Paying for the Sick – Charity Care

As residents of the United States, each individual may lack access to health care by means of a system such as universal health care. We do however have a non-standardized system in place entitled “charity care” for those who are unable to afford access. There can be great benefits to those in need with such a system, as well as disparities amongst hospital systems.

Charity care has a variety of definitions and variations across state and hospital lines:
1. Charity Care: It includes all write-offs that are associated with any service rendered to individuals who are determined prior to service delivery to be unable to pay (MFH)
2. Uncompensated Care: “Hospital vernacular usually defines uncompensated care as the combined cost of charity care and the cost of bad debt (MFH).”
3. Unreimbursed Care: “Health care literature defines unreimbursed care as the sum of pure charity care and the
shortfalls and contractual allowances resulting from Medicare and Medicaid (MFH).”
4. Total Charity Care – which is the sum of each of the above definitions.
5. Indigent Care – these are services that are provided to uninsured or even underinsured patients who aren’t expected to pay for the services. Certain eligibility requirements are supposed to be met to fall into this category, however some how some institutions don’t have any distinction between charity care, free care, and indigent care (MFH).

With such broad definitions it is hard to universally define charity care, the eligibility requirements, and the accounting practices that go along with it. By law, all hospitals must provide some sort of charity care, however the main burden of this tends to fall on non profit hospitals. Additionally, there is no set requirement across the board on the level of charity care that each hospital has to provide. Some states have set rules, while others do not which allows hospitals to determine what their level of charity care is.

Ultimately the disparities from state to state and hospital to hospital not only effect each individual health care system and their means of operation, but also effect the patient. From New Jersey to California, there is most definitely no means of equality amongst patients across individual insurance providers, however when it comes to charity care across each state, the inequality lives on.

Policy makers have made several suggestions to have set standards at the bare minimum. They are pushing for universal definitions defining charity care and community benefits, standardized accounting which doesn’t allow some hospitals to report charity care based on cost of service while others report on hospital charges. This variation in reporting causes some hospitals to show a higher level of charity care than others. Lastly, policy makers have supported requiring hospitals clearly state their charity care practices to the public.

Since we do have a large proportion of people who do not have access to care I feel charity care for some is crucial. However, not having a standard of care when it comes to this practice leaves some right back where they started. Standardized rules and regulations allow a sense of equality at the very least.

MFH Health Policy Staff. “Hospital Charity Care in the United States.” Missouri Foundation for Health (2005)

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