L.A. County-run hospitals could expand free and discounted care

Hospitals run by Los Angeles County could make free care available to more of their financially strapped patients under a new proposal aimed at expanding relief from medical bills.

County health officials said the proposed changes, which also include deeper discounts for other eligible patients, could ultimately benefit thousands of people in the county, yet are unlikely to have a significant effect on hospital finances.

The move comes amid ongoing concern across California about residents putting off or forgoing medical care due to the expense, despite state efforts to expand access to charity care and make sure patients know about financial assistance.

Under the proposed rules, free care would be available to eligible L.A. County residents with incomes under 200% of the federal poverty level, or $60,000 for a family of four under current guidelines. The existing cutoff is 138% of the poverty level, which amounts to $41,400 for a family of four.

The revised rules would also reduce charges for patients who are eligible for discounted care from the county on a sliding scale — residents who make 400% of the federal poverty level or less — although the county has not yet spelled out exactly what those reduced amounts would be.

And the proposed rules would expand the program to cover patients who are "underinsured" or have healthcare coverage, including through government-funded programs that require patients to cover some costs, who are suffering from financial hardship.

Those changes could benefit Medi-Cal recipients who are not on "the free or no-cost version of Medi-Cal," as well as Medicare recipients who don't also have Medi-Cal, said Shari Doi, director of patient access for the L.A. County Department of Health Services, who presented the proposed changes at a county meeting Wednesday.

The changes must be vetted by legal advocacy groups under a consent decree entered into decades ago when the "ability-to-pay" plan was created — the result of a class-action lawsuit brought by people who had sought medical care from the county.

"The county is moving in the right direction with these improvements to the program," said David Kane, senior attorney with the Western Center on Law and Poverty, which was one of the groups involved in that legal fight.

In L.A. County, people earning under 200% of the federal poverty level "certainly cannot afford high medical costs — or even what other people consider to be modest medical costs." Making care available to them at no cost "is definitely the right thing to do, because those are the people who need this the most."

Still, Kane argued that L.A. County could go further in guaranteeing free care. He pointed out that the Alameda Health System in the San Francisco Bay Area, for instance, offers "full charity care" to families with incomes at or below 350% of the federal poverty level.

The county Department of Health Services had previously cautioned that waiving co-payments under Medicare could put hospitals at risk of being booted from federal programs.

Last year, in reaction to questions from The Times, it pointed to a federal alert stating that although medical providers could forgive a Medicare co-pay in light of financial hardship for an individual patient, such an exception "must not be used routinely" and "except in such special cases, a good faith effort to collect deductibles and copayments must be made."

The federal agency that oversees Medicare has also stated, however, that if a hospital can document that a Medicare patient is indigent or faces medical costs that could push them into poverty, the hospital "can then forgo any collection effort aimed at the patient."

Other safety net hospitals have reported providing free or discounted care for Medicare recipients: Last budget year, for instance, Zuckerberg San Francisco General Hospital reported more $3 million in charity care for Medicare recipients, according to a report submitted to the state.

That same year, the L.A. County-USC Medical Center in Los Angeles reported none.

Department of Health Services officials said that although they had not provided charity care up front in such instances, they estimated they were collecting only 10% of the medical debt sent to Medicare or Medi-Cal patients, and that the rest was ultimately written off after unsuccessful attempts at bill collection.

In a memo outlining the planned changes, Health Services Director Dr. Christina Ghaly said the move would allow "certain historically excluded populations to receive relief" from costs, as long as the changes align with the law. Treating the unpaid charges as charity care instead of "bad debt" — money unlikely to ever be collected — is unlikely to significantly affect revenues, Ghaly wrote.

The proposed changes are being unveiled shortly after the California Department of Public Health began faulting L.A. County-run hospitals for failing to prominently display their charity care policies on their website, a key requirement of a California law that went into effect last year.

There was a link on the website to the financial assistance policy, but state inspectors wrote that it was found only after "scrolling to the very bottom of the webpage" for billing, following a list of the hospitals in the county system and their billing contacts.

The state also found that hospitals run by the county health services department had failed to ensure patients were pointed in writing to an organization that provides free help getting and keeping health coverage, as required under the law.

In reaction, the county Department of Health Services told state investigators it had updated the back page of hospital bills and put up an additional posting in hospitals to include the website for the Health Consumer Alliance. The department also said it moved up the link to its financial assistance policy on its website.

The Department of Health Services said in a statement that its hospitals were not fined over those "relatively minor issues," which were "promptly addressed." The county said that well before that, it had been working to revise its financial assistance rules "to both expand eligibility and make the program more generous."

This story originally appeared in Los Angeles Times.