Fletcher Allen Health Care has revised its charity care policy to comply with new IRS rules with the result that some uninsured or underinsured patients will have to pay more for care they receive at the state's largest hospital.
The policy change comes in response to new IRS requirements that are part of the Affordable Care Act (ACA) for hospitals to keep their nonprofit status, according to Shannon Lonergan, Fletcher Allen's director of registration and customer service.
A recent New York Times story, which mentioned Fletcher Allen, said the policy changes are meant to encourage people to purchase insurance through the ACA-mandated exchanges.
Lonergan said the new IRS rules are more prescriptive in how discounts can be calculated, and Fletcher Allen's old policy, despite being more generous than required, did not comply with the rules' language.
Fletcher Allen typically provides $7.9 million in charity care annually, according to figures from the hospital. It reported more than $900 million in revenue on its 2012 tax filing.
Fletcher Allen will provide discounts to the uninsured and underinsured based on income.
The change, implemented April 1, will not affect people below 200 percent of the federal poverty line, that is those earning $47,700 or less for a family of four or $23,340 or less for an individual. Services for people with those incomes are free.
People earning between 201 and 400 percent of the federal poverty line will pay a percentage of their bill, rather than a fixed fee of up to $1,000. The discounts range from 55 to 85 percent depending on income, with lower income people getting steeper discounts.
The hospital modeled what people who received charity care in the year prior to the new policy's implementation would pay now and found that 70 percent would be unaffected.
If the cost still imposes a financial hardship, patients can appeal to the hospital for further reductions to their bill. Lonergan did not have figures for how often those appeals are successful, but said it happens more often than not.
Patients with income that makes them ineligible for charity care can also apply for financial assistance if they face catastrophic medical bills that can result from expensive cancer treatments, severe bodily injuries or other serious illnesses. If a person's medical bills amount to 30 percent of their household income they can apply for assistance, Lonergan said.
Fletcher Allen's charity care policy is comparable to or more generous than other large nonprofit academic medical centers, said Mike Noble, the hospital's director of communications.