Introduction:

On Tuesday, June 7, 2005 and ________________, the Human Services Committee of the New Haven Board of Aldermen held public hearings on the status of the charity care and collection policies and practices at Yale-New Haven Hospital [YNHH]. The hearing was called to help the Committee assess YNHH’s policy in the aftermath of the 2003 controversy that drew national attention to the Hospital, which is by far the largest health care provider in Greater New Haven. Another factor in our decision to call the hearing was the series of charges made in the Hospital Debt Justice Project report, A Debt Past Due, claiming that the announced reforms of Hospital policy are misleading, that many of the original problems persist, and that in certain cases the problems have worsened.

The purpose of the hearing was to review Yale-New Haven Hospital’s current collections and charity care practices and gather facts about the accessibility and amount of the Hospital’s charity care contribution to qualified patients in the New Haven community. At the June 7, 2005 hearing, the Committee allotted equal time to witnesses for the Hospital and the Hospital Debt Justice Project. A period of public comment followed. Following the first hearing, we held the public record open until August 8th, in order to receive further information. The Committee then received a proposed draft report and heard testimony on the draft and the issues discussed therein at a subsequent public hearing held on ___________________. This report summarizes the issues presented at the hearings and in subsequent submissions, and concludes with a list of recommendations to the Board of Aldermen regarding YNHH’s charity care and collection policy.

We deeply appreciate YNHH’s cooperation with and participation in this process. The Hospital complied promptly with requests for large amounts of information, and responded to numerous questions. We hope that that spirit of openness will continue.

Discussion:

As a matter of policy, Connecticut does not have public hospitals, and relies on private, non-profit hospitals to take care of those citizens who cannot afford the full cost of their health care â€" particularly in our urban centers. Thus, Yale-New Haven Hospital is an integral part of the health care safety net of New Haven. As such, it has dual responsibilities to maintain its fiscal stability over the long term while providing a sufficient level of charity care to the low-income population in need who otherwise could not afford hospital care.

The State of Connecticut, the City of New Haven and the federal government recognize these competing obligations and seek to alleviate them through millions of dollars in state funding through disproportionate share hospital payments, graduate medical education payments and the provision of tax exemptions on items like income and property.

National studies strongly suggest that patients who lack adequate health insurance or have medical debt are likely to postpone or do without needed health care. These trends suggest that those patient populations who are unable to obtain free care or are the target of aggressive collections policies may not have a fair opportunity to benefit from the Hospital's resources and facilities. This is of particular importance to residents of the City of New Haven, because African-Americans and Latinos â€" who together make up a majority of the City’s population â€" are twice and three times, respectively, as likely to be uninsured as whites.

The Committee had these facts in mind as we listened to the testimony and read the documents. There were strong differences about the facts in the testimony presented. Yet without attempting to decide every issue, the Committee concludes that the Hospital’s free care process, notwithstanding significant reforms, is seriously flawed. We do not understand why although there are hundreds of applications for free care filed each year, the great bulk of charitable care is provided to people who do not file applications, but are granted free care as part of the Hospital’s collection efforts, and that many of those people therefore needlessly suffer the emotional stress and damage to their credit rating caused by aggressive debt collection. This is not only inefficient, but at a more fundamental level, demonstrates that the time has come for the Hospital to reexamine how it operates its free care system. In our view, a telling measure of the effectiveness of the free care application program is to see if, with changes, most free care will be provided through the application process, instead of being part of the collection system.

We heard much testimony about how hard it is to get through the application process. Professional social workers told us that they were constantly calling and being told that their client’s file needed yet one more document before a decision could be made. All of these clients were virtually penniless. As far as we can tell, remarkably few free care applications are denied because the applicant can afford to pay for care. Rather the applications are simply abandoned because of the complexity of the requirements. .

The Committee concludes that the Hospital’s basic approach to care for the indigent needs change. In our view, when a person presents him or herself for care and claims indigence, necessary care should be provided until the Hospital concludes that the individual is sufficiently solvent as to be able to pay for care. We heard no evidence that a significant number of applicants had hidden assets or income. Rather, it is evident that most of them could pay only at most a token amount for their care. This method is essentially the one used at the Hospital of St. Raphael, where financial issues are thrashed out after care decisions are made, not before. YNHH also needs a clear, single application for both uninsured and underinsured people with simple rules about what documents are necessary and how applications are processed.

Our primary recommendation below is that the Hospital should create a system of Provisional Eligibility under which patients who lack insurance or who are underinsured, are strongly encouraged to file an application for free care. As soon as they file such an application at any inpatient or outpatient facility of the Hospital, care should begin and/or continue unless the application shows on its face that the person is ineligible for free care. If, after investigation by the Hospital, the applicant is shown to have substantial assets or income, appropriate collection efforts can follow, and in extreme cases, future care may be terminated.

That change should be accompanied by an enormous decrease in the paperwork required by the process. Several of us have connection with organizations that provide financial credit. Those organizations rarely rely solely on the statements of applicants or the documents they provide, but rather receive standardized credit reports which provide unbiased information. The Hospital is surely entitled to ask for the information it needs, but the applications and information demands it makes are clearly excessive.

The subject that brought out the most intensity of feeling at the hearing is the Hospital’s requirement that all applicants for free care furnish a Medicaid denial before their applications are considered. It was agreed by all that this requirement is the largest single cause of delays in free care determinations. The Hospital is fully aware that Medicaid is never more than 90 days retroactive, will not consider the applications of persons whose application shows they are over-income, and except in rare emergency cases, will not pay for the care of undocumented immigrants.

