Floyd Medical Center Straightforward

Indigent Care

Synopsis

Indigent and charity care are integral to the Floyd mission, but providing care to those who cannot afford it is expensive. In 2018, Floyd Medical Center and Polk Medical Center together provided $33.23 million in indigent and charity care to patients who either received free care or paid a discounted rate for their care. In addition, the two hospitals provided $50.68 million in unreimbursed care to Medicaid and Medicare patients. This directly impacts the finances of the organization. While it is a common misconception that Floyd receives tax funds to offset these costs, that assumption is not true. Floyd, then, must generate revenue from other sources to compensate for these expenses and still produce enough revenue to continue the provision of quality health care.

Explanation

Indigent care is the term that describes the medical services that health care organizations provide to uninsured, low-income patients. The factors that determine who qualifies for indigent care vary by state. In Georgia, individuals who live in a family whose combined income falls below 125% of the federal poverty level qualify for indigent care. The federal poverty level is scaled based on family size.

Charity care is the term that describes the medical care services provided to low-income patients at a discounted rate. Charity care policies are left to the discretion of individual hospitals. Currently, at Floyd Medical Center, hospital charges are discounted on a sliding scale for patients whose combined family income falls below 325% of the federal-poverty level but is more than 125% of the federal-poverty level. For example, an uninsured individual living in a family of four in Georgia with a total annual family income of $37,650 would be eligible for a charity care discount of 80% of their hospital bill.

Medicaid and Medicare are government-funded medical coverage programs for qualified individuals. While neither of these are counted as indigent or charity care programs, each is also a factor in health care finances, as neither of the programs pays the full cost for medical services.

Not-for-profit community hospitals are committed to ensuring that medical care is available to every individual, regardless of his or her ability to pay, but the cost of providing that care is the same as the expense of caring for patients who have insurance or government-funded medical coverage. The financial challenge for not-for-profit hospitals is to balance the expense of providing medical care to those who cannot afford to pay for their health services against the need to generate enough revenue to compensate employees, purchase equipment and supplies and pay utility and maintenance costs.

Some Georgia counties allocate taxes to help pay for indigent care in their counties to help offset the expense or providing free care to patients. This is not the case in either Floyd County or Polk County. Rather than depend on local taxes to help with these expenses, hospitals turn to financial strategies that include looking for opportunities to increase patient volume for services that are profitable and eliminating waste across all operations. Hospitals that fail to generate the revenue necessary to cover the expense of caring for indigent, charity and insured patients lose money, putting jobs and quality at risk.

Relevance to Floyd

Floyd Medical Center is the largest provider of indigent and charity care in Northwest Georgia. While most Floyd Medical Center patients have medical coverage either through their employers or government programs such as Medicare and Medicaid, nearly one fourth of Floyd Medical Center patients either do not have medical coverage or cannot afford to pay the full cost of their medical care. Each year Floyd Medical Center provides indigent and charity care services to more than 40,000 patients. The actual cost to provide this level of indigent and charity services to patients was $33.23 million.

Although some non-for-profit, safety-net hospitals in Georgia receive tax support for indigent and charity care from their local city or county government, Floyd Medical Center receives no tax support from either the Rome City or Floyd County governments. Therefore, Floyd had to generate $33.23 million in net revenue last year just to cover the cost of uncompensated indigent and charity care provided at Floyd Medical Center. And, Floyd had to generate $50.68 million in net revenue last year to cover the expense of providing care to Medicaid and Medicare patients. This comes from the revenue generated by care provided to insured patients. In fiscal year 2018, Floyd received $396.5 million in total patient service revenue and $2.3 million in non-operating income and investment gains, with total expenses, including those for indigent and charity patients, of $379.3 million. Thus, Floyd had net operating income of around $17.2 million.

As the demand for services grows, Floyd relies on its net operating revenue and investment income to purchase new equipment, renovate facilities, expand or start new programs and to provide benefits and pay to employees. The expense of providing uncompensated care to indigent, charity, Medicare and Medicaid patients impacts the financial capacity of Floyd Medical Center to meet the increasing health care needs of Floyd County and surrounding areas.

Related Resources

Georgia Hospital Association Hospital 101 Resource Guide

Community Service: Indigent Care

2017 Annual Report

2017 Floyd Community Benefit Report

2017 Polk Community Benefit Report

2017 Floyd Healthcare Management Inc. Audit

2017 Polk Medical Center Inc. Audit

Floyd Medical Center Financial Assistance Policy

Floyd Cherokee Medical Center Financial Assistance Policy

Polk Medical Center Financial Assistance Policy

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