Thursday, December 7, 2023

Michigan Nonprofit Hospitals' decline in Charity Care Might be a Good Thing

How Do You Qualify For Charity Care In Nj

An article in Crain's Grand Rapid Business makes the plausible case that a significant decline in the amount of charity care provided by Michigan's nonprofit hospitals is an indication that the public-private partnership involving Obamacare and nonprofit hospitals is working.  Others doubt that, and claim the decline in charity care is simply belt-tightening sacrificing charity care to maintain profit.  Here are some interesting excerpts:   

Michigan’s major nonprofit health systems largely provided less free or discounted care, known as charity care, in 2022 as hospital expenses rose under inflation and labor shortages. But bad debt, care the systems could not obtain reimbursement for from insurers and patients, flowed the other way and rose substantially. Some experts say rising costs caused systems to clamp down on charity care spending, but the systems say Michigan’s expanded Medicaid coverage and increased marketplace insurance enrollment last year led to reduced need for charity care.

Charity care at Michigan’s largest health system Corewell Health, dual headquartered in Grand Rapids and Southfield, plummeted to $36.4 million in 2022 from $95.3 million in 2021, according to Crain’s data. “Michigan’s Medicaid expansion, coupled with our financial counseling work and Medicaid or marketplace enrollment support, has reduced the demand for charity care,” the system said in an emailed statement to Crain’s. “In addition, in 2022, the federal government reimbursed Corewell Health for COVID treatment and testing for uninsured patients at Medicare rates. Many of those patients otherwise would have qualified for charity care.”

Medicaid enrollment grew by more than 700,000 during the pandemic thanks to the federal Families First Coronavirus Response Act, signed by President Donald Trump on March 18, 2020, which required states to continue enrollment of Medicaid beneficiaries for as long as the government declared the COVID-19 pandemic a public health emergency. Nationally, Medicaid enrollment grew by more than 21 million between February 2020 through December 2022, according to data from the Kaiser Family Foundation.

Largely thanks to that expanded Medicaid coverage, charity care dropped to $42.7 million in 2022 from $45.5 million the year prior at University of Michigan Health in Ann Arbor. At UM-Health West in West Michigan, charity care fell to $10.8 million from $11.2 million in 2021. The academic hospital system also said in a statement that extended Medicaid coverage lowered both charity care and bad debt, which totaled $74.4 million in 2022 versus $79.2 million a year prior.

darryll k. jones

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