Hospitals are sending patients to debt collection without first screening for financial assistance eligibility, despite the fact that “self pay” accounts for only 1.6% of net patient hospital revenue.
Portland, OR — Feb. 28, 2023 — The law may require nonprofit hospitals to give discounts to low-income patients, but that does not mean hospitals are playing by the rules. A new report from Dollar For, a national nonprofit that advocates for patients and eliminates medical debt on their behalf, discovered that Oregon hospitals are not meaningfully screening patients for financial assistance eligibility but are instead sending low-income patients to collections. The report also found that the category of “self pay” is only 1.6% of net patient revenue for hospitals, causing devastating financial consequences for patients with no real impact to a hospital’s bottom line.
“Medical debt can be devastating. It can ruin credit, affect the ability to own a house, and increase the chance of bankruptcy. Chances are someone you know who is impacted: records show Oregonians are $390 million in medical debt, nationally that number climbs to $88 billion,” said Jared Walker, Founder, Dollar For. “It’s time hospitals are held accountable for ruining the lives of people who need financial assistance the most. It’s time hospitals stop charging uninsured patients 2.5 times more than insured patients for procedures that are already marked up seven times the cost of service. It’s time for change, and that starts with making charity care laws known, easy, and fair.”
Oregon and federal law require nonprofit hospitals to give discounts to patients who apply for eligible out-of-pocket costs if patients are within a certain percentage of the poverty level (FPL). Oregon law adds a safety-net requirement, mandating that all patients within 200% FPL be screened for eligibility before their debt is referred to a debt collector or interest accrued. Oregon’s state law was passed in 2019 and went into effect at the beginning of 2020.
The new laws have had little meaning to hospitals. Since the requirement to screen patients went into effect, forty-two of the 60 Oregon hospitals gave less charity care than they did the year before. One debt collection docket found that four in 9 patients sued are likely at or below 200% FPL.
Moreover, data shows that increases in hospital financial assistance grants reduces hospital bad debt but does not affect net patient revenue. Lack of screening and debt collection causes devastating financial consequences for patients, without any significant impact to hospital finances.
One hospital, Oregon Health and Science University (OHSU), has proven that if hospitals take their burden to screen patients seriously they can increase financial assistance without affecting profitability. By adopting a robust presumptive eligibility component to its financial assistance program, the hospital has seen a 298% increase in financial assistance grants over the last two years while net patient revenue increased.
Walker added: “The burden must shift to the hospital to adequately screen patients for us to see real change as patients can’t be expected to navigate an already-complex system alone. These laws are safety nets for people who deserve to be screened before being subjected to the devastating consequences of medical debt – it’s time we start using them accordingly.”
About Dollar For
Dollar For is a national nonprofit that eliminates medical debt by empowering patients and advocating on their behalf. We support patients dealing with medical debt by leveraging hospital Charity Care policies and aim to make charity care known, easy, and fair. Our services are completely free – no strings attached. Since 2019, Dollar For has worked with patients to complete and submit over 4,300 financial assistance applications, which has led to over $23 million in debt cancellation. Dollar For’s advocacy team works with hospitals, regulators, and community partners to improve financial assistance policies and practices, and to encourage better compliance and enforcement of charity care laws.