State accused of shifting health care costs - East Valley Tribune: East Valley Local News

State accused of shifting health care costs

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Posted: Thursday, March 12, 2009 5:34 pm | Updated: 1:44 am, Sat Oct 8, 2011.

The Arizona Chamber of Commerce and Industries charged Thursday that the state is unfairly shifting to businesses its costs of providing health care to the poor.

A study commissioned by the business group said the Arizona Health Care Cost Containment System pays less than 80 percent of the cost of hospitalizing its patients. The study also found that the federal government did not pay full charges for Medicare patients.

The result, according to the study's author Randy Haught, is hospitals have to hike costs to nongovernment programs which increases health insurance costs for employers.

But Haught, paid nearly $50,000 for the report by the business group, said he was not asked to look at whether private insurance companies were paying their share of hospital charges. Haught said insurers don't pay full hospital charges which are imposed only on those without insurance.

At the same Thursday press conference, chamber lobbyist Suzanne Taylor criticized lawmakers for cutting the funds it pays to hospitals for AHCCCS patients as part of the plan to balance the state budget.

Taylor said that criticism does not undermine her organization's push to permanently repeal the state's suspended property tax. That push, if successful, eliminates the chance the state would collect an extra $250 million, money that could be used instead of making further cuts to AHCCCS spending.

Taylor said the purpose of the study - and Thursday's press conference at the Capitol - was to expose the "hidden health care tax."

AHCCCS provides free care to anyone below the federal poverty level, about $18,310 a year for a family of three. There are about one million Arizonans getting such care.

Rainey Holloway, the agency's spokeswoman, acknowledged AHCCCS does not pay what hospitals list as their bill charges. Instead, she said, the state's reimbursement rates are based on cost information reported by Arizona hospitals to Medicare, as well as historical claims data for AHCCCS recipients.

And she said that, as required by law, those rates are adjusted annually "to keep pace with growing health care costs."

But John Rivers, executive director of the Arizona Hospital and Healthcare Association, said that doesn't mean hospitals are getting adequate reimbursement.

"We don't completely trust what AHCCCS tells us about costs," Rivers said. And he said the agency's reliance on Medicare is misplaced, as the federal program does not allow hospitals to recoup all of its costs.

Haught, looking at the data he was directed to study, calculated the cost shift to private payers, both insurers and individuals, at $1.3 billion a year. That includes not only what government plans do not pay but also what hospitals lose in "uncompensated care" when people do not pay their bills.

Those costs, according to Taylor, are borne largely by employers.

She said that, for those companies that provide health insurance for workers, the employers pick up 81 percent of the premiums for single workers and 75 percent of family policies.

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