can contact hospital financial screening offices to see if they qualify for charity care.

Many local safety-net providers — free clinics and community health centers — partner with Access Now, a Richmond Academy of Medicine program that screens people who need specialist care, including surgery, imaging and outpatient procedures, but cannot afford it. Access Now arranges for those people to get care at participating providers, who are able to count that care as part of their charity care obligation.

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