Hospitals must immediately report each time they attempt to collect medical debt from a patient to the Los Angeles County Department of Public Health, under an ordinance supported by county regulators on Tuesday.
The ordinance, which requires a second vote to pass, requires hospitals to notify the county within one or two months of beginning debt collection, which could include calling or mailing a letter seeking payment, sales owed to a collection agency more than 180 days after the first billing. debt, paycheck garnishment, bank account garnishment or notify a consumer reporting agency.
The new rules also require hospitals to report up to four times a year the medical debt patients have accumulated in recent months and the financial assistance provided to patients. If they fail to do so, they may face fines and legal action.
Public health officials say the rules will help clarify hospital practices and address a key question: Where are hospitals missing opportunities to provide financial assistance?
Dr. Anish Mahajan, chief deputy director of the Los Angeles County Department of Public Health, said hospitals should provide financial assistance to patients in need, but “the problem is implementation.” A survey by Dollar For, a national nonprofit organization, showed that less than 30% of patients who could not afford hospitalization said they had applied for and ultimately received financial assistance.
Mahajan said many hospitals are trying to provide assistance, but data shows “there’s just too much medical debt — and it’s borne disproportionately by poor people.”
Los Angeles County officials estimate that the county’s total medical debt will exceed $2.9 billion by 2022, burdening one in 10 adults.
The Department of Public Health has launched an initiative to eliminate medical debt, including purchasing and forgiving existing debt. In June, it earmarked $5 million for a program agreement with nonprofits to eliminate such debt, which county officials estimated would eliminate $500 million in debt for 150,000 residents.
But the county stressed that it also wants to prevent patients from taking on medical debt in the first place. Mahajan said that by aggregating information under the new order, “we can see how well hospitals are doing in getting patients who should receive financial assistance to actually get it.”
For example, the county said it can match data on patients whose medical bills are sent to collections centers to see if they qualify for assistance, and then check back with hospitals about their findings.
“Our goal is to help hospitals do better,” Mahajan said.
The data may also help reveal whether financial aid is failing to reach specific groups of Los Angeles County residents, which could help guide future outreach and public education about aid.
For example, Mahajan said that in some cases, hospitals may have good financial assistance policies, but some patients may be afraid to seek such assistance because of concerns about their immigration status.
Addressing the issues will require not just hospitals but other members of a coalition of counties seeking solutions to medical debt, including legal aid and consumer groups, he said.
Mandatory reporting also allows a medical facility to see if its financial assistance and debt collection practices are outside the norm compared to other hospitals in the area. Public health officials reported that Los Angeles County hospitals received more than $600 million in financial assistance in 2021, but more than half of that came from just four hospitals — which the county operates itself.
These safety-net hospitals “can’t cover the entire county, but they shoulder the bulk of the financial assistance,” said Dr. Naman Shah, director of medical and dental affairs at the Los Angeles County Department of Public Health. “The reason for this ordinance is so we can do better.”
Dr. Elaine Batchol, CEO of MLK Community Medical Center, told the County Commission that her hospital, Willowbrook Hospital, takes proactive steps to assess whether patients need assistance, using software and other tools to check whether they can afford out-of-pocket costs and then Write off If their financial situation is unstable, they will be in debt.
Baquelo said on Tuesday that such financial instruments are “widely available and not difficult to use.”
Los Angeles County will also set up a website where the public can peruse aggregated data on local hospital medical debt, Mahajan said, but is still determining what information will be released.
Hospital Association. Southern California said its members are deeply concerned about the medical debt issue, but the group remains concerned about some aspects of the county’s requirements.
Adena Tessler, the hospital association’s Los Angeles regional vice president, said that in response to hospitals’ concerns, the county has relaxed some rules on how often reports must be provided, but “concerns remain about the volume of the final data required. ”. county.
For example, Tesler said, in some cases, hospitals may not be able to provide information because it was not provided by the patients themselves. Additionally, “the focus on hospitals remains concerning because it is only one part of the medical debt problem.”
Public Health Director Barbara Ferrer said Tuesday that hospitals are the logical place to focus initially because “hospital bills make up the majority of the debt and the largest bill.” Supervisor Janice Hahn added, “Today’s work is not It will stop here” and the county will explore how other entities, including insurance companies and private provider groups, can play a role.
“Hospitals are not the only cause of medical debt,” she said, “but starting there will help us plan.”
Stanford University economics professor Neil Mahoney applauded the effort and said he hopes to expand it to other jurisdictions. “Medical debt is a dark corner of the American health care system,” he said, and shining a light on it can be a “powerful disinfectant.”
Los Angeles County’s requirements only apply to a handful of hospitals in unincorporated areas — county officials estimate the number at seven, including MLK Community Hospital — but local cities can also adopt them to cover their jurisdictions. Hospitals will have approximately six months after the Los Angeles County ordinance takes effect and failure to file reports will constitute a violation.
The hospital association’s Tesler said that because the rules will be rolled out first in unincorporated areas, she hopes officials will take the time to make sure the reporting requirements make sense before expanding such rules to other parts of Los Angeles.
Ferrer said her department will reassess the burden of collecting such data within a year. Given concerns about patient information, she said the portal the hospital uses to provide information when trying to collect debt from individual patients complies with federal laws protecting patient privacy.
Bucklow described in Tuesday’s speech how she helped an uninsured friend who was diagnosed with cancer get the care she needed, only to recently learn that the woman was uninsured again because “she now has the ability to pay off her medical debt.” or pay the premiums for her health insurance—she couldn’t afford both. “
“The root cause of medical debt is the high cost of health care and the inability of health insurance to cover those costs,” the hospital executive said.
To address the problem, she said, “we ultimately need to address these root causes.”
