Hospital System’s ‘Community Benefits:’ $139 Million

Dec 19, 2012 No Comments by

FRESNO, Calif. – Community Medical Centers provided nearly $139 million in uncompensated services and programs in fiscal year 2011/2012, equivalent to more than 13% of its total expenses, according to the nonprofit hospital system’s annual community benefits report filed with the State of California.

Community has historically spent more on uncompensated community benefits than all other Fresno-area hospitals combined. And, some years, nearly double their combined total.

The “community benefits” figure reflects the costs of services and programs for which the hospital system is not paid. It does not include bad debt.

The community benefits total for 2011/2012 includes charity care, unpaid costs of public programs for the medically underserved (including Medi-Cal and the medically indigent services program – MISP – as part of Community’s contract with Fresno County) and the costs of educating health professionals as part of a longstanding partnership with the Fresno medical education program of the University of California, San Francisco.

By comparison, Community’s uncompensated community benefits for fiscal year 2010/2011 were nearly $134 million.

Community and other California hospitals serving large numbers of Medi-Cal patients have been benefitting from a temporary “provider fee” that pulls in supplemental federal reimbursement. For Community, the provider-fee benefit was $64 million in fiscal year 2011/12 and $51 million in fiscal year 2010/2011. That fee was not designed by lawmakers as a long-term source of reimbursement for hospitals and is expected to end in December 2013.

Community continues to experience additional expenses from its contract with Fresno County. In February 2010 and again in December 2010, Fresno County expanded the eligibility ranges for those seeking MISP benefits. As a result, Community has seen significant increases in the numbers of MISP patients coming for treatment and additional costs for providing care, without any additional recompense from the county.

Last fiscal year, Community provided care to 17,100 MISP, jail inmates and juvenile offenders. Community’s estimated (unaudited) cost for providing this care last year was more than $83 million, which included about $2.5 million in care for jail inmates and juvenile offenders. The county’s payment to Community was $20.7 million. Thus, Community’s estimated shortfall for caring for the county MISP, inmates and juvenile offenders was $62.3 million last year.

Another way to measure MISP volume is in adjusted patient days. Last fiscal year that figure was 25,779 – a 26% increase from the previous fiscal year and a 67% increase from a decade earlier, in 2002.

The combination of the region’s longstanding high jobless rate, the ongoing national economic crisis and downsizing of government services has increased the numbers of patients coming to Community who have little or no ability to pay for their care.

“We are the region’s safety net, and we treat patients regardless of their economic hardships,” said Tim A. Joslin, Community’s chief executive officer.  “The additional costs of the uninsured and those who can’t pay their often high insurance deductibles certainly put a strain on us.”

Joslin said that while federal healthcare reform will provide expanded access to medical care for uninsured Americans, it also will impose cuts in reimbursements to medical providers, hampering patients access to care.  “We’re doing our best to address these challenges,” Joslin said, “in part by continuing to invest in our staff and in technology and by developing new models of care.”

Community operates three acute-care hospitals, including the only combined burn and Level 1 trauma units between Los Angeles and Sacramento, and numerous other health facilities.  It is the region’s largest private employer with more than 6,000 employees, more than 1,300 affiliated physicians and more than 900 volunteers. Community also serves as the region’s safety net, through its 1996 contract with Fresno County.

As a condition for tax-exempt status, nonprofit hospitals such as Community are required by state law to report the uncompensated benefits they provide each year.

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