• Individual or family income, which may take into account family size, geographic area, and other pertinent factors. Individual or family income generally is not the exclusive criterion for determining the appropriate amount of charity care.
  • Individual or family net worth, which considers liquid and non liquid assets owned, less liabilities and claims against assets. It should be noted that when from the patient, it is useful to clarify whether this information will be used solely to determine eligibility or whether the assets would be considered as a possible source of payment.
  • Employment status criteria should consider the likelihood of future earnings sufficient to meet the healthcare-related obligation within a reasonable period of time.
  • Other financial obligations, for example, living expenses and other items of a reasonable and necessary nature.
  • Amount and frequency of healthcare bills, or the potential for medical indigence (sometimes referred to as medical hardship), must be considered in relation to all the other factors outlined above. The history of service and the need for future service by the institution or other providers may be considered. In these cases, a separate determination of the amount of charity care for which a patient is eligible is made on each occasion of service, or regular confirmation of eligibility is made during extended programs of service.

Other financial resources available to the patient, such as Medicaid and other public assistance programs, will affect the determination of the appropriate amount of charity care.

Excerpted from "P&P Board Statement 15: Valuation and Financial Statement Presentation of Charity Care and Bad Debts by Institutional Healthcare Providers, HFMA, December 2006.

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Publication Date: Thursday, June 05, 2008