Wisconsin shelled out $1.1B for uncompensated care in FY17
Wisconsin hospitals lost $1.1 billion on uncompensated care in fiscal year 2017, according to a Wisconsin Hospital Association report. This marks a 14% increase in charity care and bad debt from 2016's sum of $994.2 million.
Some $583.4 million of the total went to bad debt, with the remainder toward charity care. The report, which analyzed fiscal and patient data from 150 Wisconsin hospitals, found that the group provided uncompensated healthcare services to about 1.5 million patients.
Milwaukee County hospitals were most adversely affected, accounting for almost 30% of the unpaid total.
Uncompensated care costs have increased steadily every year from 1990 to 2013, according to data from the American Hospital Association. At the peak in 2013, hospitals were on the hook for $46.4 billion, dropping to $38.3 billion in 2016, the last year for which AHA has data.
Implementation of the Affordable Care Act spurred a big drop in the uninsured population in all 50 states and led to a corresponding drop in uncompensated care. Between 2013 and 2015, uncompensated care as a share of hospital operating expenses fell by 30% and tallied up at $35.7 million in 2015, its lowest point in seven years.
Despite declining rates of uninsured U.S. citizens under the ACA, bad debt proved a persistent problem to stamp out completely — and even more so now as the Trump administration and Republican leadership seek to roll back key elements of the law. The uninsured rate is once again climbing as the current administration works to undermine the ACA, and uncompensated care is rebounding as well.
And CMS began a three-year phase-in for a new way of reimbursing hospitals for uncompensated care on Oct. 1. Now, hospitals need to provide the government with patient-level details of services rendered, along with total uncompensated care totals. In the past they were paid solely on a headcount basis which, according to hospital execs, was easier but not as accurate.
Fewer uncompensated care payments will cause problems for hospitals as they continue to deal with razor-thin margins. Hardest hit will be hospitals in states that didn't expand Medicaid, such as Wisconsin, which underwent a partial expansion to cover adults only up to 100% of the federal poverty level.
Uncompensated care hasn't exceeded $1 billion in the state since 2014, and advocates for Medicaid expansion warn such costs will only rise as coverage shrinks.
Although the WHA didn't attribute specific reasons for the rise in uncompensated care costs in the report, another factor may be in health insurance plan designs that shift costs to patients, Brian Potter, senior vice president of finance at WHA told Healthcare Dive. "Coverage is only part of the reimbursement puzzle," he said.
Like other states, Wisconsin is attempting to lower premium costs by subsidizing high-cost medical claims.
In late July, Gov. Scott Walker announced the state's $200 million reinsurance plan had been approved by the federal government. His office predicts an average premium decrease of 3.5% over the next year, although critics warn the program will do little to address foundational reasons people can't pay for care.
Another potential contributor is that most hospitals in Wisconsin are nonprofit, Potter said, and it's part of their mission to provide care regardless of a patient's ability to pay.
And the onus for ameliorating rising uncompensated care costs lies on all parties, especially for cutting down on bad debt. Potter recommended that hospitals be transparent and upfront with pricing and patients know their obligations, coverage and whether they're eligible for charity.