Patients drowning in debt, aid policies fail 

Hospital Accountability Project consultant Julia Vaughn at a Wednesday press conference holds nearly 100 consumer complaints about St. Francis.
  • Hospital Accountability Project consultant Julia Vaughn at a Wednesday press conference holds nearly 100 consumer complaints about St. Francis'.


Non-profit hospitals in Indianapolis are — in many instances — failing to meet their obligations to patients who qualify for financial assistance. And public health advocates are calling on state officials to investigate.

At issue is how well the four local nonprofit hospitals — IU Health, St. Vincent Health, Community Health Network and Sister of St. Francis Health Services — develop and implement the financial assistance policies they are required to maintain by federal and state law.

In short, a new report released Wednesday by the Hospital Accountability Project found some comply better than others, but all could improve their efforts to make people aware of available financial assistance. The project builds on previous research findings that — regardless of whether people have health insurance — hospital-related debt is a major driver of foreclosure and bankruptcy problems across the country.

“At best, the inadequacies in the Marion County nonprofit hospitals’ charity care programs prevent them from completely fulfilling their charitable missions,” the report concludes. “At worst, they are disregarding the law and IRS regulations, cheating taxpayers and putting their nonprofit status at risk.”

Stephen Byers, managing attorney for Indiana Legal Services, sees too much unnecessary financial hardship caused by peoples lack of awareness about financial assistance programs.
  • Stephen Byers, managing attorney for Indiana Legal Services, sees too much unnecessary financial hardship caused by people's lack of awareness about financial assistance programs.
Research and community outreach efforts uncovered “countless horror stories” of people being hounded by creditors but never advised of their rights to financial aid through the hospitals, Stephen Byers, managing attorney for Indiana Legal Services, told reporters at a press conference upon the reports release.

Medical-related debt is the no. 1 cause of Chapter 7 bankruptcy, he said, noting that many such cases could be avoided if people were aware of charity care options.

Charles Melton, a retired house painter with bronchitis and emphysema, and his 70-year-old wife struggled to pay off his $7,000 balance to St. Francis in increments of $100 and $200.

“Not one time was charity care mentioned — not one time,” Melton told reporters.

Once he became aware of charity care, he said he is encountering endless runaround in his quest to see his request through the application process.

The project also identified numerous instances in which people in need of medical care do not seek it because of the misguided belief that their inability to pay for the services precludes treatment. When cash-strapped patients do obtain care, the report found it common for them to be trapped in bureaucratic black holes where the policies meant to assist them are obstructed while more draconian collections policies are employed.

After the report’s release, project organizers called on Indiana Attorney General Greg Zoeller to investigate complaints identified through the project, specifically the nearly 100 complaints leveled at St. Francis. They also requested that Zoeller make a public call for people to come forward with similar complaints before determining an appropriate response.

As part of the hospitals’ nonprofit service mission, they are required to provide medical services to all people, regardless of their ability to pay. Nonprofit hospitals are supposed to post their financial assistance policies in high-traffic areas such as emergency rooms and hospital admissions waiting areas.

The report outlined several suggestions that hospitals may employ to address the “glaring disconnect” identified between the conceptualization and actualization of these institutions’ written financial assistance policies. These suggestions include screening incoming patients for financial aid eligibility and assisting those who are qualified in completing the application process.

“Through front-end screening, aggressive notification and implementation, and assistance with the application process hospitals will become more efficient with their resources and patients will avoid unnecessary hardship,” the report notes.

Having effective policies is an important step, but training the staff to implement those policies is what makes the real difference in effective patient care.

The report’s authors note that hospital administrators were usually open to discussions about how to improve their policies and practices.

In the case of Community Health, this openness translated to their public comments on the project, as well.

“We are fundamentally supportive of what IHAP is trying to accomplish and believe that a cooperative working relationship is of value to the patients we serve,”said Tom Fischer, Community's chief financial officer, in an emailed response to a request for comment.

“Community Health Network strongly supports transparency in our mission, including the emphasis on making our financial policy easily available and accessible to all consumers of health care.”

St. Francis Health Services, however, did not demonstrate such openness to the project, leading organizers to question whether the hospital's out-of-town corporate headquarters might be responsible for “disappointing” interactions between project leaders and hospital staff at the local level. This disconnect also translated to the hospital's communication of its assistance policies to qualifying patients.

“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,” the report notes. “We are concerned that a lack of local decision-making is preventing St. Francis patients in Indianapolis from getting the help they need.”

On the flipside, the report recognizes IU Health as having the most comprehensive written financial assistance policies.

And while the authors identify areas of possible improvement for all hospitals, they also note that with the policy revisions necessitated by passage of the federal Patient Protection and Affordable Care Act, the timing is ideal for administrators to consider and act upon the report’s findings.

The law carries greater reporting requirements for hospitals to make public information on their debt collection and financial assistance policies. Reports containing information such on charity care and how much bad debt hospitals must contend with will be considered during regular federal reviews of nonprofit hospitals community benefit activities.

Project director Lindsay Helmbock and aggrieved consumer Charles Melton on Wednesday delivered complaints about St. Francis to the Indiana Attorney Generals Office.
  • Project director Lindsay Helmbock and aggrieved consumer Charles Melton on Wednesday delivered complaints about St. Francis to the Indiana Attorney General's Office.
“We would like to continue having open discussions and dialogue with the hospitals,” said Lindsay Helmbock, the project’s director. “We think we’ve made some progress.

“It’s important for consumers to get the help and assistance they need, especially with the economic hardships they’re going through during this recession.”

Helmbock noted a palpable sense of anger during public outreach meetings from people unaware of the existence of financial assistance — even for underinsured people not on public assistance and with incomes of up to 400 percent of the federal poverty level.

During these meetings, project organizers helped people to discover billing errors, avoid collections headaches through negotiated payments arrangements with hospitals and gain financial assistance by helping to explain the services that are available but may not be fully understood.

The success of such meetings may serve as inspiration for hospitals as they consider community future outreach efforts, Helmbock said, suggesting that getting out to meet with community members could provide an excellent opportunity for nonprofit hospitals to comply with rules requiring them to assess community needs.

Of all local hospitals were contacted for comment on this story, only Community was able to respond within 24 hours.

The Hospital Accountability Project is a joint effort between the Citizens Action Coalition Education Fund and Indiana Legal Services. Community Catalyst provided the funding as part of a nationwide effort engage communities in health planning and help people avoid financial ruin driven by overwhelming health care costs while enabling access to needed care.

The full reports associated with the Hospital Accountability Project in Indiana are posted at the CACEF website.

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Rebecca Townsend

Rebecca Townsend

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Rebecca Townsend served as NUVO news editor from May 2011 to August 2014. During a 20-plus year career, her bylines have appeared in publications ranging from Indiana AgriNews to the Wall Street Journal. Her undergraduate degree is in sociology and anthropology from Earlham College, and her master's is in journalism... more

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