What will change for charity healthcare with AU Health-Wellstar merger?

Most of the changes coming when Wellstar takes over operations at AU Health will be on the backend, but once the deal is finalized the clock will start on one policy change that could impact several patients.

For the first year, the new Wellstar MCG Health will continue the current AU Health indigent and charity care policies. After a year, the new organization will change over to Wellstar's policies.

Earlier this month, the documents outlining the process by which Wellstar will become the sole corporate member of AU Health were made public for the first time. The 89 documents filed for routine legal review with the Attorney General's office outlines what will change and what will stay the same.

Wellstar declined to comment on specifics for this story, citing the ongoing work on the agreement, and referred the Chronicle to AU Health. AU Health had no additional comment.

Big bucks: AU Health workers could see smooth shift to Wellstar, but some changes coming. See the details.

Spending habits: How much is Wellstar spending in its merger with AU Health? Check here for the details

"While Wellstar is excited about the many community benefits of our potential partnership with Augusta University Health System, we are still working together to finalize details and secure regulatory approvals to proceed," wrote Kristy Helms, a spokesperson for Wellstar, in an email.

According to the Kaiser Family Foundation, nonprofit hospitals must establish some financial assistance policy to determine who is eligible for charity care, cap charges for charity care, and see if patients are eligible for charity care before trying to collect debt, among other requirements. On average, the Foundation estimates hospital charity care represents 1.4% of operating expenses. The specifics of the policy are up to the health system.

"Hospitals can kind of establish their own criteria for who's eligible," said Leah Chan, senior health analyst with the left-leaning Georgia Budget & Policy Institute.

AU Health policies versus Wellstar

According to documents available online, the policies of Wellstar and AU Health are not dramatically different for charity care, that is care provided for free to people who are uninsured or underinsured.

Wellstar's policies provides a discount to all people without insurance, between the cost of care and the federally defined "Amounts Generally Billed," or the average charged for a procedure to people with insurance. Wellstar will covers all costs for people making up to 125% of the Federal Poverty Level, and up to 97% of the amount generally billed for people making up to 200% of the FPL. Other discounts can be added for people making up to 300% of the FPL.

AU Health's indigent care policy says that those making less than 200% of FPL may qualify for free care. Those making up to 400% of the FPL may receive additional discounts depending on the total amount that they owe (for example, someone making 400% of the FPL would have no discount on a $10,000 bill but receive an 85% discount on a bill of over $100,000).

Report: Georgia nearly last in health insurance coverage, trailing Southeast

How much indigent and charity care AU Health provides annually varies, but a fair market analysis and community benefit assessment, prepared for AU Health as part of the merger, estimates it is about $65 million based on historical averages.

There are also systems in place to support hospitals providing this charity care. Georgia has the Indigent Care Trust Fund, which Chan said receives funding through fees, federal matches and other programs. Health care providers can get some money back for the charity care provided from this fund.

According to an AU Health financial statement also filed as part of the merger, AU Health collected about $14.9 million in fiscal year 2022, and a similar amount the year prior. It also received about $7.2 million from a similar program for hospitals in the South Carolina Medicaid program.

Chan, for her part, would like to see Georgia expand Medicaid to reduce the number of people without insurance seeking charity care. This summer, Georgia will begin a limited Medicaid expansion called Georgia Pathways, that will likely expand care to about 90,000 Georgians, but not a full expansion for all Georgians making less than 138% of the FPL.

"One thing that we could do at a policy level would be to fully expand Medicaid so that we don't have to depend on the goodwill of hospital systems," Chan said.

This article originally appeared on Augusta Chronicle: AU Health, Wellstar merger will change charity care policy, here's how