LA County requires hospitals to report patient medical debt, as a way to reduce bills
Medical debt creates a huge financial burden in Los Angeles County that affects 1 in 10 county residents and totals $2.9 billion.
And the anxiety from unpaid medical bills weighs most heavily on those who can’t afford it, namely low-income and minority communities, as well as people suffering with chronic conditions, In some cases, the ripple effect results in food insecurity and family members forgoing future medical care.
Under the ordinance passed by the L.A. County Board of Supervisors, the county’s Department of Public Health will be able to pore through data on patient medical debt, shining a light on what has been called secretive hospital practices, possibly resulting in ways to help those owing thousands of dollars in unpaid bills. The ordinance will need a second reading at an upcoming Board of Supervisors meeting before it goes into effect.
To unravel this complicated problem, and possibly relieve some of the debt trapping county residents, the DPH on Tuesday, Aug. 6 was preliminarily granted the authority to begin collecting the data from seven hospitals in unincorporated county area — data from bills that were sent to collection agencies.
The goal is to look for errors or find missed opportunities for patient financial assistance.
“No one should incur medical debt in order to get healthcare,” said Dr. Elaine Batchlor, CEO of Martin Luther King, Jr. Community Hospital in South L.A. Batchlor testified in favor of the ordinance, saying her hospital will be one of the first to fully cooperate with the county.
“Writing off medical debt incurs a lot for a hospital but it is the right thing to do,” she said. Often, patients have healthcare insurance gaps and end up being charged for treatment or drugs unknowingly, creating high bills. Batchlor said her hospital uses a software program to root out insurance gaps beforehand and forecast medical costs.
MLK Community, and the county-owned and operated Harbor-UCLA Medical Center in West Carson, will be the first hospitals to participate in the program. Soon seven hospitals, including smaller ones such as East L.A. Doctor’s Hospital and Los Angeles Community Hospital will be required to provide data to the county, said county officials.
The county will be given records without names or clinical diagnoses, in order to not violate privacy laws. Then they’ll examine information, such as why did a hospital send a bill to a collection agency? Did the hospital not approve what’s called “charity care” for very low-income or uninsured patients? If so, why not?
“We are asking them (DPH) to look at debt collection and financial assistance. This information will help us understand the who, what, where, when, how and why in addressing medical debt,” said Fourth District Supervisor Janice Hahn, who authored the motion.
The ordinance says the purpose is to “increase transparency related to medical debt.” The county DPH will have the authority to enforce the ordinance.
Similar laws are in effect in Illinois, Oregon, Washington state, Virginia and New Mexico, said Barbara Ferrer, director of the county DPH.
She said that currently a hospital’s data on debts, billing, debt collection and financial assistance programs are unknown. The new ordinance will change that.
“We can ensure that a hospital’s financial assistance policy is having its maximum impact,” she told the board. “And DPH can determine if that person was or will be eligible for financial support.” Any information gleaned, such as if Medi-Cal could pay, will be shared with the hospital, which can go back and apply for funding.
Batchlor said in discussions with other hospital CEOs some were concerned about finding staff to fulfill the reporting requirements.
Paul Young, with the Hospital Association of California, said his group was concerned about the administrative burden on hospitals, especially smaller hospitals.
Robert Parker, representing the American Cancer Society, said cancer patients who are underinsured or have no health insurance can rack up medical debt in a hurry. Sometimes the bills affect medical decisions. “It can force patients to delay necessary treatment,” he said.