The Legal/Regulatory Framework:

Implementing Policies for Caring for the Uninsured as a Healthcare

Compliance Strategy

Suzie DraperChief Compliance and Privacy Officer

Intermountain Healthcare

Current Climate

• Era of increased social responsibility for large businesses• Hospitals are stuck between a rock and a hard place

because: Healthcare utilization is increasing The number of uninsured is increasing The reimbursement rate is decreasing

• Social responsibility takes on a whole new meaning in the healthcare environment

• Accurately reporting and quantifying the community benefit that healthcare provides is increasingly critical with increased public scrutiny

Social Responsibility

• Society expects a certain degree of accountability from big businesses

• A clear message when sent after Enron Jobs were lost Pensions went by the wayside Investors were misled

A Rock and a Hard Place

Utilization of healthcare is exploding To address this, hospitals are working to

improve how care is delivered to each patient Providing the right care at the right time,

every time, is critical Hospitals that achieve top standards in care

could reduce patients’ time in the hospital and complications

A Rock and a Hard Place

• Rates of those with healthcare coverage is rapidly decreasing Fewer employers can afford to provide

coverage Individuals may not be able to afford

coverage on their own

Uninsured and uncompensated care track parallel trends

35

37

39

41

43

45

47

1999 2000 2001 2002 2003 2004

Non-elderly Uninsured

(in billions)Uncompensated Care

(in millions)

Source: Census Bureau, American Hospital Association

Compliance Issues and the Uninsured

• The healthcare environment is the most regulated industry in the nation

• Several of these regulatory issues take on a new life when the uninsured are involved: Emergency Room treatment requirements Section 1101: Federal Reimbursement for

Emergency Services Provided to Undocumented Aliens

Identity Theft Language Services

Emergency Room Care

Emergency Room Care

• The uninsured are heavy users of the ER

• Makes the already overcrowded ERs even more so

• If the hospital’s ER is at capacity, it may go on diversionary status, forcing individuals arriving via ambulance to go elsewhere for care

• Under federal law, patients that enter the ER cannot be turned away, regardless of their ability to pay

Problems with both Supply and Demand

• Decreased supply caused by: Hospital closures and mergers

Reimbursement constraints Nursing shortage Less profitable services have been replaced

by higher revenue producing services such as cardiovascular care

Reduced discharge options

Increased Demand

• More patients without insurance seeking care in the ER

• Increased delay in being able to make an appointment to see a primary care provider

• Stricter enforcement of the Emergency Medical Treatment and Labor Act (EMTALA)

Specifically, EMTALA:

• Sets forth requirements for medical screening examinations (MSE) for medical conditions,

• Sets forth requirements for necessary stabilizing treatment or appropriate transfer, and

• Prohibits a delay in providing required screening or stabilization services in order to inquire about the individual's payment method or insurance status

Results of EMTALA

• “In effect, it’s America’s answer to universal access to health care–and a huge unfunded mandate on emergency physicians, trauma surgeons, on-call specialists and hospitals.”

Dr. Art Kellermann, an emergency physician who testified at the early

Congressional hearings on patient dumping

Section 1101

• Federal Reimbursement for Emergency Services Provided to Undocumented Aliens Covered services are the same as those

required by EMTALA $250 million is available annually Payment is only provided for services that

were not otherwise reimbursed

Section 1101

Identity Theft

• Accurate identification of patients who choose to provide false information

• Illegal aliens may think they need a SSN for treatment

• Patients with drug seeking behavior

• Insurance fraud

• Ramifications include: Inaccurate medical history Uncollectible services Law enforcement involvement

Language Barriers and the Uninsured

• One particularly challenging portion of the patient population is both Uninsured Considered to be limited English proficient

• More than half of immigrants are uninsured

• Providing language services and healthcare services can be costly to organizations

Regulations Related to Language Services

• Examples of regulations that pertain to the provision of language services include: Title VI of the Civil Rights Act of 1964 Americans with Disabilities Act (ADA)

Language Services Regulations

TITLE VI of the 1964 CIVIL RIGHTS ACT

"No person in the United States shall, on the ground of race, color or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving federal financial assistance."

Requirements of Title VI

• Must offer language services at no cost to each patient with limited English proficiency during all hours of operation.

• Must notify patients of their rights to receive such services

Title VI (cont.)

Must assure high quality language services are provided

Family and friends should not be used to provide interpretation services (except on request by the patient/consumer)

Must provide translated patient-related materials and signage, based on the population served

ADA

• Protects against discrimination of individuals with disabilities

• Emphasizes the provision of effective aids so that they may have “full and equal enjoyment” of all healthcare services

ADA (cont.)

• Examples of accommodations: Use of qualified interpreters Provision of written materials Closed captioning Video Relay Services

Keep in Mind …

• While challenging for healthcare systems, regulations such as Title VI, ADA, and EMTALA serve a needed purpose: To ensure that no one is denied emergency

care Regardless of:

Their ability to pay or The language they speak or Any disabilities they may have

Community Benefit

• Demonstration of steps the provider is taking to support its nonprofit charitable mission

• However, it receiving increased scrutiny by the IRS

• As a result, proper documentation of community benefit is critical

IRS Interim ReportTax-Exempt Hospitals and Community

Benefit

“The lack of consistency or uniformity in classifying and reporting uncompensated care and various types of community benefit often makes it difficult to assess whether a hospital is in compliance with current law.”

Lois Lerner

Director of IRS Exempt Organization Division

Community Benefit Industry Response

American Hospital Association is encouraging its members to actively report their community benefits through: Encourage Public Reporting Retain the Community Benefit Standard Increased Financial Accountability

Community Benefit Programs: Types

Community benefit operations• Dedicated staff• Community health needs and

assessments

Health professionals education, including scholarships

Community health services• Health education• Clinical services

Subsidized health services• Emergency and trauma services• Hospital outpatient services• Behavioral health services• Palliative care and hospice

Financial contributions• Cash donations• Grants• In-kind donations

Community building• Physical improvements and

housing• Economic development• Environmental

improvements• Coalition buildingResearch

Beyond the Numbers

• Community benefit programs, while not necessarily revenue producing, tie what healthcare systems do back to their missions: Providing compassionate healthcare to all Promoting the health of communities Paying special attention to those who need it

the most, including those who are the most vulnerable

The Future of Healthcare

• The number of unfunded government mandates is increasing

• Extensive requirements for hospitals strain the amount of resources available to provide care to the communities they serve

• Ongoing sustainability of healthcare requires innovative approaches

• This will no doubt shape politics in America for years to come

Other Tax Considerations

• IRS 990 Revisions

• Conflict of Interest Processes Boards Officers

• The Future of Property Tax Exemption

Questions/Discussion