Public Health and Health Planning Council Poised to Release Charity Care Report

The Public Health and Health Planning Council (“PHHPC”) is poised to release a report prepared by the Ad Hoc Advisory Committee on Freestanding ASCs and Charity Care (the “Committee”). The report, which has been discussed at previous PHHPC meetings and is now in its final form, details the difficulties ambulatory surgery centers often have in meeting their charity and Medicaid caseload requirements, and how PHHPC can measure ASCs’ compliance.

10 NYCRR § 709.5 requires ASCs to provide charity care and services to the underserved, though the regulations do not set specific requirements. PHHPC, however, has generally required a minimum charity care (services where reimbursement is not sought) level of two percent, and a Medicaid level of five percent. The report states that though in some cases ASCs exceed their projected Medicaid levels, ASCs approaching their five-year limited life certification period often fall short of both their charity and Medicaid goals.

PHHPC and the Committee held multiple hearing to discuss the report and solicit comments from stakeholders before finalizing it. Comments from stakeholders discussed some of the intrinsic issues in meeting PHHPC’s charity care requirements, including a disproportionate share of Medicare beneficiaries in a patient population, difficulty working with managed care plans, and a reduction in charity cases due to expanded healthcare coverage caused by the Affordable Care Act. Based on these variable factors, and the general ambiguity in the regulations, the report calls on PHHPC to more holistically assess each ASC’s efforts to provide Medicaid and charity care based on factors including the ASC’s services, the organization and delivery of healthcare in the ASC’s service area, and the distribution of insured, uninsured, and Medicaid patients in the community.

The report recommends that PHHPC consider charity care requirements both prospectively and retrospectively. Prospectively, the report calls for a freestanding ASC’s Certificate of Need Application to include two contracts (or letters of intent if the ASC cannot secure an executed contract) with Mediciad managed care plans, documentation of meetings and other contact with Federally Qualified Health Centers, provider associations, advocacy groups for the underserved, DSRIP Performing Provider Systems, and similar entities to bring about collaborative arrangements to promote charity care, and a staffing plan for staff to conduct outreach to underserved groups, develop referral arrangements with FQHCs and other primary care providers, and navigate patients through scheduling, surgery, and follow-up. Applicants would still need to report a proposed volume of charity care, which PHHPC will review that proposed volume in light of the above-mentioned factors.

Retrospectively, at the end of the ASC’s five-year limited life approval period, the report suggests that PHHPC analyze those ASCs that have failed to meet their charity care caseloads projected at the time of application and see if those initial targets are still applicable in light of changes to the healthcare system both state-wide and locally. In so doing, the report considers factors ranging from the effects of the Affordable Care Act and DSRIP to succeeding in enrolling uninsured patients in Medicaid upon their encounter with the ASC. Other factors enumerated in the report that may mitigate an ASC’s failure to reach its Mediciad and charity care targets include: (i) a preference by FQHCs and primary care providers in the service area to use other arrangements for surgical services; (ii) higher than expected growth in Medicaid coverage in the area; (iii) outreach activities by the ASC to publicize its services (even if such outreach is not particularly fruitful); (iv) consolidation of surgical services into DSRIP program PPS’s to which the ASC has been unable to enter; and (v) compensation for low charity care cases, including servicing a higher than expected volume of Medicaid patients, incurring a high percentage of bad debt attributable to high co-pays and deductibles under certain Affordable Care Act policies, and enrollment of would-be uninsured patients in Medicaid.

The Committee further suggests that the Department of Health report to PHHPC annually on the Medicaid and charity care efforts to date of all ASCs within three years of the end of their five year limited-life certification to further promote a culture of compliance with the ASC’s targets.

While the report takes a tempered approach in recognizing that an ASC may undertake significant and appropriate efforts to reach its charity and Medicaid goals but still fall short not necessarily through its own fault, ASCs currently in their limited-life certification and those looking to apply for a CON in the future will have to undertake more significant steps than in the past to ensure that its Medicaid and charity care requirements are being met. The report is expected to be presented by the Committee and approved by PHHPC this week.