U.S.-Mexico Border Counties Coalition Releases Report on the Cost of Unreimbursed Hospital Care...

IMMIGRANTS & PUBLIC BENEFITS

Health Care

U.S.-MEXICO BORDER COUNTIES COALITION RELEASES REPORT ON THE COST OF UNREIMBURSED HOSPITAL CARE TO UNDOCUMENTED PERSONS
Immigrants' Rights Update, Vol. 16, No. 7, November 22, 2002

A private group representing counties along the southwestern U.S.-Mexico border has conducted a study of the costs incurred by those counties in providing uncompensated healthcare. The U.S./Mexico Border Counties Coalition, which commissioned the study with funds secured by Sen. John Kyl (R-AZ), released its report in Sept. 2002. Although the study's researchers acknowledge that U.S. citizens and lawfully present persons receive most of the services that go uncompensated, they chose to focus on undocumented recipients.

The report concluded that 25 percent of unreimbursed emergency medical costs incurred by the 24 counties that touch the Mexican border were due to undocumented immigration. The researchers estimated the cost as approximately $190 million a year, plus an additional $13 million for emergency transportation. However, as explained below, a number of questionable assumptions and omissions informed the researchers' approach, casting doubt on the validity of some of the study's findings.

The researchers used two different methodologies in developing their report. First, they attempted to survey 77 hospitals and 82 emergency medical services (EMS) providers through a written instrument, followed by in-person interviews. Only 14 hospitals and 15 EMS providers returned the surveys. This rate of response cannot yield statistically valid results, but the researchers considered the responses they did receive helpful in understanding "the nature and scope of the problem." The survey asked hospitals about the number of patients who did not have (or did not provide) Social Security numbers (SSNs) and the study used that figure as a proxy for undocumented status. Hospitals were also asked to estimate the amount of charity care and local indigent health care funds used to serve undocumented persons, as well as the "bad debt" they incurred in serving such individuals. EMS providers were simply asked to estimate the amounts of bad debt and reimbursements they could attribute to undocumented persons.

Not surprisingly, the field researchers found that respondents had difficulty estimating the percentage of undocumented persons among the patients they served. Many hospital respondents said they did not know their emergency room patients' immigration status because the federal Emergency Medical Treatment and Labor Act (EMTALA) prohibits them from asking about it. When pressed for estimates, which varied from 5 to 80 percent, hospital officials made them on the basis of their knowledge of the service area and "a gut reaction from experience in the institution."

The second methodology used a ratio of uncompensated care to revenues for each hospital. These ratios were compared with the uncompensated care-to-revenue ratios of hospitals in a set of 107 nonborder counties selected for their similarity to the border counties in terms of "essential characteristics . . . with respect to the demand for emergency services." Factors examined included the percentage of people in poverty, median age of the populations served, income, and domestic and international migration. No variables related to rates of health insurance coverage were included.

The validity of making such a comparison is questionable. As the researchers themselves note, the counties on the U.S.-Mexican border are "strikingly different" from most other counties in the U.S. The researchers point out that the percentage of persons identified as Latino in border counties far exceeds the national average. However, they excluded other counties with large Latino populations from their counterfactual examples, explaining that "[i]ncluding a highly Hispanic nonborder county in a counterfactual set will bias the final calculation of excess uncompensated costs borne by border counties downward. This is true to the extent that the percent[age of the overall population in border counties made up by the] Hispanic population is positively correlated with the presence of undocumented immigrants. . . ."

In addition to presupposing a correlation between the presence of undocumented persons and the demand for uncompensated care, this reasoning ignores other critical facts. According to the Pew Hispanic Center, all Latinos, including citizens and lawfully present immigrants, are significantly less likely than other ethnic groups to have health insurance and suffer above-average rates of certain chronic and infectious diseases. (In its Fact Sheet, Hispanic Health - Divergent and Changing, the Pew Hispanic Center details findings from the 2000 Census, which show that 33.2 percent of Latinos have no health insurance, compared to 10 percent of non-Latino whites and 19 percent of African-Americans. Among low-income communities, 43.7 percent of Latinos are uninsured, compared to 25.5 percent of non-Latino whites and 26.2 percent of African-Americans who are poor.) As noted above, the researchers did not include rates of health insurance coverage among the variables used to identify like counties, despite the direct relationship between insurance coverage and the need for uncompensated care.

