Georgia - Uncompensated Care Payments for FFY 2023

Today I want to dive into the Uncompensated Care data for hospitals in Georgia. I am curious who the big dawgs are in terms of Uncompensated Care DSH (UC DSH). Also, I want to take a look at what the breakdown is between charity and bad debt expense, which are the two components of Uncompensated Care costs.

A quick overview of what I am looking at…

Hospitals provide a lot of care to patients and sometimes that care goes unpaid. Either the patient is indigent or uninsured or perhaps, just chooses to not pay their bill. What I mean by indigent is that they are needy; low income. These particular patients do not qualify for any governmental programs such as Medicaid. There are generally three types of uncompensated care costs that are reported on the Medicare cost report.

1. Charity Care - programs are hospital specific but generally if a patient is eligible all or a portion of their charges are written off to charity care.
2. Uninsured Discounts - this is also hospital-specific. A hospital can choose to give an uninsured discount to uninsured patients. This is generally just a percent of charges and would leave the patient with some financial responsibility.
3. Bad debt expense - this applies to both uninsured and insured patients. This is more of a hospital accounting procedure where the hospital determines the balance of a patient’s account moves from accounts receivable to bad debt status in their system. The balance is still fully the patient’s responsibility.

The above items are reported on the Worksheet S-10 on the hospital’s Medicare Cost Report. Most of the charges reported have a cost-to-charge ratio applied to them which calculates the hospital’s uncompensated care cost. There’s a set amount of federal funding for this program each year. Based on how much of the hospital’s % of uncompensated care cost as compared to all of the other hospitals in the nation is determines how much of that funding the hospital receives. The idea behind the funding is to try to relieve some of the burden of taking care of uninsured patients.

First, let’s take a look at how much uncompensated care cost each hospital in Georgia reported on their last cost report. Keep in mind, these dollar amounts are not the final audited numbers, so they are subject to change. Also, not every hospital qualifies for UC DSH.

Grady comes out on top. No surprise there. They are the number one trauma hospital in Georgia. Costs for those services are really high. They do provide a large amount of charity care and/or uninsured discounts. Those two figures are reported together on the cost report. Northside Hospital - Atlanta is in second place, but their figure is half of Grady’s.
Scanning the data, I can see that Burke Medical Center (my home town) shows almost nothing for UC cost. Unless the hospital closed, this probably is not accurate. It appears that they generally claim around $2M in UC costs. With them being so small and probably lacking the resources that the bigger hospitals have, I am guessing that they try to get this figure trued up at audit giving them more time to provide accurate data.

Now, let’s take a look at what these hospitals will receive in Uncompensated Care DSH funding for Federal Fiscal Year 2023 (10/1/2022-9/30/2023). I’ve also included the UC costs that were used to determine their share of the funding pool.

Consistent with what we saw with the first table, Grady is receiving the most UC DSH in Georgia with Northside coming in second. On average, about 19.5% of the hospital’s UC cost is covered through the UC DSH program. There are other programs through which the hospitals also can receive funding, so they are not necessarily out the rest of the 80.5%. But these costs will still cause huge budgetary pains.

Musing Revelation

The federal government will pay out 6.87 billion dollars through the UC DSH program for Federal Fiscal Year 2023. Georgia hospitals will receive approximately 220 million dollars of that funding. While this funding is greatly needed, this program alone only covers around 19.5% of the hospital’s uncompensated care cost. Uncompensated care costs continue to be a huge burden for Georgia hospitals as I’m sure it is for the rest of the nation.