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BLUE CROSS OFFERS COUNTY A PLAN TO INSURE HOSPITAL CARE FOR POOR

BLUE CROSS OFFERS COUNTY A PLAN TO INSURE HOSPITAL CARE FOR POOR
 CLEVELAND, April 2 /PRNewswire/ -- To insure long-term hospital care to the area's poor, in the wake of General Assistance cuts, Blue Cross & Blue Shield of Ohio (BCBSO) today called on the Cuyahoga County Commissioners to allocate public funds proportionately to hospitals according to the actual charity care they provide.
 In an open letter to the commissioners, John Burry, Jr., chairman and chief executive officer for BCBSO, urged the commissioners to recognize that the $30 million subsidy of its own hospital system significantly exceeds the amount of charity care they actually provide, while paying nothing for care to the poor provided by other hospitals here.
 He further said commissioners should demand public disclosure of true charity care being delivered by all hospitals and to base any future subsidies and tax-exempt status on actual delivery of that care to the poor.
 Burry warned that the county should be careful not to accept hospital claims for uncompensated care that inaccurately equate it with charity care.
 "Nothing could be further from the truth. Uncompensated care is an accounting dumping ground for items such as bad debt, employee healthcare, volume discounts given to big customers, and myriad other write-offs," Burry said.
 Citing a recent report from the Greater Cleveland Hospital Association (GCHA), Burry explained that "northeastern Ohio hospitals provided about $150 million in 'uncompensated care.' Of this figure, approximately $30 million, or only one-fifth of the amount, just 20 percent, is allocated or devoted to true 'charity' care."
 To provide the commissioners with a frame of reference beyond that 20 percent figure, he said that last year Congress considered, but did not pass, a legislative proposal requiring that 50 percent of uncompensated care must be actual charity care to qualify for tax- exempt status.
 Burry asked the commissioners to re-examine the criteria for 501 (C) (3) tax-exempt status for charity care, which he said some hospitals use as a "tool for creative accounting...rather than a vehicle to meet its intended purpose." He offered his company's help in defining community standards to meet the county's "expectations and mission."
 The situation is not unique to Cuyahoga County. Burry said that in January a Pennsylvania appellate court upheld a lower court's decision to withdraw the tax exemption for Hamot Medical Center in Erie. The court found the hospital failed to provide a significant enough proportion of charity care to "merit its exemption from property taxes." A similar case is pending in Texas.
 Burry explained that his company "discovered this inequity" in the charity piece of "uncompensated care" when developing its strategy to seek selective contracting with hospitals. The Health Insurance Reform Act of 1987 enabled Blue Cross for the first time to negotiate price with hospitals.
 Since the law passed, Blue Cross' volume buying power has held down hospital costs here below the national average, he said. In-patient hospital inflation in Cleveland is 2.2 percent compared to 7.8 percent nationally, and Cleveland hospitals moved from the fourth most expensive in the country in 1987 to 11th in 1990, the most recent year for which figures are available. Burry added that Blue Cross does make credit adjustments for "uncompensated care" when contracting with hospitals.
 -0- 4/2/92
 /CONTACT: David Eden or Paula Slimak, both of William Silverman and Company, 216-696-7750, for Blue Cross & Blue Shield of Ohio/ CO: Blue Cross & Blue Shield of Ohio ST: Ohio IN: INS HEA SU:


SM -- CL015 -- 4508 04/02/92 15:41 EST
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Publication:PR Newswire
Date:Apr 2, 1992
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