HCA Holdings 2011 Annual Report Download - page 9

We receive payments for patient services from the federal government under the Medicare program, state
governments under their respective Medicaid or similar programs, managed care plans, private insurers and
directly from patients. Our revenues from third-party payers and the uninsured for the years ended December 31,
2011, 2010 and 2009 are summarized in the following table (dollars in millions):
Years Ended December 31,
2011 Ratio 2010 Ratio 2009 Ratio
Medicare ........................ $ 7,653 25.8% $ 7,203 25.7% $ 6,866 25.6%
Managed Medicare ................ 2,442 8.2 2,162 7.7 2,006 7.5
Medicaid ........................ 1,845 6.2 1,962 7.0 1,691 6.3
Managed Medicaid ................ 1,265 4.3 1,165 4.2 1,113 4.2
Managed care and other insurers ...... 15,703 52.9 14,762 52.7 14,323 53.5
International (managed care and other
insurers) ....................... 938 3.2 784 2.8 702 2.6
29,846 100.6 28,038 100.1 26,701 99.7
Uninsured ....................... 1,846 6.2 1,732 6.2 2,350 8.8
Other ........................... 814 2.7 913 3.3 1,001 3.7
Revenues before provision for doubtful
accounts ....................... 32,506 109.5 30,683 109.6 30,052 112.2
Provision for doubtful accounts ...... (2,824) (9.5) (2,648) (9.6) (3,276) (12.2)
Revenues ........................ $29,682 100.0% $28,035 100.0% $26,776 100.0%
Medicare is a federal program that provides certain hospital and medical insurance benefits to persons
age 65 and over, some disabled persons, persons with end-stage renal disease and persons with Lou Gehrig’s
Disease. Medicaid is a federal-state program, administered by the states, which provides hospital and medical
benefits to qualifying individuals who are unable to afford health care. All of our general, acute care hospitals
located in the United States are certified as health care services providers for persons covered under Medicare
and Medicaid programs. Amounts received under Medicare and Medicaid programs are generally significantly
less than established hospital gross charges for the services provided.
Our hospitals generally offer discounts from established charges to certain group purchasers of health care
services, including private insurance companies, employers, health maintenance organizations (“HMOs”),
preferred provider organizations (“PPOs”) and other managed care plans. These discount programs generally
limit our ability to increase revenues in response to increasing costs. See Item 1, “Business — Competition.”
Patients are generally not responsible for the total difference between established hospital gross charges and
amounts reimbursed for such services under Medicare, Medicaid, HMOs, PPOs and other managed care plans,
but are responsible to the extent of any exclusions, deductibles or coinsurance features of their coverage. The
amount of such exclusions, deductibles and coinsurance continues to increase. Collection of amounts due from
individuals is typically more difficult than from governmental or third-party payers. We provide discounts to
uninsured patients who do not qualify for Medicaid or charity care under our charity care policy. These discounts
are similar to those provided to many local managed care plans. In implementing the discount policy, we attempt
to qualify uninsured patients for Medicaid, other federal or state assistance or charity care under our charity care
policy. If an uninsured patient does not qualify for these programs, the uninsured discount is applied.
Medicare
Inpatient Acute Care
Under the Medicare program, we receive reimbursement under a prospective payment system (“PPS”) for
general, acute care hospital inpatient services. Under the hospital inpatient PPS, fixed payment amounts per
inpatient discharge are established based on the patient’s assigned Medicare severity diagnosis-related group
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