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Proposed Washington Hospital Sale Puts Charity Care At Risk

August 12, 2003
Janet Varon, Northwest Health Law Advocates (206) 325-6464
Tony Sandoval, Yakima community activist (509) 457-3561
Michelle Jun, Consumers Union (415) 431-6747

HMA Goes Back On Its Word to Maintain Charity Care at Local Hospitals
For-profit chain plans to slash qualifying income levels for charity care at Providence Toppenish and Yakima Hospitals

Yakima, WA – As state Department of Health regulators are poised to grant Health Management Associates, Inc. (HMA)’s application to acquire Providence Hospitals in Yakima and Toppenish, consumer advocates are raising concerns about reductions in the amount of charity care that the for-profit company will provide. HMA made promises to the community that they would continue Providence’s charity care policies. However, it now appears HMA has gone back on its word.
“We are worried that for-profit HMA, in order to enhance its bottom line, will substantially reduce the charity care at these hospitals,” said Janet Varon, Executive Director of Northwest Health Law Advocates. “This deal should go forward only if HMA proves that charity care will stay the same or improve, not get worse.”
HMA has indicated to community advocates that it will not follow Providence’s current policy of providing free care to uninsured persons with income below 200% of the Federal Poverty Level (FPL), or to write off part of the hospital bill for those with income below 300% FPL. Instead, HMA is planning to reduce free care to 100% FPL and partial write-off to 200% FPL – the minimum that Washington’s charity care law requires. If the proposal is approved, many low-income people currently eligible for charity care would lose it. Consumer organizations have urged HMA to maintain the existing charity care policies, but HMA has refused to make a commitment beyond the legal requirement.
For example, under current Providence policy, a family of four can have income below $36,800 per year and qualify for a full write-off of hospital bills not covered by insurance. But under HMA’s policy, that same family would have to have income below $18,400 to qualify for a full write-off. If they have income of $36,800 or more, they would be billed for the entire cost of care. (Under both policies, medical debts would be subtracted, and assets like bank accounts would be added to arrive at the income.)
HMA promised to continue Providence’s charity care tradition
At the public hearings held in Toppenish and Yakima on July 8 regarding the hospital sale, members of the business community, public officials and medical staff described assurances received from HMA that charity care would be maintained. In HMA’s original application to acquire the hospitals, submitted to the Department of Health and circulated broadly to the public, HMA said they would keep Providence’s current free care and sliding-fee scales. The change was made two weeks after the hearing. “This feels like a betrayal of the promises made to the Yakima and Toppenish community,” said Tony Sandoval, a Yakima community activist concerned with healthcare. “Everyone in the community has been so eager to welcome HMA to the community based on what they have said, but actions speak louder than words. We don’t want this company to drive our uninsured and underinsured families into debt.”
First Application of Washington Hospital Conversion Law
HMA’s proposed acquisition of the two nonprofit hospitals is the first instance of a hospital conversion since a state law was enacted to govern how such acquisitions may occur. The law requires, among other things, a determination by the Department of Health that the change in control “will not detrimentally affect the continued existence of accessible, affordable healthcare that is responsive to the needs of the community in which the hospital to be acquired is located.” The for-profit company must be “committed to providing healthcare to the disadvantaged, the uninsured, and the underinsured.”
Michelle Jun, a staff attorney with the Consumers Union said “if the state allows HMA to lower the amount of charity care provided at these hospitals, it will set a terrible precedent for the future. Ultimately, that will mean less charity care for uninsured and underinsured families in Washington state.”