Public Hearings Scheduled on Hospital Indigent Care Funding

ALBANY, NY, July 19, 2007 – How funding should be allocated among hospitals to compensate for unpaid medical care, referred to as indigent care, will be the subject of public hearings on July 31 and August 13 by the New York State Department of Health in conjunction with the State Assembly and Senate health committees chairs.

"An evaluation of taxpayer funding for hospital indigent care is one of the many ways we are examining New York's health care system to ensure that New Yorkers have access to health insurance coverage and high-quality health care services," said New York State Health Commissioner Richard F. Daines, M.D. "We encourage consumers, health care providers and other interested individuals to take advantage of this opportunity to provide input on the State's distribution and use of funding for indigent care."

"Providing access to health care services for uninsured New Yorkers is our number one health priority," said State Assemblyman Richard N. Gottfried (D-Manhattan), chair of the Assembly Health Committee. "Historically, one of the ways we have done this is by providing funding to hospitals to cover their uncompensated care. These hearings will help us evaluate the best ways to allocate this funding in the future."

"These hearings reflect the Senate's belief that we have an open process to discuss policy alternatives for indigent care," said State Senator Kemp Hannon (R/C-Nassau Co.), chair of the Senate Health Committee. "The results of these hearings will need to be balanced with other health care policy changes being discussed and the need to continue the structure of New York's health care safety net."

The first hearing will be held at 9:30 a.m. Tuesday, July 31, in the Assembly Hearing Room, Room 1923, 250 Broadway in Manhattan. Pre-registration is required by July 23.

The second hearing will be held at 9:30 a.m. Monday, August 13, at the Sheraton Syracuse University Hotel and Conference Center, 801 University Ave., in Syracuse. Pre-registration is required by August 8.

Currently, $847 million in Medicaid funding is provided each year in New York through the state Health Care Reform Act to compensate hospitals for unpaid care provided to uninsured persons and others who cannot or do not pay. The funds are distributed to public and voluntary hospitals based on their reported losses from bad debts and charity care.

The 2007-08 State Budget provided for the creation of an Indigent Care Technical Advisory Committee and the holding of public hearings to assist in the evaluation of how the money is distributed "to ensure transparency and accountability."

The legislation requires that the State Health Commissioner, following consultation with the Assembly and Senate health committee chairs, submit a report by December 15, 2007, to the Governor and the Legislature that makes recommendations regarding the future allocation of funding.

To assist the Department of Health and the Chairs of the Senate and Assembly Health Committees in their assessment of the Hospital Indigent Care Pool, public comment is sought during these hearings on the following:

  • Can the distribution of Hospital Indigent Care Pool funds be better targeted through modifications to the existing award methodologies? In other words, should funds be distributed based on accounting losses or units of services provided to uninsured patients? If funds are distributed based on services to uninsured patients, how should the service be valued? Each hospital's costs? The Medicare rate? The Medicaid rate? Other?
  • Should Pool funds be available to cover unpaid co-payments and deductibles for insured patients? Should Pool payments be available to cover claims denied by third-party payors?
  • Should additional requirements be imposed on hospitals in order to participate in the Indigent Care Pool?
  • Should hospitals be required to absorb a certain percentage of the cost of care of uninsured patients?
  • Currently, hospitals that report more bad debt and charity care costs as a percentage of operating costs have a higher percentage of those reported costs covered out of the Indigent Care Pool. Should that practice continue or should all hospitals receive the same coverage ratio? Coverage ratios currently range from 46 percent of reported Bad Debt and Charity Care (BDCC) costs to over 100 percent.
  • To what extent should the recently enacted Hospital Patient Financial Aid Law alter the methodology for distributing Pool funds?

More information on the public hearings and pre-registration requirements can be found on the Department's Web site:

Separate from the review of the Indigent Care Pool methodology, the State Health Department issued a Request for Proposals (RFP) on July 9 entitled "Analysis of Proposals for Achieving Universal Health Coverage in New York." The RFP is available on the Department's Web site. In connection with that initiative, the State will be holding separate hearings on the steps necessary to achieve universal coverage. While the two processes are related, the public hearings on Indigent Care allocations are limited to the data, methodology, requirements and objectives of the Hospital Indigent Care Pool.