The researchers also acknowledge that residents of border counties suffer some of the most extreme poverty in the U.S. They fail, however, to acknowledge the poor state of border counties' basic infrastructure for clean drinking water and sanitation, and its effect on the spread of contagious disease and the demand for emergency medical services.

As the researchers point out, the costs of providing uncompensated care have effects that extend beyond the reduction in hospital revenues, including increased insurance costs and threats to the viability of safety net providers. Helping hospitals meet their charity care obligations is in everyone's interest. Towards that end, the researchers summarized the study's conclusions in an eight-point list of findings and offered a corresponding list of recommendations. Some of the recommendations are useful, such as the suggestions to liberalize certain Medicaid reimbursement policies and to increase federal funding to reimburse providers for serving undocumented patients. But the researchers also make other suggestions that may cause greater harm, such as the recommendation to use a person's lack of an SSN as a proxy for undocumented status. Useful or not, all of the study's suggested solutions focus on compensating border states for providing services to undocumented persons. This emphasis will likely produce policy changes that fall short of the mark.

As the American Hospital Association testified before the Federal Trade Commission in Sept. 2002, hospitals face a challenging operating environment. Hospital costs have risen in recent years, due to factors that include workforce shortages, increased professional liability premiums, and the cost of funding advances in medical science. Medicare and Medicaid reimbursement rates have declined relative to inflation. These rates will decline further unless Congress reverses scheduled reductions in the Disproportionate Share Hospital program, which provides funding for those reimbursements. Private providers have also become increasingly demanding and sophisticated in devising contracts with the government to provide hospital services. At the same time, many nonprofit hospitals are facing increased competition from for-profit specialty care providers, which are taking profitable lines of business away from community hospitals without providing community access to unprofitable services like emergency departments. This trend was reported in a New York Times article of Oct. 30, 2002, "Hospitals Battle For-Profit Groups for Patients."

While additional funding for unreimbursed emergency services would benefit the hospitals that received it, simply increasing federal support to border hospitals for services to undocumented persons amounts to placing a small patch on a large and complicated problem. Such proposals look past both the needs of hospitals throughout the country and the unreimbursed care provided to citizens and lawfully present immigrants, who received a substantial majority of the unreimbursed care reported by the researchers. A better solution would be to expand the scope of emergency Medicaid to cover more of the low-income uninsured population, in every state and without regard to immigration status.

As the researchers explain, emergency Medicaid covers emergency medical services delivered to persons who would be eligible for Medicaid except for their immigration status. In order to qualify for Medicaid, a person must fit into an eligibility category, as well as meet income and residency requirements. The eligibility categories generally include children, pregnant women, indigent families with children, and the aged and disabled. Thus, a hospital cannot receive emergency Medicaid reimbursement for services to a low-income childless, able-bodied adult, whether she is a new migrant at the border or a citizen living on the streets of Chicago.

Expanding the scope of emergency Medicaid in the manner described above would also eliminate the need to identify persons as undocumented in order for providers to receive reimbursement. The researchers' suggestion that identifying undocumented persons be accomplished by using SSNs as a proxy for undocumented status raises privacy concerns. This practice could deter persons with immigration concerns from seeking needed medical treatment.

The researchers also note that undocumented persons often fail to complete the emergency Medicaid application. In addition to being encouraged to implement presumptive eligibility more widely, as the researchers recommend, states should be provided incentives for simplifying their Medicaid application processes.

The researchers' decision to focus on undocumented immigrants as the source of funding and resource problems affecting public and private hospitals reflects a recent trend among some members of Congress. As noted previously, the Border Counties Coalition study was conducted at the behest of Sen. Kyl. In addition, Rep. Mark Foley (R-FL) has asked the General Accounting Office to conduct a study "on the financial impacts of illegal immigrants on our nation's hospital system," and even the Congressional Hispanic Caucus has asked for a similar report. On the news Web site CNSnews.com, Foley was quoted as saying on July 21, 2002, that the U.S. health care system must be "inoculated against the parasitic effects" of undocumented immigration "before we can no longer afford to take care of Americans."