The Committee cannot understand why the Hospital would require people to perform such a complex, difficult and pointless act. The Committee was not persuaded by the Hospital's explanation that sometimes Medicaid makes exceptions. Case managers told us that the Hospital’s policy is a major contributing cause to the lengthy waits that their eligible clients have to undergo, given that DSS is grossly understaffed and is having great difficulty performing its legally mandated tasks. In our view, the Hospital should instruct its staff to require Medicaid applications only for persons plausibly likely to be granted and that it should process free care applications without waiting for the result of any Medicaid application. If Medicaid is granted, it is a mere bookkeeping entry to move an account from free care to Medicaid. We also should note that if our Provisional Eligibility plan were adopted there should be many more successful Medicaid applications because they would be done before care was provided instead of months afterward. It might even be that a Provisional Eligibility plan might actually save money for the hospital.

Although the Committee focused most of its effort on looking for ways to improve the free care process in the future rather than trying to right old wrongs, it did receive evidence that the Hospital’s collection methods may still be harsh and inequitable for a considerable number of people. Rather than focusing on particular cases, we would strongly urge the Hospital to create an independent oversight advisory board, comprised of all the stakeholders in the process, which would be empowered to hear all complaints about the free care and collection process and to make recommendations to the Hospital about how they should be dealt with. Our Committee would be very willing to provide the Hospital with names of distinguished citizens who would be willing to serve. We would expect that statistical reports of their actions would be available to the public.

We close our recommendations with one dealing with accountability. We think the Hospital should publish a quarterly report about the free care process which shows the number of applications made, the number processed and denied/granted, the reasons for the denials, and the value at cost of the care granted.

Finally, the Committee notes that the Hospital’s proposed Cancer Center raises an issue that bears indirectly on the issues addressed in the hearings. In connection with the Cancer Center, the Hospital has described its intention to raise health insurance rates for private insurance by as much as 7.5% each year for the next 7 years. The Committee has a concern that such regular increases by the dominant hospital provider in the market could exacerbate the health insurance crisis in our state. If underlying provider costs go up, the premiums charged to employers will likely rise as well; this could ultimately result in an increase in the number of people without adequate health insurance in our area.

Recommendations:

The New Haven Board of Aldermen lacks regulatory authority to compel Yale-New Haven Hospital to change its policies and practices. However, the City forgoes significant tax revenue each year [on top of millions in state and federal subsidies] on the expectation that YNHH as a non-profit charitable organization will fulfill a public need by providing a health care safety net to those who cannot afford to pay the full cost of their health care. Accordingly, the Human Services Committee recommends that the Board of Aldermen pass the attached resolution urging the Hospital to adopt a series of recommendations to reform its debt collection practices.

Resolution of the Board of Aldermen
In Support of the Reform of the Free Care Policies of Yale-New Haven Hospital

Whereas: In Connecticut, private not-for-profit hospitals fulfill the function of safety net providers of health care to uninsured and underinsured residents.

Whereas: The federal, state and City of New Haven governments, through such means as disproportionate share hospital payments; graduate medical education payments and exemptions from taxation, provide millions of dollars in subsidies to Yale-New Haven Hospital for the purpose of fulfilling its safety net mission.

Whereas: In Connecticut, African-Americans are two and a half times as likely to be uninsured as whites, and Latinos are nearly five times as likely to be uninsured as whites.

Whereas: African-Americans and Latinos make up a majority of the population of the City of New Haven, and the city contains a disproportionate number of uninsured and underinsured people in comparison to the rest of Connecticut.

Whereas: the Human Services Committee of the Board of Aldermen has received credible evidence that Yale-New Haven Hospital’s collections and free care policies and procedures continue to raise unnecessary barriers to care.

Whereas: Those barriers disproportionately affect the most vulnerable citizens of our community, especially immigrants.

Whereas: Yale-New Haven Hospital’s charity care and collections policies may discourage uninsured and underinsured patients from receiving the benefits of treatment at its facilities, putting those patients' health and lives at risk:

Now, therefore, be it resolved that the New Haven Board of Alderman urges Yale New Haven Hospital to adopt the following changes to its policies and procedures:
1. Institute a policy of "Provisional Eligibility" under which all uninsured and underinsured patients are strongly encouraged to apply for free care, and presumed eligible once they apply. Such patients:
• Would not face collections activity such as lawsuits, wage garnishment, bank executions, liens and foreclosures.
• Would be provided non-emergency treatment regardless of outstanding debt, without being required to make a down payment and prior to free care approval.
2. As part of the policy of Provisional Eligibility, eliminate unnecessary paperwork and other hurdles to accessing free care:
• Eliminate the requirement for a Medicaid denial;
• Ease the excessively stringent proof-of-income requirements and eliminate the notarized declaration of support;
• Apply the statutory discount automatically to all self-pay patients rather than force patients to apply for discounts;
• Restore full eligibility for free care to patients with inadequate insurance coverage as well as patients with no insurance and treat their applications for free care in the same manner;
3. Adopt a cultural change in the approach to uninsured and underinsured patients:
• Establish an independent community oversight board to hear complaints, review policies and make recommendations to the YNHH Board of Trustees regarding the hospital’s charity care, billing and collections policies, procedures and practices and well as what the hospital should do about particular cases that have come before it.
• Conduct a serious analysis of the potential benefit of devoting the money currently spent on collection agencies and attorney fees to hiring knowledgeable counselors capable of successfully guiding patients through the application processes for both public assistance and hospital-provided charity care. The goal of such an effort should be to maximize the number of successful applications for Medicaid, SAGA and other insurance benefits.