Uncompensated Care for the Uninsured in 2013: A Detailed Examination

Executive Summary
  1. ASPE Research Brief, “The Value of Health Insurance: Few of the Uninsured Have Adequate Resources to Pay Potential Hospital Bills,” U.S. Department of Health and Human Services, 2011.

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Introduction
  1. ASPE Research Brief, “The Value of Health Insurance: Few of the Uninsured Have Adequate Resources to Pay Potential Hospital Bills,” U.S. Department of Health and Human Services, 2011.

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  2. Congressional Budget Office, “Table 1: CBO’s May 2013 Estimate of the Effects of the Affordable Care Act on Health Insurance Coverage,” 2013. http://www.cbo.gov/publication/44176

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  3. Congressional Budget Office, “Table 2: CBO’s May 2013 Estimate of the Budgetary Effects of the Insurance Coverage Provisions Contained in the Affordable Care Act,” 2013. http://www.cbo.gov/publication/44176

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  4. Hadley J, Holahan J, Coughlin TA, Miller D. “Covering the Uninsured in 2008: Current Costs, Sources of Payment, and Incremental Costs,” Health Affairs 27 (5): w399-w415, 2008. http://content.healthaffairs.org/content/27/5/w399.full

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The Cost of Uncompensated Care
  1. For more details see “MEPS HC-138, 2010 Full Year Consolidated Data File” available at http://meps.ahrq.gov/mepsweb/data_stats/download_data/pufs/h138/h138doc.pdf.

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  2. The 2008, 2009, and 2010 MEPS files were the most current data available at the time this research was completed.

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  3. Sing M, Banthin JS, Selden TM, Cowan CA, Keehan SP. “Reconciling Medical Expenditure Estimates from the MEPS and NHEA, 2002,” Health Care Financing and Review 28 (1): 25-40, Fall 2006; Bernard D, Cowan C, Selden T, Cai L, Catlin A, Heffler S. “Reconciling Medical Expenditure Estimates from the MEPS and NHEA, 2007.” Medicare & Medicaid Research Review 2 (4): E1-E20.

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  4. Ibid.

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  5. See National Health Expenditure Projections 2011-2021. Baltimore, MD: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2011PDF.pdf.

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  6. More specifically, indirect sources of uncompensated care include the following MEPS expenditure categories: other private, the Veterans Administration, Tricare, other federal, other state and local, workers compensation, and other unclassified sources.  Other federal includes expenditures on behalf of the Indian Health Service and military treatment facilities. Other state and local includes expenditures on behalf of community clinics, local and state health departments, and other state programs than Medicaid. Other unclassified sources may include automobile or homeowner’s insurance, or other unknown sources. Other private includes expenditures from private insurance companies among individuals that report no private coverage, which may arise due to non-comprehensive health insurance and/or reporting error.

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  7. Among the 15,919 respondents that did not report any health insurance during the year, 1,584 have positive “other public” expenditures. For more documentation on “other public” expenditures, see page C-101 of “MEPS HC-138, 2010 Full Year Consolidated Data File” available at http://meps.ahrq.gov/mepsweb/data_stats/download_data/pufs/h138/h138doc.pdf.

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  8. To accurately capture annual costs, Table 1 is limited to respondents with 12 months of health insurance data. Those with less than 12 months of health insurance data are mostly infants, but may also include those who die during the year and individuals in a particular household who moved out.

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  9. The estimates reported in Table 2 are larger than the corresponding per person amount multiplied by their respective population size reported in Table 1. This is because Table 1 is restricted to nonelderly respondents with 12 months of available health insurance coverage data, while Table 2 includes all nonelderly respondents both those with full insurance information and those with only partial information. In addition, aggregate spending estimates are calculated only for periods of time that people lack coverage. Months during which the part-year uninsured had insurance coverage are not counted.

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  10. As discussed in the methods section and statistical appendix, the MEPS medical expenditure category “other public” equals Medicaid payments among individuals that report zero months of Medicaid coverage.

