Charity Care: Less Self-Pay, Charity Care in Expansion States

Hospitals in states that expanded their Medicaid eligibility under healthcare reform had reductions in their average charity-care spending and selfpay rates, according to a new study.

The study of monthly financial and volume data for 465 hospitals in 3o states was conducted by the Colorado Hospital Association.

"This study provides more evidence of the financial impact on hospitals of state decisions regarding Medicaid eligibility expansion," says Chad Mulvany, director, healthcare finance policy, strategy and development for HFMA. "These financial effects will only increase as the disproportionate share hospital payments cuts included in the Affordable Care Act continue to roll out."

In the first quarter of 2014, which coincided with the beginning of coverage expansions in both government-run marketplaces and Medicaid through the ACA, both charity care and self-pay patients were reduced in states that opted to expand Medicaid. Compared with the first quarter of 20i3, expansion states had a 3o percent reduction in charity care per hospital, to $1.9 million from $2-8 million. Similarly, total self-pay charges declined 25 percent as a share of total charges in expansion states, to 3.1 percent from 4.7 percent, according to the study. In non-expansion states, average charity-care spending increased slightly between the two quarters, from $3.8 million to $4.2 million. The share of self-pay charges at nonexpansion-state hospitals increased from 4.8 percent to 5 percent.

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