HCA Holdings 2012 Annual Report Download - page 118

HCA HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 1 — ACCOUNTING POLICIES (continued)
Revenues (continued)
to cost reports filed during previous years includes two adjustments to Medicare revenues that affected multiple
annual cost report periods for the majority of our hospitals (the Rural Floor Provision Settlement which increased
revenues by approximately $271 million and the implementation of revised Supplemental Security Income ratios
which reduced revenues by approximately $75 million). The net effect of these Medicare adjustments was an
increase of $196 million to revenues. Excluding the effect of these Medicare adjustments, the 2012 amount
related to previous years would have been $46 million.
The Emergency Medical Treatment and Labor Act (“EMTALA”) requires any hospital participating in the
Medicare program to conduct an appropriate medical screening examination of every person who presents to the
hospital’s emergency room for treatment and, if the individual is suffering from an emergency medical condition,
to either stabilize the condition or make an appropriate transfer of the individual to a facility able to handle the
condition. The obligation to screen and stabilize emergency medical conditions exists regardless of an
individual’s ability to pay for treatment. Federal and state laws and regulations require, and our commitment to
providing quality patient care encourages, us to provide services to patients who are financially unable to pay for
the health care services they receive. Because we do not pursue collection of amounts determined to qualify as
charity care, they are not reported in revenues. Patients treated at hospitals for nonelective care, who have income
at or below 200% of the federal poverty level, are eligible for charity care. The federal poverty level is
established by the federal government and is based on income and family size. We provide discounts to
uninsured patients who do not qualify for Medicaid or charity care. These discounts are similar to those provided
to many local managed care plans. In implementing the uninsured discount policy, we first attempt to qualify
uninsured patients for Medicaid, other federal or state assistance or charity care. If an uninsured patient does not
qualify for these programs, the uninsured discount is applied.
To quantify the total impact of and trends related to uninsured accounts, we believe it is beneficial to view
charity care, uninsured discounts and the provision for doubtful accounts in combination, rather than each
separately. A summary of these amounts for the years ended December 31, follows (dollars in millions):
2012 Ratio 2011 Ratio 2010 Ratio
Charity care ................................. $ 3,093 22% $ 2,683 24% $ 2,337 24%
Uninsured discounts ........................... 6,978 51 5,707 51 4,641 48
Provision for doubtful accounts .................. 3,770 27 2,824 25 2,648 28
Total uncompensated care .................. $ 13,841 100% $ 11,214 100% $ 9,626 100%
A summary of the estimated cost of total uncompensated care for the years ended December 31, follows
(dollars in millions):
2012 2011 2010
Gross patient charges ............................................. $165,614 $141,516 $125,640
Patient care costs (salaries and benefits, supplies, other operating expenses
and depreciation and amortization) ................................ 28,533 25,554 23,870
Cost-to-charges ratio ............................................. 17.2% 18.1% 19.0%
Total uncompensated care ......................................... $ 13,841 $ 11,214 $ 9,626
Multiply by the cost-to-charges ratio ................................. 17.2% 18.1% 19.0%
Estimated cost of total uncompensated care ........................... $ 2,381 $ 2,030 $ 1,829
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