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Uncompensated Care Provided by Site of Service
  1. GPO. “Congratulating American Dental Association on its 150th Anniversary.” May 2009. http://www.gpo.gov/fdsys/pkg/CREC-2009-05-12/html/CREC-2009-05-12-pt1-PgH5420.htm

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  2. Uncompensated Hospital Care Cost Fact Sheet. Washington, DC: American Hospital Association, January 2013. Patients who are insured may also contribute to a hospital’s bad debt, which would result in an over estimation of the value of uncompensated care for the uninsured. We believe, however, any overestimate that may result from this is offset by other sources of uncompensated care that we were unable to measure.

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  3. Ibid.

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  4. Ibid.

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  5. Despite that much of the care provided by the Veterans Health Administration and the Indian Health Service is through hospitals, we include their spending on uncompensated care in the community-based providers’ category because the AHA excludes federal hospitals such as the VA from its estimate of hospitals’ uncompensated care.

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  6. Table 19: National Health Expenditures by type of Expenditure and Program, Calendar Year 2011. Washington, DC: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group.

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  7. Boukus ER, Cassil A, O’Malley AS. “A Snapshot of U.S. Physicians: Key Findings from the 2008 Health Tracking Physician Survey.” Data Bulletin No. 35. Washington, DC: Center for Studying Health System Change, September 2009. http://www.hschange.com/CONTENT/1078/.

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  8. Berenson R, Zuckerman S, Stockley K, Nath R, Gans D, Hammons T. What If All Physician Services Were Paid Under the Medicare Fee Schedule? An Analysis Using Medical Group Management Association Data. Washington, DC: Urban Institute, March 2010.  http://www.urban.org/UploadedPDF/412051_physcian_service.pdf.

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  9. Inflation based on projected physician expenses from the NHE. This does not exclude the amount of uncompensated care provided by salaried physicians employed by hospitals and clinics.

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  10. Report I: Summary Data from the Physician Practice Information Survey: All Specialties Combined. Chicago, IL: American Medical Association, March 2009, http://www.ama-assn.org/resources/doc/rbrvs/ppi-survey-data-summary.pdf.

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Sources of Funding for Uncompensated Care
  1. Some states also provide Medicaid graduate medical education payments, which are not accounted for in our analysis.

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  2. Medicaid Program; Disproportionate Share Hospital Allotments and Institutions for Mental Diseases
    Disproportionate Share Hospital Limits for FY 2012, and Preliminary FY 2013 Disproportionate Share Hospital Allotments and Limits
    Federal RegisterNotices 78(144 ) Friday, July 26, 2013 http://www.gpo.gov/fdsys/pkg/FR-2013-07-26/pdf/2013-17965.pdf

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  3. An Overview of Changes in the Federal Medical Assistance Percentages (FMAPs) for Medicaid. Kaiser Commission for Medicaid and the Uninsured, July 2013, https://www.kff.org/wp-content/uploads/2013/01/8210.pdf

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  4. Data from unpublished 2011 Urban Institute survey.

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  5.   Ibid.

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  6. CMS-64 Quarterly Expense Report. “Financial Management Report for FY 2011.” http://medicaid.gov/Medicaid-CHIP-Program-Information/By-Topics/Data-and-Systems/MBES/CMS-64-Quarterly-Expense-Report.html.

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  7. An Overview of Changes in the Federal Medical Assistance Percentages (FMAPs) for Medicaid.

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  8. American Hospital Association. Underpayment by Medicare and Medicaid: fact sheet, 2014. Chicago (IL). Available from: http://www.aha.org/content/14/2012-medicare-med-underpay.pdf.

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  9. To be conservative we did not inflate Medicaid underpayments to 2013 because of the uncertainty around Medicaid reimbursement levels and hospital costs.

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  10. Medicare Payment Advisory Commission, Report to the Congress: Medicare Payment Policy,  March 2007, p. 77.

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  11. Report to the Congress: Medicare Payment Policy. Washington, DC: Medicare Payment Advisory Commission, March 2007, p.77.

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  12. March 2012 Medicare Baseline. Washington, DC: Congressional Budget Office, Match 13, 2012, http://www.cbo.gov/sites/default/files/cbofiles/attachments/43060_Medicare.pdf.

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  13. Ibid.

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  14. Centers for Medicare and Medicaid Services. Table 19: National Health Expenditures by type of Expenditure and Program, Calendar Year 2011.

