There Are Still Huge Disparities in Federal Provider Relief Funding

The Provider Relief Fund created by the Coronoavirus Aid, Relief, and Economic Security (CARES) Act is the biggest source of support for healthcare providers caring for COVID-19 patients. Yet, CARES Act disbursements vary enormously across New York, with little relationship to COVID-19’s burden. Providers in Putnam County, which has had around 1,400 confirmed COVID-19 cases, received the lowest funding: just $1,950 for each confirmed case. Franklin County, which received the highest funding, received $297,000 for each of its 52 confirmed cases. That’s 150 times higher! (Data on provider relief payments can be found here, and data on the number of COVID-19 cases by county here.)

The funding disparity also exists within New York City. Providers in Manhattan received over ten times as much relief funding as those in Queens compared by the number of confirmed cases.

As of August 6, 2020.
Sources: New York State Department of Health and the Centers for Disease Control.

Many of the positive cases identified outside of Manhattan may have resulted in care provided in Manhattan. Yet there is still a huge disparity when comparing the funding by the number of fatalities occurring in each borough, which would reflect differences in the burden experienced by providers. For every patient that died in Queens, providers there received about $126,000 in relief. In Manhattan, providers received $662,000 for every patient that died.

Troubling variation can also be seen at the provider level. The biggest payment, $745 million, went to the NYC Health and Hospitals Corporation. However, that system includes 11 different hospitals – which means it received just about $68 million for each facility. Other hospitals in the top ten appear to be individual facilities, and all received far more than $68 million. New York Presbyterian appears twice – it received $570 million for one of its hospitals in Manhattan and another $160 million for its hospital in Queens. Montefiore Medical Center received $468 million plus additional payments for its hospitals in New Rochelle and Mount Vernon.

Why has this happened?

Provider Relief funding is also meant to replace lost revenue so healthcare providers unable to see patients can stay open, and to cover the costs of testing and treatment for uninsured Americans. But it is still concerning that there is so little relationship between the impact COVID-19 had in different parts of the state and the amount of relief providers received.

The first Provider Relief disbursements were based on hospitals’ patient revenue – which guaranteed that safety-net providers (whose payer mix includes more uninsured patients and more patients covered by Medicaid) received far less funding. Later disbursements attempted to address the initial maldistribution. High Impact payments were distributed based on a threshold of COVID-19 admissions, meant to ensure at least $50,000 for every eligible admission. Another targeted disbursement went to hospitals with low profit margins or surpluses, uncompensated care costs of at least $25,000 per bed, and a Medicare Disproportionate Patient Percentage of at least 20.2 percent. However these additional targeted disbursements clearly fell short.

Federal funding disparities are just one of the reasons safety-net hospitals are under resourced. State policies such as the indigent care pool disbursements and our failure to reach universal health coverage also play a big role. Future relief packages must do something to get relief funding to providers caring for the highest number of COVID-19 patients.

Between 2015 and 2019, New York’s hospitals sued 40,000 New Yorkers who could not pay their medical bills. Hospitals were unable to file new lawsuits against patients for a couple of months during the pandemic. However, a quick look at just the most litigious hospitals shows over 500 cases filed since courts starting accepting civil cases again.

A new map from the Community Service Society (with help from BetaNYC) shows where residents are most likely to be sued by their hospital. Residents of Fulton and Steuben County – areas where patients lack many choices about hospital care – are most frequently sued. In the New York City area Nassau, Suffolk, and Queens County residents are most frequently sued.

What can we do?

  • Read the original report, which provides more data on the lawsuits, which hospitals filed them, how it impacts health equity, and describes measures that New York could take to stop these abuses.
  • Tell your legislators to stop hospitals and debt buyers from taking collection actions against patients during the pandemic. S8365/A10506 would achieve this and more: it would stop interest from accruing on medical debt during the pandemic, permanently cap interest rates on medical debt at the U.S. Treasury rate from the current 9 percent, extend grace periods for insurance premiums, and stop late fees or credit agency reports against members who pay late premiums.
  • Take action on CSSNY’s End Medical Debt campaign and increase support for the Patient Medical Debt Protection Act. The Patient Medical Debt Protection Act was introduced before the pandemic and already has with 34 sponsors in the State Assembly (A08639) and 18 sponsors in the State Senate (S06757). This bill does more to make hospital billing fairer for patients, including requiring a standardized itemized bill and stopping hospitals from charging unfair facility fees that are not covered by insurance.

