Sunday, August 8, 2004

Ohio hospitals skeptical of health-care settlement

By Tim Bonfield
Enquirer staff writer

A lawyer suing hundreds of hospitals nationwide - including one Cincinnati-based hospital system - says that all nonprofit hospitals should provide free care to the uninsured if they earn less than 200 percent of the federal poverty level.

Those hospitals also should give discounted care up to 400 percent of the poverty level and agree to charge no more than 10 percent of an uninsured person's income per year to pay off owed bills.

These were among the terms that a large hospital group in Mississippi agreed to as part of a settlement announced last week - terms that lead attorney Richard Scruggs said should be a national model for how to bill uninsured people for care.

Hospitals in Ohio aren't so sure this settlement should be a model at all.

The settlement with North Mississippi Hospital Services calls for offering free care for an uninsured family of four if the household income is less than $36,800 a year; and discounted care for uninsured families with incomes up to $73,600 a year. The Mississippi hospital group also agreed to offer refunds or forgive debt going back three years and to base its charges to the uninsured on much lower Medicare standard rates, not the system's listed charges.

While Scruggs said he and other lawyers plan to use the settlement as a template for other deals, hospitals in Ohio remained skeptical.

"We intend to defend ourselves vigorously against the suit that was filed against us," said Greg Smith, spokesman for Cincinnati-based Catholic Healthcare Partners.

Of more than 40 cases filed this year in 21 states, three involve Ohio-based hospital groups, including the Cleveland Clinic Health System and the ProMedica health system in Toledo.

Catholic Healthcare Partners, which includes the five local Mercy hospitals, was sued in connection with its hospital services in Lorain, Ohio. No hospitals in Kentucky or Indiana have been sued, according to the legal team's Web site.

The Catholic hospital group provides free care to uninsured people up to 100 percent of poverty and discounts up to 400 percent of poverty, Smith said. It does not set an annual cap on how much an uninsured person would be expected to pay.

But Ohio hospital officials said reforms to help uninsured people shouldn't be decided in the courts.

For example, even if every nonprofit hospital agreed to the same terms, it would not affect doctor bills for the uninsured, fast-rising medication costs, rising rates charged by insurers, or employers adding to the ranks of uninsured because they can't or won't offer affordable coverage.

"These lawsuits are bringing some discussion and interest in how we pay for health care and how we don't pay for health care in this country," says Mary Yost, spokeswoman for the Ohio Hospital Association. "But this is not something that can be easily fixed by a lawsuit. This issue is not just about hospitals."

In Ohio, the Hospital Care Assurance Program requires hospitals to provide free care up to 100 percent of the poverty level. Bills totaling about $300 million a year are paid from a pool of money supplied by hospitals statewide and matched by federal money.

Doubling the income limit probably would more than double the number of people who would qualify for free care because most uninsured people are workers who earn more than the basic poverty level. It remains unclear whether hospitals could absorb such a change, Yost said.

Should such a limit be set, it would have hard-to-predict ripple effects throughout the health-care system. For example, Yost questioned whether employers who hire large numbers of lower-income workers would be tempted to drop benefits, knowing that the workers would qualify for free hospital care.



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