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  15. Center for Medicare and Medicaid Services. “The Nation’s Health Dollar ($2.7 Trillion), Calendar Year 2011: Where It Went.” http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/PieChartSourcesExpenditures2011.pdf

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  16. Expenditures: Veteran Data and Information 2012. Washington, DC: US Dept. of Veterans Affairs, National Center for Veterans Analysis and Statistics, http://www.va.gov/vetdata/Expenditures.asp.

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  17. FY 2013 President’s Budget for the Department of Veterans Affairs Medical Programs. Washington, DC: White House, http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/vet.pdf.

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  18. Estimate from Shen Y, Lee A, Hendricks A, Kazis L. “Veterans’ Health Insurance and Demand for VA Care.” http://gateway.nlm.nih.gov/MeetingAbstracts/102272533.html

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  19. Inflation factor derived from 2013 spending estimate in the Department of Veterans Affairs FY 213 Budget Estimate.

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  20. Indian Health Service Fact Sheet. Rockville MD: US Department of Health and Human Services, Indian Health Service, 2013, http://www.ihs.gov/factsheets/index.cfm?module=dsp_fact_quicklook

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  21. 2012 March Supplement to the Current Population Survey.

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  22. This amount also includes a proportionate share of support costs.  Indian Health Service Budget Request FY 2014. Rockville MD: US Department of Health and Human Services, Indian Health Service, March 12, 2013.  http://www.ihs.gov/BudgetFormulation/documents/FY2014BudgetJustification.pdf

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  23. Indian Health Service Budget Request FY 2014.

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  24. National Rollup Report. FY 2011. Rockville MD: US Department of Health and Human Services, Bureau of Primary Health Care, HRSA Community Health Center Uniform Data System, http://bphc.hrsa.gov/uds/doc/2011/National_Universal.pdf

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  25. Ibid.

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  26. Ibid.

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  27. Ibid. pg. 63

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  28. Ahead of the Curve: The Ryan White HIV/AIDS Program Progress Report 2012. Rockville, MD: US Department of Health and Human Services,  November 2012, http://hab.hrsa.gov/data/reports/progressreport2012.pdf

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  29. Used to be called titles. Systems switched in 2007. This also prevents double counting of funds because Part C and Part D are directed to other various community health programs, including CHCs and the MCHB program.

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  30. Part A Allocations Report for Total Part A Grantees (http://hab.hrsa.gov/data/reports/files/fy12partaallocations.pdf) and FY 2012 Allocation Report for All Grantees (http://hab.hrsa.gov/data/reports/files/fy12partballocations.pdf). Rockville, MD: US Department of Health and Human Services, Health Resources and Services Administration.

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  31. Insurance Status of AIDS Drug Assistance Program (ADAP) Clients, 2011.  Kaiser State Health Facts Online, www.statehealthfacts.org.

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  32. Johnson AJ. The Ryan White HIV/AIDS Program. Washington, DC: Congressional Research Service,  2011, http://www.fas.org/sgp/crs/misc/RL33279.pdf

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  33. Ryan White Program by Part, Funding & Grantees, FY 2012. Kaiser State Health Facts Online,  https://www.kff.org/hivaids/fact-sheet/the-ryan-white-program/

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  34. Distribution of AIDS Drug Assistance Program (ADAP) Budget by Source, FY 2011. Kaiser State Health Facts Online,  https://www.kff.org/hivaids/state-indicator/adap-budget-by-source/

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  35. Federal-State Title V Block Grant Partnership Budget, by Category of Service FY 2013. Rockville, MD: US Department of Health and Human Services, Maternal and Child Health Bureau, HRSA Title V Information System (TVIS), FY 2013, https://mchdata.hrsa.gov/tvisreports/FinancialData/; Number of Individuals Served by Title V, by Class of Individuals. Rockville, MD: US Department of Health and Human Services, Maternal and Child Health Bureau, HRSA, Title V Information System (TVIS), FY 2011, https://mchdata.hrsa.gov/tvisreports/ProgramData/

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  36. Percentage of Individuals Served by Title V, by Source of Coverage. Rockville, MD: US Department of Health and Human Services, Maternal and Child Health Bureau, HRSA, Title V Information System (TVIS), FY 2011, https://mchdata.hrsa.gov/tvisreports/ProgramData/

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  37. Federal-State Title V Block Grant Partnership Budget, FY 2013. Rockville, MD: US Department of Health and Human Services, Maternal and Child Health Bureau, HRSA Title V Information System (TVIS), FY 2013, https://mchdata.hrsa.gov/tvisreports/FinancialData/

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Cost Shifting and Remaining Uncompensated Care Costs
  1. Medpac. Chart 6-22. Change in Medicare hospital inpatient costs per discharge and private payer payment-to-cost ratio, 1987-2010.” p. 82. Medpac: Health Care Spending and the Medicare Program. June 2012.