There is an urgent need for New York to protect patients from unfair billing practices, and the Patient Medical Debt Protection Act does just that: We can’t take another 40,000 patients being sued before we fix this problem.

By Bob Cohen, Policy Director, Citizen Action New York

The COVID-19 pandemic is exposing just how broken the US health care system is, including our inability to control disease outbreaks when many people simply cannot afford basic medical care. Patients should never fear seeking medical care because of cost, but for many New Yorkers that is the reality. And a new report by the Community Service Society highlights one of the worst outcomes for patients who cannot pay their medical bills – lawsuits filed against them by the hospitals they turned to for help. The report, “Discharged Into Debt,” finds that New York hospitals have filed over 30,000 debt collection lawsuits in the past five years. The study only looked at hospitals in 26 of New York’s 62 counties – which means the actual number of lawsuits is much higher.

New York State’s non-profit hospitals have a social mission. Legally, they are charities that pay no federal, state or local taxes and receive a total of $1.1 billion each year from the ICP. As a condition for receiving this funding, hospitals are required to offer financial assistance to patients without insurance.

The report, based on an examination of the New York State Ecourts public database and a sample of hundreds of individual case files, documented a number of abusive practices by New York hospitals. For example, hospitals claimed in legal papers that they were entitled to payment for unspecified items like “miscellaneous” and “ancillary procedures” charges. And, because New York allows hospitals to charge an outrageous 9% interest rate on outstanding bills and to tack on court fees on top of that, the median amount the hospital sued on was $1,900 but the median judgment amount was $2,300. In many cases, hospitals sued patients that were eligible for financial assistance without offering it, as required by law.

The report also found large racial disparities in the treatment of patients that owe medical debt, particularly upstate. In counties like Onondaga (Syracuse), Monroe (Rochester), Albany and Erie (Buffalo), a much higher proportion of people were referred to collections for medical debt in communities of color than white communities.

And, the study documents, patients were almost always totally outmatched by large collection law firms retained by the hospitals. Process servers often illegally serve relatives or co-tenants instead of patients, violating basic provisions of the U.S. constitution and in state laws designed to make sure people have reasonable notice of lawsuits so they can adequately defend themselves. And, 97% of the patients in the study were unrepresented and didn’t even attempt to respond to the lawsuit. The result is often wrecked credit, and unpaid judgments that threaten the financial futures of consumers and their families.

The CSS report adds to the case for passage of the Patient Medical Debt Protection Act (A.8639/S.6757), which addresses some of the most egregious medical billing practices.  Fixing these practices, including lawsuit abuses, is a critical step in fixing our broken health care system and making health care affordable to low and moderate income New Yorkers.

Artwork by Wripley M. Bennet in collaboration with the Transgender Law Center and shared at
https://tdor.co/

Governor Cuomo announced new protections for transgender and gender non-conforming people today in honor of Transgender Day of Remembrance. Transgender and gender non-conforming people live with the burden of violence and discrimination in many parts of their lives, including when they need health care. This discrimination comes from providers, who refuse to provide treatments (whether it’s gender-affirming care or a common cold), and from insurance companies that mischaracterize medically necessary care as cosmetic and refuse to cover it.

New York State’s Department of Financial Services (DFS) has previously prohibited health insurers from excluding gender-affirming care in plans through circular letters and regulations. Despite that prohibition, many transgender or gender non-conforming folks still face barriers accessing gender-affirming care. Procedures like facial feminization and breast augmentation are routinely denied as “cosmetic”, despite the clear and ample medical evidence that such procedures are not cosmetic and have a radical effect in improving quality of life.

As part of the new actions announced today, DFS will codify prohibitions that currently exist as circular letters into regulations. It will work with the Office of Mental Health to review the clinical guidelines plans use to make medical necessity determinations to ensure there are no exclusions for gender-affirming care. It will also work to ensure that external appeal agents, who make decisions when someone appeals an unfair claim with their insurance company, to have experience in transgender health. Finally, DFS will release regulations to clarify that all gender-affirming care is medically necessary to eliminate denials on the basis that the service is cosmetic. New York State will lead by example by ensuring that barriers to gender-affirming care are eliminated from the Empire Plan, which covers over one million government employees.

Are you transgender or gender non-conforming and having trouble accessing health care? Don’t be scared to ask for help! The Community Health Advocates is a free, independent advocacy service that helps people deal with health insurance problems no matter what type of coverage you have – and they’ll even help if you have no coverage! You can make appointments by calling 888-614-5400 no matter where you are in the state.