Section Chief, Pediatric Hospital Medicine Helen DeVos Children's Hospital Rockford, Michigan, United States
Background: Children’s hospitals (CH) represent a unique setting for pediatric healthcare, serving as regional referral centers as well as providing less complex hospital care for children living in local and nearby communities. In order to fulfill their unique roles, CH must closely monitor their financial health. Previous reports have found that reimbursement to children’s hospitals often falls short of the actual costs of delivering hospital care, particularly for children covered by public insurance. The most extreme example of this underpayment occurs when the hospital receives no reimbursement for an encounter. The extent to which children’s hospitals receive no payment for in-hospital services has not been reported previously. Objective: To determine the extent of and variability in unreimbursed admissions at US children’s hospitals. Secondarily, we sought to determine characteristics of uncompensated hospital admissions and estimate costs of care and lost revenue associated with those admissions. Design/Methods: Retrospective cohort study including hospitalizations (inpatient and observation) from children aged 0-18 years discharged between January and December 2021 from 10 hospitals that reported clinical and billing data to the Pediatric Health Information Systems (PHIS, Children’s Hospital Association (CHA)) and encounter level payer reimbursement data to the Revenue Management Program (CHA). Hospitalizations for normal newborns and obstetrical care were excluded. Generalized estimating equations clustered on hospitals were used to model the likelihood of no payment. Results: For the 10 study hospitals the mean proportion of discharges with no reimbursement was 3.91% ± 1.40% (range 1.80-6.27%), representing 3.39% ± 1.40% of the total costs of care. Uncompensated hospitalizations were more likely for patients >18 vs. 0 years of age (OR 1.67 95% CI: 1.22,2.27), male sex (OR 1.06, 95% CI: 1.03, 1.09), those leaving against medical advice (OR 4.87, 95% CI: 1.51,15.69), and those with commercial (OR 1.45, 95% CI: 1.16,1.81) or self-pay (OR 66.39, 95% CI: 31.95,137.93) vs. government insurance. The total lost revenue was $234M across the 10 study hospitals.
Conclusion(s): While CH continue to provide high quality, high value care, these facilities frequently receive no reimbursement for their services. Hospitalizations that result in no reimbursement may strain the ability of these facilities to provide to their communities and children at risk. Understanding and minimizing these hospitalizations may benefit the overall financial stability of CH.
