N.Y.-Presbyterian Hospital Costs Eyed By Senate

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The New York Sun

A Senate hearing today on high charges billed to uninsured patients at nonprofit hospitals is expected to focus in part on NewYork-Presbyterian Hospital, drawing new scrutiny to the multimillion-dollar compensation and perks provided to the medical center’s executives.

Senator Grassley, a Republican of Iowa, said yesterday that an investigation of 10 large nonprofit hospitals, including NewYork-Presbyterian, underscored concerns that the institutions were not always living up to their charitable mission.

“Non-profit doesn’t necessarily mean pro-poor patient,” Mr. Grassley said in a statement previewing today’s Senate Finance Committee hearing. “Non-profit hospitals may provide less care to the poor than their for-profit counterparts. They may charge poor, uninsured patients more for the same services than they charge insured patients. They sometimes give their executives gold-plated compensation packages and generous perks, such as country club memberships. All of this calls into question whether non-profit hospitals deserve the billions of dollars in tax breaks they receive from federal, state, and local governments.”

Mr. Grassley’s statement did not single out NewYork-Presbyterian, or any other hospital, for criticism. However, some data the senator released about the New York hospital could fuel questions about its practices.

NewYork-Presbyterian said its list prices for procedures, office visits, and hospital stays represent on average a 98% markup from the hospital’s costs. Insured patients and their insurance companies almost always get a discount, which averages 47% for private plans, according to the new data. NewYork-Presbyterian said it never sees about 82% of the billed amount for uninsured patients and, in a recent two-year period, filed 59 lawsuits to collect on unpaid bills.

Meanwhile, in 2004, the hospital’s CEO and president, Dr. Herbert Pardes, made more than $4.6 million, while the hospital’s director and executive vice president made about $3.4 million, not counting retirement contributions, according to paperwork filed with the Internal Revenue Service.

NewYork-Presbyterian disclosed to Mr. Grassley that the hospital reimburses Dr. Pardes about $4,300 each year for his membership in a “private social club,” which was not identified. “The CEO used this club for business-related meetings and events,” the hospital’s submission said.

NewYork-Presbyterian also submitted details of travel expenses for its top executives. However, those data were not part of the information made public yesterday by Mr. Grassley.

A spokeswoman for the hospital, Kathleen Robinson, declined to answer specific questions yesterday about the submission to the Senate or to provide copies of the detailed documentation on bill-collection lawsuits, executive travel, and employee compensation.

NewYork-Presbyterian said in its submission that it provided $51.8 million in so-called charity care in 2004 and wrote off $66.7 million in bad debt. The hospital took in $35.3 million in special federal payments for hospitals that serve large numbers of poor patients that year and ran a $17.3 million surplus.

The hospital told Mr. Grassley that it offers so-called charity care to individuals with income below three times the federal poverty line. The medical center said that in the summer of 2004 it posted about 80 signs in emergency rooms, admitting departments, and outpatient clinics advising patients of the potential for free care or discounts based on income.

However, an attorney who works with uninsured patients dunned and sometimes sued by NewYork-Presbyterian said the hospital has a record of aggressive collection practices and poor disclosure of the availability of charity care. “They were really one of the worst offenders,” the lawyer, Elisabeth Benjamin, said. “NewYork-Presbyterian has complied kicking and screaming and only as a result of a lot of different advocacy groups’ work over the past three years.”

Ms. Benjamin, who studied the issue for the Legal Aid Society and now works for the New York Civil Liberties Union, disputed the hospital’s claim that signs about charity care went up in all major facilities in 2004.

“That’s still not true. We sent an intern over there in 2005 and there were still no signs in the emergency room,” the lawyer said. She said she found the claim of 59 collection lawsuits in two years implausibly low because she personally had five or 10 clients who were sued by NewYork-Presbyterian.

In March, the state Legislature passed a law requiring disclosures about charity care on all hospital bills and tying discounts to the rates paid by large insurers. Ms. Benjamin said there were previously few rules, despite about $800 million in state funds being given to hospitals each year for so-called uncompensated care. “So much money was being given to hospitals without any checks or balances,” she said.

In 2004, NewYork-Presbyterian was one of more than a dozen hospitals nationwide hit with class-action lawsuits charging that billing practices for uninsured patients violated the law. Last year, a federal judge in Manhattan, Loretta Preska, ruled that the courts were the wrong venue to resolve the issue.

“Plaintiffs here have lost their way,” Judge Preska wrote.”They need to consult a map or a compass or a Constitution because plaintiffs have come to the judicial branch for relief that may only be granted by the legislative branch.”

However, in July, a federal appeals court revived the litigation against NewYork-Presbyterian by ruling that the case could be refiled in state court.

The hospital’s CEO, Dr. Pardes, is not scheduled to testify today, but did appear two years ago before a House panel looking at hospital policies toward the uninsured.

“As the largest hospital in the New York metropolitan area, NYPH is serious about its commitment to provide medical care to both the uninsured and underinsured in its community,” Dr. Pardes said. He said the hospital will not attach the income of a patient’s spouse and never seeks to seize a patient’s primary residence.

Dr. Pardes noted that federal Medicare rules require the hospital to make reasonable efforts to collect billed charges from patients. In its submission to the Senate, NewYork-Presbyterian suggested that comparisons to for-profit hospitals made little sense in its case because there are virtually none in New York State.

Ms. Benjamin said it remains extremely difficult for uninsured patients to figure out how much different hospitals charge for specific services. “The problem is there is no Expedia for health care,” she said.


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