MN hospitals see big drop in unpaid bills for care

Minnesota Hospitals in 2014 saw a 6 percent drop in "uncompensated care," services for which they aren't paid. Minnesota officials believe that's tied to more people having health insurance through MNsure.

The Minnesota Department of Health looked at uncompensated care between 2013 and 2014, the first year in which Minnesota implemented many of the major coverage provisions of the federal Affordable Care Act, including the creation of MNsure, the online health insurance marketplace.

Hospitals "saw a 22.4 percent ($34.6 million) decline in charity care, which is only the second time since 2001 that charity care fell in Minnesota," the Minnesota Department of Health said in a statement Tuesday. "Charity care fell for patients with insurance and patients without insurance. However, there was a greater decline in charity care for the uninsured (down 24.6 percent) compared to insured patients (down 17.8 percent)."

"What the data seem to show is that hospitals were able to benefit from a decrease in the need for charity care as tens of thousands of Minnesotans were able to get health insurance because of MNsure and the Affordable Care Act," said Stefan Gildemeister, director of the MDH Health Economics Program.

Uncompensated care has two parts, charity care and bad debt. While charity care is care that hospitals provide without expecting payment, bad debt is payment that hospitals expect but do not receive, the department said.

While the overall decline in uncompensated care was seen as good news, it masked an increase in bad debt costs, which have been largely on the rise. In 2014, hospitals saw bad debt increase 9.3 percent ($14.9 million) to $174.2 million, officials said.

"The increase in bad debt has occurred as health care costs continue to rise and employers and insurers shift more of the costs to patients through higher deductibles and copays," the department said.