By Ariel Hart – Atlanta Journal-Constitution
A bill that has already passed the state House of Representatives would allow Georgia’s public hospitals to seize their patients’ state income tax refunds for unpaid debt.
Nationwide, rising medical costs and insurance troubles are crushing rural hospitals — and patients, too. One in 5 workers with company insurance says he or she has trouble paying medical bills, with the largest share of that debt being hospital bills. Studies show that hospital bills can easily have errors. Individual charges may also be boosted to make up for other losses, and prices may skyrocket just because they happened in a hospital.
But hospital advocates pushing House Bill 81 say that they’re not fancy high-end facilities and they have no choice.
“Clearly these hospitals are suffering because there’s a substantial population that have come to realize that they will always get treated at the hospital, and decided in the shortage of caregivers their source of care is going to be the emergency room,” said Jimmy Lewis, the CEO of Hometown Health, which represents rural hospitals.
“Then they get their income tax refund and use it to buy candy and beer,” Lewis said.
If HB 81 becomes law, the debt amount would be whatever amount the hospital certifies it to be.
The bill would not require the hospital to go through the courts or obtain a judgment first. The clock for the patient to respond would start ticking the moment the seizure notice is mailed. Their window would close at 30 days, and if the patient doesn’t respond by then, the proposal says the patient would be waiving his or her opportunity to contest the seizure.
HB 81 also would allow the Department of Community Health to assess up to $20 for a collection fee. The debt has to be at least $25 for the hospital to try to take the patient’s refund. No matter how low the debt is, the first $20 would go to the collection fee.
Jamie Gingold, a bankruptcy lawyer with offices throughout North Georgia, thinks the bill could violate constitutional rights to due process.
“A lot of my clients have complaints about the accuracy of the medical bill,” she said, and those often take longer than 30 days to resolve.
“My clients are trying to keep a roof over their head, trying to keep food on the table, trying to keep a car to get back and forth to work,” she added, casting aside the “candy and beer” picture. Sometimes people lose jobs or can’t afford deductibles that now rise into the thousands of dollars, she said. “These aren’t people who are taking,” she said.
HB 81 was introduced last year but stalled. It ws revived and passed out of committee last week, then passed the House floor on Crossover Day, the last day that any bill could survive the two-year session by passing over to the other chamber without special maneuvering. It now goes to the Senate.
Grady Memorial Hospital, the home of the state’s premier trauma department, said it was still reviewing the legislation to see whether it would apply to Grady. The bill only applies to hospitals operated by a government authority, and Grady’s oversight was restructured in 2008 with a corporation in between it and the Fulton-DeKalb Hospital Authority.
Backers say the bill isn’t intended for big-city facilities, but to help struggling rural hospitals. Beth Stephens, the senior director of public policy and advocacy at the consumer advocacy group Georgia Watch, said she sympathizes with their struggle.
“But there’s too much room for error and dispute when it comes to hospital bills,” she said.
The reluctance of the state to expand Medicaid, citing future costs to the state, was a recurrent theme in discussion of the bill’s provenance. The Affordable Care Act, or Obamacare, did not cover the poorest adults, assuming the states would expand Medicaid to fill that gap, but then the U.S. Supreme Court said states could choose not to expand the program that provides health care to the poor and disabled.
Daniel Graves, a volunteer hospital authority chairman overseeing Elbert Memorial Hospital in Elberton, wouldn’t say the lack of expansion was good or bad. But, he said, it’s contributed to a larger population of uninsured people that the hospital still has to treat when they walk in the door. On top of that, deductibles for those insured have soared, and some can’t pay.
“There’s reasons why,” he said. “There’s a whole host of reasons why that we’re sympathetic to. But we’re dying from lack of cash flow.”
Graves came up with the idea for the bill after hearing about hospitals in neighboring South Carolina that seize tax refunds. He doesn’t know how much the hospitals might get if they’re successful.
No one knows whether it would be effective or by how much. Anything would help, though, Graves said. “Unfortunately, in the climate I’m in we have to find solutions that don’t raise taxes and are palatable to a generally red state,” he said.
Graves discussed it with state Rep. Tom McCall, R-Elberton, who introduced the bill. McCall did not return a request for comment.
Lewis and Graves stress that the bill makes provisions for hard-up patients. It would mandate that the the hospital apply its financial assistance discount “when the debtor meets all the qualifications for financial assistance.”
Nothing in the bill would mandate informing the patient at the time of the seizure of the existence of such discounts. Each hospital has its own financial assistance policy, and it’s up to the patient to provide proper income records to get qualified.
Graves insists the hospitals will not abuse the new power. The main goal, he said, is to get patients back in the door to work out a plan they can pay and not disappear.
“We try to work with patients,” he said. “With that said, once somebody comes in and receives the services and leaves the door, collection is just problematic.
“A lot of times, and it’s not just us but with rural hospitals in general, we can’t take people at their word, ‘I can’t pay my bill.’ They have to provide some proof of income, proof of the situation,” he said. “But once they get out the door, getting them back in to work out a financial plan can prove very difficult.”
A 2016 study by the nonprofit Kaiser Family Foundation found that 1 in 5 Americans on private insurance reported trouble in their household paying medical bills that year, and most of those had cut back on food, clothing and basic household spending. Some had taken on a second job or borrowed from friends and family.
Separately, the news website Vox this year investigated hospital charges. The same service at a hospital can often cost many times the price outside the hospital, as hospitals try to spread the cost of operating expensive services over all its patients.
Graves said hospitals have few other options when a community decides it wants to have a hospital and is reluctant to raise taxes to keep it running.
“While I’m sympathetic, I can’t operate on love,” Graves said. “I have to have cash to pay those doctors and nurses and vendors.”
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Source: Atlanta Journal-Constitution