Uncompensated care costs hospitals $41.1B in 2011

The cost of uncompensated care to U.S. hospitals totaled $41.1 billion in 2011, according to the American Hospital Association (AHA). That was almost $2 billion more in bad debt and charity care costs than was posted in 2010.

The AHA annually aggregates data on care provided to patients for which hospitals receive no payment as part of its Annual Survey of Hospitals. The survey includes all types of hospitals and defines uncompensated care as bad debt plus charity care costs.

AHA considers bad debt to be unreimbursed services for which the hospital had expected to receive payment from a patient or insurer but didn’t, and charity care costs typically to be services that the hospital never expected payment on because it determined before billing that the patient was not able to pay. The AHA’s uncompensated care figures do not include underpayments from Medicare and Medicaid, nor do they account for community services and programs or efforts to provide financial assistance to patients with limited incomes.

Based on data from 4,973 registered community hospitals, the AHA calculated uncompensated care costs of $41.1 billion in 2011, or 5.9 percent of total expenses. Costs in 2010 totaled $39.3 billion, or 5.8 percent of total expenses.

The AHA has tracked uncompensated costs since 1980, when unreimbursed costs added up to $3.9 billion, or 5.1 percent of total expenses. The $41.1 billion figure is the highest total amount recorded since 1980, but it is not the largest percentage of total expenses. In 1986, hospitals reported uncompensated costs totaling $8.9 billion, or 6.4 percent of total expenses.

The AHA released its fact sheet on uncompensated hospital care costs in January.