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Witness Testimony
Dr. Herbert Pardes
A Review of Hospital Billing and Collection Practices Written Testimony of
Herbert Pardes, M.D. Mr. Chairman, distinguished members of the Committee and staff - good morning, and thank you for convening this hearing on hospital billing and collection practices related to the uninsured.The Committee's inquiry into these matters has raised public awareness regarding a serious problem facing millions of Americans - the lack of health insurance coverage and ability to pay for necessary medical treatment.There are more than 43 million Americans living without health insurance, and millions of others lack coverage for catastrophic healthcare costs.As a result, U.S. hospitals treat millions of patients each year who can make only minimal payment, or no payment at all for the medical services they receive. My name is Dr. Herbert Pardes, and I am the President and Chief Executive Officer ("CEO") of the New York Presbyterian Hospital ("NYPH" or "NYP").I have served as the CEO of NYPH for four years.I appreciate the opportunity to testify and share my insight into and experience with NYPH's charity care and collection policies. NYPH has worked to promote change in how charity care is provided and how uninsured patients are billed.Through my testimony, I hope to convey NYPH's commitment to these important issues. I. Overview New York Presbyterian Hospital ("NYPH") is the largest, single hospital and academic medical center in the New York Metropolitan area.NYPH is comprised of four separate campuses, which collectively serve a large geographic region with many diverse communities.The vast majority of communities served by NYPH are ethnically diverse and economically distressed, with a large percentage of Medicaid-eligible, uninsured and underinsured individuals and families.As a result, NYPH treats a high percentage of Medicaid and uninsured patients. As a non-profit institution, NYPH maintains a sincere and longstanding commitment to meeting the diverse medical and social needs of the communities it serves.NYPH is especially committed to its obligation to provide care to both the uninsured and underinsured in its service areas.Each year, NYPH spends nearly $70 million in charity care, and writes off an additional $70 million in bad debt resulting from the unpaid balances of self-pay patients.NYPH also expends significant resources in support of its Community Benefit Initiatives, many of which are directed at the uninsured and underinsured populations. NYPH is committed to enrolling eligible patients into Medicaid and other government programs.NYPH routinely screens patients for Medicaid eligibility and assists eligible patients with the enrollment process.For those patients who are ineligible for Medicaid and who are not otherwise insured, NYPH offers charity care and other financial aid. NYPH has implemented a charity care policy that applies across all of its campuses.Under this policy, NYPH provides charity care/financial aid for patients with incomes up to 300% of the federal poverty level, or $56,550 for a family of four. In addition, NYPH routinely assesses patients' eligibility for assistance from the Philanthropic Fund, a fund which is used to pay the medical bills of patients experiencing financial hardship.To the extent that a patient is ineligible for either charity care/financial aid or the Philanthropic Fund, NYPH makes every attempt to establish flexible payment arrangements based on the patient's individual circumstances. NYPH also works to ensure the fair collection of outstanding patient debt.NYPH has internal policies and procedures, as well as written agreements with its outside collection agencies.NYPH's collection agencies do not pursue income executions on a patient's spouse, and do not force a foreclosure on a patient's primary residence.On average, NYPH collects only 12-13% of the charges for services to self-pay patients.After making reasonable efforts to collect the outstanding monies, NYPH must frequently write off some, if not all, of the uninsured balances.As noted above, these write-offs approach nearly $70 million per year.While a portion of this is reimbursed to NYPH through the New York State Bad Debt and Charity Care Pool, the write off of bad debt is still a substantial burden on NYPH. II. NYPH's charges NYPH recognizes that rising health care costs are a significant and growing concern.Increases in health care costs lead to increases in our charges. The increase in health care costs in recent years can be attributed to a variety of factors, including the increased costs of technology, research, pharmaceuticals, employees, insurance, and facility expansion and improvements.NYPH must absorb these increased costs, and must update its chargemaster accordingly.Generally speaking, NYPH's charge increases in recent years have been due to an overall increase in these types of operational expenses. NYPH understands that uninsured patients do not have the benefit of negotiated group rates.As such, NYPH has been and remains committed to providing free or reduced charge services that are medically necessary to persons who are determined to be unable to pay for their care, in whole or in part, based on their financial situation.A description of NYPH's charity care efforts is set forth below. III. NYPh's provision of Charity Care As the largest hospital in the New York metropolitan area, NYPH is serious about its commitment to provide medical care to both the uninsured and underinsured in its community.NYPH is continually modifying and improving its charity care policies to meet the three-fold challenge of surviving in the face of burgeoning costs and cumbersome federal and state regulation, continuing to provide high-quality, innovative medical care, and serving the needs of the uninsured and underinsured patients in its community.To this end, NYPH has recently revised its charity care guidelines in order to implement a new Charity Care/Financial Aid Policy ("Charity Care Policy") across all four of its campuses.NYPH's Charity Care Policy allows NYPH staff