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Charity-care change at Duluth hospitals questioned

DULUTH, Minn. — A change in charity care policy at Duluth's two hospitals has alarmed some patients.

"I'm still trying to figure this out," said Daryl Richter, 59, of Hermantown. "It really starts stinking more and more and it makes me trust Essentia less and less."

Hospital officials say they're still providing charity care, in some cases partially covering patients who didn't qualify under the other plan.

At issue is the Senior Partners Care Program, set up four decades ago by the nonprofit agency Minnesota Citizens Federation Northeast to help patients on Medicare who couldn't afford their copays.

It's for people on Medicare who make more than 100 percent but less than 200 percent of the federal poverty level, said Buddy Robinson, the agency's staff director. Those who make less than 100 percent are eligible for additional help via Medical Assistance or — in Wisconsin — BadgerCare, Robinson said.

But people living a little above the poverty line often have difficulty making their 20 percent share of medical costs under Medicare, Robinson said.

Citizens Federation began offering the program 40 years ago with St. Luke's and 35 years ago with what then was St. Mary's, Robinson said. Over time, other health systems and hospitals and other agencies in Minnesota joined.

It's the hospitals that actually provide the charity care, writing off the portion of the patients' bills not covered by Medicare, Robinson said. Citizens Federation and the other agencies handle the annual administrative chores, screening applicants to make sure they qualify. In return, the applicants pay Citizens Federation an $80 annual fee, he said.

But Essentia Health ended its participation in the program as of Feb. 1 and St. Luke's as of July 15, Robinson said.

Essentia didn't have any choice, spokeswoman Miranda Anderson said. The U.S. Centers for Medicaid and Medicare Services — often referred to as CMS — issued new regulations requiring that all of a hospital's charity care cases be handled equally. That meant Essentia could no longer use two charity care programs — its own and the one for those who chose to sign up with the Senior Partners Care Program.

Robinson acknowledged that CMS issued new regulations, but said he disagreed with Essentia's conclusion. He noted that other Minnesota hospitals, including Hennepin County Medical Center and the Fairfield system, have stayed in Senior Partners Care.

Anderson contended that Essentia's own charity care plan is better for many patients. The program is designed for all needy patients, not just those on Medicare, and it provides a partial discount for patients who would get no coverage under Senior Partners Care, she said.

Specifically, it provides a 100 percent discount if household income is below 160 percent of the poverty guideline, 75 percent if it's less than 225 percent and 50 percent if it's less than 310 percent.

Those who enroll in Essentia's plan can remain for 12 months before reapplying, and they pay no annual fee, she said.

But there are other differences between Senior Partners Care and the plans at both Essentia and St. Luke's, Robinson argued. The limitation on liquid assets is lower for both, he said, and both require a bill from a service or — in some cases — a scheduled appointment before patients may apply.

That causes uncertainty for people who wonder if their medical bills actually will be covered, he said.

"A number of people have said, 'Well, in that case, I'm not going to go to my doctor visit,' " Robinson said.

That was the decision Beverly Downs abruptly made regarding a test she was scheduled to have earlier this year.

Downs, 71, of Duluth, had seen a doctor at the Duluth Family Medical Center because of shaking in her right hand. The doctor scheduled a test at Essentia Health, she said. When she told the woman who registered her that she was covered through Senior Partners Care, she was told, "No you don't. We don't take it," Downs related.

After confirming that with Citizens Federation, "I walked up to the desk to cancel," Downs said.

Richter, who is on Medicare for a disability, said he was scheduled for three appointments involving testing on March 16, the first of which was for 7:30 a.m.

"When I checked in about 7 o'clock in the morning the lady at the counter was the first person to inform me that my insurance from Senior Partners Care was no longer accepted," Richter said.

When he sought more information he was advised to consult the business office, he said. But they didn't open until 8.

He went to his appointments with assurances "that everything would be all right," Richter said.

He later learned that he qualified for coverage under Essentia's program, he said. But the experience left him wary that more changes would come in the future.

He was distressed by the lack of advance notice about the change, Richter said.

St. Luke's did not make an administrator available for an interview but provided a statement from Erich Lohn, vice president and chief financial officer. Last year, St. Luke's provided more than $2.7 million in aid to community members through its financial assistance program, he said.

The hospital assisted more than 5,000 patients in 2016, he said.