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  2. Underpayment by Medicare and Medicaid Fact Sheet. Washington, DC: American Hospital Association, December 2010.

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  3. Report to the Congress: Medicare Payment Policy. Washington, DC: Medicare Payment Advisory Commission, March 2001, p.182-186; A Data Book: Health Care Spending and the Medicare Program. Washington, DC: Medicare Payment Advisory Commission, June 2013, p.80-82.

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  4. Report to the Congress, Washington, DC: Medicare Payment Advisory Commission, March 2009, p.57-66.

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Discussion
  1. See Memorandum from Richard S. Foster, Chief Actuary, Centers for Medicare & Medicaid Services, April 22, 2010, available at http://graphics8.nytimes.com/packages/pdf/health/oactmemo1.pdf.  See Letter from Douglas W. Elmendorf, Director of the Congressional Budget Office, to Nancy Pelosi, Speaker, U.S. House of Representatives, Table 5, March 20, 2010.

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  2. Congressional Budget Office. “CBO’s February 2013 Estimate of the Effects of the Affordable Care Act on Health Insurance Coverage.” February 2013.   http://www.cbo.gov/sites/default/files/cbofiles/attachments/43900_ACAInsuranceCoverageEffects.pdf

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Statistical Appendix
  1. For details see “MEPS HC-138, 2010 Full Year Consolidated Data File” available at http://meps.ahrq.gov/mepsweb/data_stats/download_data/pufs/h138/h138doc.pdf.

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  2. M. Sing et al., “Reconciling Medical Expenditure Estimates from the MEPS and NHEA, 2002,” Health Care Financing and Review 28 (1): pp. 25-40, Fall 2006.; D. Bernard et al., “Reconciling Medical Expenditure Estimates from the MEPS and NHEA, 2007.” Medicare & Medicaid Research Review 2 (4): pp. E1-E20.

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  3. For documentation on the NHEA data, see “National Health Expenditures Accounts: Methodology Paper, 2011. Definitions, Sources, and Methods.” available at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/dsm-11.pdf.

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  4. This is apparent from the source of payment totals for workers’ compensation in Sing et al. (2006, table 2 and table 5) and Bernard et al. (2013, exhibit 2 and exhibit 5).

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  5. See “National Health Expenditure Projections 2011-2021” available at http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/Downloads/Proj2011PDF.pdf.

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  6. More specifically, indirect sources of uncompensated care include the following MEPS expenditure categories: other private, the Veterans Administration, Tricare, other federal, other state and local, workers compensation, and other unclassified sources.  Other federal includes expenditures on behalf of the Indian Health Service and military treatment facilities. Other state and local includes expenditures on behalf of community clinics, local and state health departments, and other state programs than Medicaid. Other unclassified sources may include automobile or homeowner’s insurance, or other unknown sources. Other private includes expenditures from private insurance companies among individuals that report no private coverage, which may arise due to non-comprehensive health insurance and/or reporting error.

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  7. See page C-101 of “MEPS HC-138, 2010 Full Year Consolidated Data File” available at http://meps.ahrq.gov/mepsweb/data_stats/download_data/pufs/h138/h138doc.pdf.

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  8. Among the 15,919 respondents that did not report any health insurance during the year, 1,584 have positive “other public” expenditures. For more documentation on “other public” expenditures, see page C-101 of “MEPS HC-138, 2010 Full Year Consolidated Data File” available at http://meps.ahrq.gov/mepsweb/data_stats/download_data/pufs/h138/h138doc.pdf.

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  9. This is a slight deviation from previous work (Hadley et al, 2008), which included the “other public” category. Excluding “other public” in this part of the calculation results in a more conservative estimate of uncompensated care.

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  10. See page C-101 of “MEPS HC-138, 2010 Full Year Consolidated Data File” available at http://meps.ahrq.gov/mepsweb/data_stats/download_data/pufs/h138/h138doc.pdf.

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