BUSI 523 Week 2 Discussion Board Forum 1 Replies Example

Discussion Board Forum 1 Replies: Surprise Bills and Hospital Charity Care

BUSI 523 Financial Analysis and Decision Making in Healthcare, Discussion Board Forum 1 Replies

Thread by [Student Name]

The classmates, their hospitals and the patients described are composites; the textbook, Scripture and the peer-reviewed sources cited are real.

Both threads I chose this week followed the chargemaster price into places my own thread only mentioned: the emergency department, where patients cannot shop, and the charity care office, where they are supposed to be protected. Each reply adds evidence on who still pays list price.

Reply to Tasha

Tasha, your thread described the bill your brother received after an evening visit to an emergency department for a broken wrist, with a physician charge of more than $1,900 for a visit Medicare would have paid at a fraction of that amount. You were right to separate the physician's bill from the hospital's, because Harrington (2016) explains that professional fees and facility fees are billed separately and often by different organizations, each with its own charges and contracts. Your brother's case is a clear example of a professional charge set far above what any large payer pays.

National data show that emergency physician services are marked up more than most others. Xu et al. (2017) analyzed Medicare Part B claims for 12,337 emergency physicians at 2,707 hospitals and 57,607 internal medicine physicians at 3,669 hospitals in 2013. Emergency services carried an overall markup ratio of 4.4, meaning charges were 340% above the Medicare allowable amount, compared with 2.1 for internal medicine. Markup ratios for emergency services varied by hospital from 1.0 to 12.6. Uninsured and out-of-network patients, the authors noted, are often billed these chargemaster prices, and emergency patients cannot compare prices before they are treated. That is the setting in which a high markup earns the most. A patient with a broken wrist at 9 p.m. does not ask which physician group staffs the department, whether it participates in her plan or what its charge-to-Medicare ratio is, and she could not change the answer if she did. The market forces that discipline prices for elective care, such as comparison and the ability to walk away, are absent, so the price is set by whatever the group can collect from those who cannot negotiate.

The federal answer was the No Surprises Act, in force since 2022, which protects most privately insured patients from out-of-network bills for emergency care. Murtagh et al. (2026) trace the litigation that followed, as provider groups challenged the law and nearly every rule implementing it. Patient protections largely survived, but the lawsuits weakened the payment benchmark meant to hold down costs and pushed huge volumes of claims into the independent dispute resolution process, which tends to raise payments. Your brother, if uninsured, would also not be fully covered by those protections, since the law's balance billing limits apply to insured patients, though uninsured patients are entitled to a good faith estimate for scheduled care.

One concrete move for your hospital is a review of its contract with the emergency physician group, including the group's charges to self-pay patients and whether it offers the same financial assistance as the hospital. Through Micah, God answered a people who offered extravagant sacrifices by naming what he actually wanted: justice, steadfast love and a humble walk with him (English Standard Version Bible, 2001/2016, Micah 6:8). Justice in billing means, at the least, that the patient who could not choose the doctor is not the one charged the most. Does your hospital's financial assistance policy cover the emergency physicians, or only the hospital's own charges?

Reply to Owen

Owen, your thread argued that chargemaster prices do little harm in practice because nonprofit hospitals are required to offer charity care, and uninsured patients can simply apply. I agree that charity care is the right answer in principle, and Harrington (2016) notes that hospitals write off charity care and bad debt as part of the gap between charges and collections. The difficulty is that charity care rules differ so widely that a patient's protection depends on which hospital she happens to visit.

Messac et al. (2024) built a national database of nonprofit hospitals' charity care policies and found that, among hospitals offering free care, income limits ranged from 41% to 600% of the federal poverty guideline. Many hospitals also considered a patient's assets, a significant minority imposed residency requirements or restricted aid for insured patients and hospitals in counties with less poverty and fewer uninsured residents tended to have more generous policies. In practice, then, the hospitals serving the poorest communities may offer the narrowest charity care, while a patient in a wealthy suburb could qualify at four or five times the poverty line.

Some systems have shown what a broader policy looks like. Abernethy et al. (2025) describe a Johns Hopkins program that helps people who cannot obtain subsidized insurance, mostly immigrants without legal status, gain outpatient specialty care, with bilingual navigators at community clinics. After the system removed noncitizen exclusions from its financial assistance policy in 2020, 6,053 patients enrolled in the program between 2020 and early 2024. That program shows that eligibility rules are a choice an organization makes, not a fixed feature of the law. Federal tax rules require a nonprofit hospital to have a written financial assistance policy and to limit what it charges eligible patients, but they leave the income thresholds, asset tests and application process largely to each hospital's board. A board that never reviews those settings has still made a decision; it has simply made it by default.

For your hospital, I would recommend presumptive eligibility screening, which uses data the hospital already has, such as a patient's address and enrollment in public programs, to grant charity care without requiring a long application. It would also help to measure how many uninsured patients receive a full-charge statement before they are ever offered assistance. The sayings of King Lemuel tell a ruler to judge righteously and plead the cause of those in poverty (English Standard Version Bible, 2001/2016, Proverbs 31:9), and a hospital that holds the data to identify eligible patients is in the ruler's position, so the burden of proving need should not fall entirely on the patient. Does your hospital know what share of eligible patients actually receive charity care, and how that share compares with its neighbors?

References

Abernethy, J., Shaw, K., Martinez, D. A., Vargas, A., Lopez-Bray, C., Lopez-Silva, C., Corty, E. W., Moore, A., Conway, S. J., & Page, K. R. (2025). The Access Partnership: Expanding outpatient health care access for uninsured patients at one academic medical center. Academic Medicine, 100(12), 1464-1468. https://doi.org/10.1097/ACM.0000000000006222

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Harrington, M. K. (2016). Health care finance and the mechanics of insurance and reimbursement. Jones & Bartlett Learning.

Messac, L., Janke, A. T., Rogers, L. H., Fonfield, I., Walker, J., Rushbanks, E., Becker, N. V., & Bai, G. (2024). US nonprofit hospitals have widely varying criteria to decide who qualifies for free and discounted charity care. Health Affairs, 43(11), 1569-1577. https://doi.org/10.1377/hlthaff.2023.01615

Murtagh, L., Rahim, A., & Fuse Brown, E. (2026). Litigating the No Surprises Act: How legal challenges undermined cost containment and reshaped provider payments. Health Economics, Policy and Law. Advance online publication. https://doi.org/10.1017/S1744133126100723

Xu, T., Park, A., Bai, G., Joo, S., Hutfless, S. M., Mehta, A., Anderson, G. F., & Makary, M. A. (2017). Variation in emergency department vs internal medicine excess charges in the United States. JAMA Internal Medicine, 177(8), 1139-1145. https://doi.org/10.1001/jamainternmed.2017.1598