to consistently and fairly assess each patient's ability to pay for medical services, and provides a level of assistance commensurate with their resources. NYPH's provision of charity care/financial aid is not intended to be a substitute for existing government entitlement or other assistance programs.Based on the individual circumstances of each patient, NYPH makes every reasonable effort to explore appropriate, alternative sources of payment and coverage through Medicaid or other public and private programs.Eligibility for charity care/financial aid will be determined only after eligibility for Medicaid and other public and private programs has been assessed.This allows NYPH to provide charity care/financial aid to those patients that are most in need of assistance. A. Charity Care/Financial Aid Policy 1. Eligibility and Application Process NYPH's Charity Care Policy defines charity care/financial aid as "the provision of free or reduced charge services that are medically necessary to persons who are determined to be unable to pay for their care in whole or in part, based on their financial situation."While charity care/financial aid is aimed at NYPH's uninsured population, insured patients who face extraordinary medical costs, not covered by a third party payer, may be eligible for assistance.As a general rule, other than cases of medical emergency, NYPH offers charity care/financial aid to individuals who reside within the communities it serves. In assessing a patient's eligibility for charity care/financial aid, NYPH asks applicants to provide certain information and/or documentation related to their financial resources.NYPH asks applicants to submit the following: o Household income for the most recent three months; o Household income for the most recent twelve-month period; o Number of persons in the household and their relationship to the applicant; o Net assets (e.g., value of personal and real property, insurance policies, bank accounts, and other investment accounts); and/or o Form 1040 (U.S. Individual Income Tax Return) or, in the absence of a Form 1040, any other documentation that can be used to substantiate household income. NYPH reviews the application and documentation in making a decision regarding the patient's ability to pay for the services provided, and eligibility for charity care/financial aid.NYPH will provide free or reduced care to uninsured applicants with incomes below 300% of the federal poverty level (i.e., $56,550 for a family of four), and who have no significant assets other than their primary residence.The federal poverty level is listed in the Federal Poverty Guidelines for Non-Farm Income, which is published on an annual basis.Exceptions to the income levels may be authorized by a designated hospital executive.If a patient is found to be ineligible for charity care/financial aid based on their available assets and income, the patient's eligibility may be re-evaluated at a later date. Regardless, NYPH attempts to establish flexible payment arrangements based on the patient's individual circumstances. 2. Communication of NYPH's Charity Care Policy to the Community NYPH has made an effort to disseminate information about its Charity Care Policy to the communities it serves.NYPH has shared information about the policy with various community health agencies and other local organizations that assist individuals in financial need. NYPH also provides information about its charity care/financial aid programs in the Emergency and Admitting Departments of each of its facilities.In so doing, NYPH provides the information in the primary language spoken by the patients served by that facility.Finally, NYPH has trained the personnel who come in contact with uninsured and underinsured patients so they may educate such patients about the availability of, and process for obtaining charity care/financial aid. B. The Philanthropic Fund NYPH's Philanthropic Fund is used to provide aid to patients experiencing financial hardship.The Philanthropic Fund, which is supported by private donations, contains approximately three million dollars in available funding on an annual basis. Both insured and uninsured patients may apply for financial aid from the Philanthropic Fund.In order to receive monies from the Fund, the patient must submit a letter of hardship which details their financial circumstances, and explains why the patient is unable to pay his or her medical bills.The patient may also be required to submit financial documentation, such as W-2 forms, Form 1040s and mortgage statements.Upon receipt of the patient's letter and documentation, NYPH will make a determination as to the eligibility of the patient.If the patient is deemed to be eligible, NYPH will forgive the patient's entire balance due to the hospital, subject to the availability of funds.Monies from the Philanthropic Fund are allocated on a first-come, first-served basis. IV. NYPH's Community benefit initiatives In
addition to providing nearly $70 million in charity care per year, NYPH expends
significant resources in support of its Community Benefit Initiatives.Through these initiatives, NYPH collaborates with various local health
agencies to ascertain and respond to the myriad of health care needs of its
communities.NYPH incorporates the
outcome of these assessments into its strategic and program planning process in
an effort to target needed services to residents of its communities.NYPH currently funds approximately twenty Community Benefit Initiatives.The following initiatives are directed at the uninsured and underinsured
