Undocumented Aliens:

Questions Persist about Their Impact on Hospitals' Uncompensated Care Costs

GAO-04-472: Published: May 21, 2004. Publicly Released: May 28, 2004.

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About 7 million undocumented aliens lived in the United States in 2000, according to Immigration and Naturalization Service estimates. Hospitals in states where many of them live report that treating them can be a financial burden. GAO was asked to examine the relationship between treating undocumented aliens and hospitals' costs not paid by patients or insurance. GAO was also asked to examine federal funding available to help hospitals offset costs of treating undocumented aliens and the responsibility of the Department of Homeland Security (Homeland Security) for covering medical expenses of sick or injured aliens encountered by Border Patrol and U.S. port-of-entry officials. To conduct this work, GAO surveyed 503 hospitals and interviewed Medicaid and hospital officials in 10 states. GAO also interviewed and obtained data from Homeland Security officials.

Hospitals generally do not collect information on their patients' immigration status, and as a result, an accurate assessment of undocumented aliens' impact on hospitals' uncompensated care costs--those not paid by patients or by insurance--remains elusive. GAO attempted to examine the relationship between uncompensated care and undocumented aliens by surveying hospitals, but because of a low response rate to key survey questions and challenges in estimating the proportion of hospital care provided to undocumented aliens, GAO could not determine the effect of undocumented aliens on hospitals' uncompensated care costs. Federal funding has been available from several sources to help hospitals cover the costs of care for undocumented aliens. The sources include Medicaid coverage for emergency medical services for eligible undocumented aliens, supplemental Medicaid payments to hospitals treating a disproportionate share of low-income patients, and funds provided to 12 states by the Balanced Budget Act of 1997. In addition, the recently enacted Medicare Prescription Drug, Improvement, and Modernization Act of 2003 appropriated $1 billion over fiscal years 2005 through 2008 for payments to hospitals and other providers for emergency services provided to undocumented and certain other aliens. By September 1, 2004, the Secretary of Health and Human Services must establish a process for hospitals and other providers to request payments under the statute. Border Patrol and U.S. port-of-entry officials encounter aliens needing medical attention under different circumstances, but in most situations, Homeland Security is not responsible for aliens' hospital costs. The agency may cover medical expenses only for those people in its custody, but border officials reported that sick or injured people they encounter generally receive medical attention without being taken into custody.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendation for Executive Action

    Recommendation: To help ensure that funds appropriated by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 are not improperly spent, the Secretary of Health and Human Services should, in establishing a payment process, develop appropriate internal controls to ensure that payments are made to hospitals and other providers only for unreimbursed emergency services for undocumented or certain other aliens as designated in the statute. In doing so, the Secretary should develop reporting criteria for providers to use in claiming these funds and periodically test the validity of the data supporting the claims.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: CMS developed procedures for processing claims under this provision (Section 1011 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003) that include measures to help ensure that payments are made to providers for unreimbursed emergency services for only undocumented and other eligible aliens. Specifically, CMS developed a provider payment determination form that includes reporting criteria for providers to use to affirm and to attest to the best of their knowledge the patient's eligibility. The form allows the provider to (1) to note if the patient identified himself or herself as an undocumented alien, or (2)indicate that the patient is a Mexican citizen with a border crossing card or who was paroled into the United States (two categories of eligible aliens under the statute) based on supporting documentation, or (3) affirm eligibility by demonstrating the patient was born in a foreign country AND has one of the following: foreign birth certificate, foreign passport, foreign voting card, expired visa, foreign driver's license, Matricula Consular or other foreign identification card, or invalid or no SSN. Providers are required to retain the provider payment determination forms and supporting documentation. Beginning in July 2007, CMS's contractor began conducting compliance reviews of providers that claimed payments under this provision. As part of these reviews, providers are required to submit a copy of the provider payment determination form and accompanying documentation. If the contractor determines discrepancies in eligibility determination, it may take steps to withhold discrepant amounts from the provider's next quarterly payment.

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