HAP Report - The Medical Debt Crisis in Indianapolis: A Closer Look

Executive Summary

The Citizens Action Coalition Education Fund (CACEF) and Indiana Legal Services (ILS) began work on the Hospital Accountability Project (HAP) in 2008 to focus on the issue of medical debt within Marion County. The goal of the project is to ensure that the four Marion County nonprofit hospitals earn the tax breaks they receive by providing an adequate amount of free and/or reduced cost care, often referred to as charity care, to uninsured and underinsured citizens.

Hospital debt is a key element of the medical debt problem facing Marion County residents. Over the past two years, HAP has worked to improve Indianapolis nonprofit hospitals' financial assistance policies to ensure that uninsured and underinsured citizens can access hospital care without incurring large amounts of debt by: a) identifying residents with significant hospital debt; b) conducting community meetings to educate these residents of their legal rights and responsibilities as medical consumers; c) dialoguing and negotiating with the hospitals to improve their written financial assistance policies and to increase public awareness about these policies. The Medical Debt Crisis Report, the first issued by HAP, examined how well Marion County nonprofit hospitals are fulfilling their charitable mission. HAP conducted a study from September 2009 through June 2010 and found that health insurance does not necessarily protect one from hospital debt and that half of people surveyed were unaware of financial assistance programs available. These findings support much of what has been reported nationally: in Indiana, hospital charity care is a secret to many patients who are truly in need of safety net services. This demonstrated that improvements must be made and Indianapolis nonprofit hospital financial assistance programs should not be a 'best kept secret."

To challenge the "best kept secret," over the past 18 months, the Hospital Accountability Project has partnered with community organizations and conducted neighborhood meetings where an ILS attorney educated people on their rights and responsibilities as medical consumers. These instructional forums have produced scenarios where people have discovered significant errors in their hospital bills, negotiated arrangements to repay the outstanding debt without aggressive collection actions taken, and in several cases, received financial assistance after attending one of our meetings and knowing what to ask. The HAP staff has also met with key administrators at the county’s nonprofit hospitals to share consumer stories collected at our community meetings and to discuss their financial assistance policies. The Patient Protection and Affordable Care Act (PPACA) made some important changes to laws regarding financial assistance/community benefits and while regulations and details have yet to be issued, this presented an opportune time to provide feedback to hospitals and encourage them to comply with the new law in a way that will most help consumers.

While the hospitals shared their well-intentioned practices and procedures, the lack of knowledge among the public about available help raises the issue of this glaring disconnect between a hospital’s written policy and how that policy is implemented. This is a critically important issue since failure to adequately notify the public and implement the law could lead to revocation of nonprofit hospitals' tax-exempt status.

Overall, these initial meetings were constructive, positive, and were usually met by hospital administrators with open attitudes and a desire to learn more about ways they may be able to improve their policies and procedures to better protect vulnerable consumers. From information received in our face-to-face meetings with hospital administrators and after carefully analyzing the financial assistance policies, our review indicates that IU Health has the most comprehensive written financial assistance policy.

St. Francis Hospital has the dubious distinction of having the least comprehensive financial assistance policy. This is troubling because our interactions with St. Francis Hospital representatives have been disappointing. Perhaps it is because their corporate headquarters are located in Northern Indiana, but our initial meeting with them yielded few answers and little willingness to engage in dialogue about improving their charity care and financial assistance policies. Much of our consumer outreach has been focused on the south side of Indianapolis, St. Francis’ main service area, so we have heard numerous horror stories about their harsh collection practices and failure to provide information about financial assistance to those in need. We are concerned that a lack of local decision-making is preventing St. Francis patients in Indianapolis from getting the help they need.

This second report will examine in detail the four nonprofit Indianapolis hospitals' (St. Vincent Health, Sister of St. Francis Health Services, Community Health Network, and IU Health) financial assistance policies by looking for compliance with the basic provisions under the PPACA and using Community Catalyst’s Patient Financial Assistance Model Act as a guide for best practices that will most benefit vulnerable consumers.

Click here to read the entire report:
The Medical Debt Crisis in Indianapolis: A Closer Look