populations: NYPH's Facilitated Medicaid Enrollment Program is aimed at enrolling the uninsured in the Medicaid Program.NYPH funds community-based organizations, throughout its five targeted neighborhoods, which hire bi-lingual community-based staff to serve as liaisons.These liaisons seek out the uninsured by visiting public housing, homeless shelters, churches, schools, health fairs and other community events.The liaisons pre-screen uninsured individuals to determine if they are eligible for Medicaid, assist them in completing the application and gathering required documentation, and provide referrals to Medicaid application offices located throughout the City.As a result of these efforts, approximately 6,500 uninsured individuals have been enrolled in the Medicaid Program in a single year. NYPH's Pharmacy Assistance Program makes affordable pharmaceuticals available to the uninsured and underinsured patients who do not have a prescription drug benefit.The Pharmacy Assistance Program currently works with over 130 pharmaceutical manufacturers to offer more than 1100 legend drugs to eligible patients.Under this Program, patients pay a $5 co-payment for a three-month supply of medicine.Since its inception in August 2002, the Pharmacy Assistance Program has assisted many uninsured and Medicare patients to obtain the prescriptions they need at an affordable cost. NYPH's Prenatal Care Assistance Program seeks to enroll low-income pregnant women into the Medicaid Program.NYPH Medicaid counselors, at both the Columbia Presbyterian and Cornell campuses, pre-screen female outpatients in an effort to determine if they are eligible for participation in the Prenatal Care Assistance Program.The Prenatal Care Assistance Program is a State-sponsored initiative that expands the Medicaid eligibility criteria to include pregnant and postpartum women.NYPH maintains an electronic Medicaid application program that allows eligible pregnant women to receive Medicaid numbers within 48 hours. In 1998, the Columbia University School of Dental and Oral Surgery, in partnership with NYPH, the Mailman School of Public Health, Harlem Hospital, and Alianza Dominicana, became one of thirteen sites nationwide to be awarded a Community Voices Health Care for the Underserved Initiative grant by the W.K. Kellogg Foundation.This led to the formation of Northern Manhattan Community Voices Collaborative ("NMCVC").NMCVC is a partnership of over 35 community-based organizations, faith-based groups, health care providers, and institutions working to address the health care needs of the Central Harlem and Washington Heights/Inwood communities.Under the NMCVC Program, NYPH has worked collaboratively with its partners to increase Medicaid and Child Health Insurance Plus ("CHIP") enrollment in the targeted communities. NYPH's Community Outreach Program is also aimed at enrolling the uninsured into health insurance programs.NYPH substantially expanded its Community Outreach Program in 2001, when the number of Outreach staff grew from 12 to 36.The increase in staffing allowed NYPH to develop a grassroots strategy aimed at the uninsured members of the community.Outreach staff approach individuals in schools, day care centers, supermarkets, check cashing centers, Department of Labor sites, consulates and many other community locations.The staff members educate the patients about health insurance options and attempt to enroll them into CHIP, Family Health Plus and Medicaid plans. NYPH's Breast Cancer Screening Partnership is a program, directed by Columbia Presbyterian Hospital, which provides free breast and cervical cancer screening to uninsured and underinsured women.To be eligible for the program, a woman must be over the age of 40, and have either no insurance coverage or insurance that does not cover medical screenings.The Partnership conducts outreach, which includes education and recruitment of women, through community-based and faith-based institutions.The Partnership provides ease of access through its two mobile mammography units, and through formal referral linkages with Harlem Hospital and the Union Health Center. The Community Benefit Initiatives, described above, clearly demonstrate NYPH's strong commitment to the economically disadvantaged communities that it serves. NYPH makes every effort to obtain health insurance for the uninsured and underinsured, as evidenced by the Facilitated Medicaid Enrollment Program, the Prenatal Care Assistance Program and the Community Outreach Program.To the extent that patients are not eligible for Medicaid programs, NYPH provides low cost prescription drugs and free preventative services through several of its Community Benefit Programs. V. NYPH's collection policies NYPH works to ensure the fair collection of all outstanding patient debt.NYPH's handling of outstanding patient bills differs depending on a variety of factors, including the amount of the balance, whether the services were performed in the outpatient or inpatient setting, and the age of the account.For example, outpatient balances under $1,000 are handled by NYPH's Patient Financial Services Department.Representatives in the Patient Financial Services Department may take varying approaches based on the particular patient's needs and circumstances.The patient representative may assess a patient's eligibility for Medicaid, settle the account for less than the full balance, negotiate flexible payment arrangements, or assess the patient's eligibility for charity care from the Philanthropic Fund.The patient representative's goal is to tailor the arrangement to the individual patient's ability to pay. NYPH has internal policies and procedures, as well as written agreements with its outside collection agencies and law firms (hereinafter "outside collectors").NYPH's outside collectors do not pursue income executions on a patient's spouse, and do not foreclose on a patient's primary residence.NYPH's outside collectors routinely assess patients' eligibility for Medicaid and other government programs.To the extent the patients are ineligible, the outside collectors provide the patient with multiple opportunities to pay on the account. NYPH's outside collectors are expected to negotiate flexible payment arrangements based on the patient's individual circumstances, and to settle accounts for a percentage of the balance. On average, NYPH collects only 12-13% of the charges for services to uninsured patients.After making reasonable efforts to collect the outstanding monies, as required under the Medicare program, NYPH must frequently write off some, if not all, of the uninsured or self-pay balances.NYPH's bad debt expense approaches nearly $70 million per year. |
