Counting the Costs

Tuesday's World Events   —   Posted on September 12, 2006

(by John Dawson, TUCSON – Arizona hospitals are still paying for a horrific accident last month when a white Chevy Suburban carrying 20 Mexican and Salvadoran nationals rolled several times Aug. 7 after its 20-year-old driver tried to outmaneuver U.S. Border Patrol agents. He attempted a sharp, high-speed turn to avoid spike strips on Martinez Lake Road about 30 miles north of Yuma, Ariz., in a failed attempt to drive around a border checkpoint.

Federal agents from the Yuma sector initially spotted the SUV near daybreak trying to run past the checkpoint on a dirt road. After the vehicle came to a rest, the Yuma County Sheriff’s Department spokesman described the passengers as stacked like “cord wood” inside the crushed vehicle. Five passengers were pronounced dead on the scene. Six others died at hospitals, including the fetus of a pregnant 17-year-old who also died.

The crash may have been a tragic end to an ill-fated attempt to smuggle illegal immigrants. But it was only the beginning of the story for area hospitals tasked to save lives and nurse survivors back to health. All survivors were initially transported to Yuma Regional Medical Center; six were then medivaced to Banner Good Samaritan Medical Center in Phoenix. Nearly a month later, Good Samaritan was still treating three patients from the rollover plus a newborn in the hospital’s neonatal ICU whom doctors delivered by Caesarean section from a female survivor.

The costs in both tragedy and medical care are staggering. Good Samaritan spokesman Craig Fischer said final costs “are speculative” at this point but “will likely be substantial—into the hundreds of thousands of dollars for the most serious patients.” The Yuma hospital said initial treatment it performed on 16 survivors did have a dollar number: $139,345.25. With the dead buried and the survivors stabilized, one question remains: Who will pay the bill? Hospitals across the country already know the answer: They will.

Despite passage of a law three years ago to compensate medical facilities that care for illegals, few are ever reimbursed. And despite agitation from pro-immigration and anti-immigration groups vowing to make reform legislation a key issue in this year’s mid-term elections, congressional leaders announced last week that they will backburner immigration reform—and the mounting costs associated with a fast-growing population of illegals—until after the election.

Federal law now requires hospitals to provide emergency care to anyone who shows up in the emergency room, regardless of the patient’s citizenship status or ability to pay. For migrants this means a kind of free health insurance program that leads many—of both legal and illegal status—to use emergency rooms not just for emergencies, but also for primary care.

Nobody really knows how much hospitals are paying to care for foreign nationals who show up in emergency rooms across the country. The federal government can’t even be certain how many illegal immigrants are in the country, though most estimates put the number around 11 million people who either crossed into the United States illegally or who overstayed legitimate visas. Most hospitals have only recently begun to account for the cost of providing care to a foreign national population that, because of their legal status, can’t get health insurance. It’s an underground community, which makes recordkeeping difficult.

But the anecdotal evidence and limited studies suggest that hospitals pay many millions to care for illegals. The most comprehensive study undertaken, already six years old, found that in 2000 emergency medical care of non-payers in the 24 California, Arizona, New Mexico, and Texas counties along the Mexican border cost $190 million.

Unrecouped costs like that take a large toll. Sixty hospitals in California closed their doors from 1993 to 2003 because, according to the Journal of American Physicians and Surgeons, nearly half the hospitals’ patient charges were never paid. Those hospitals that don’t shut down may face cutbacks in services to paying customers or face leaving the trauma business altogether. In July 2003 Tucson’s 355-bed University Medical Center (UMC) became southern Arizona’s sole Level One trauma center after all other hospitals in the region dropped emergency care or closed down entirely.

“The foreign nationals—not just illegals—cost UMC about $5 million to care for [this year],” said Kevin Burns, UMC’s chief financial officer. “That’s cost, not what we could have charged. That’s roughly five new hospital beds we could pay for in a year. That $5 million a year over a few years would pay for our needed emergency room expansion.” Instead, he said, wait times at UMC have reached 10 hours, partly because of high demand and overuse of the hospital’s emergency room.

The red ink produced by non-payers puts Burns in a difficult position. Ethically and legally, he cannot refuse care to people in need no matter their residency status. At the same time, he cannot allow unrecouped costs to shutter the hospital. “I have to be hard-nosed and creative with my commercial payers to negotiate higher rates,” Burns said. “I call it a ‘stealth tax.’. . . We have to recover those costs one way or another or two things may occur. We will have to take a pass on hiring nurses and doctors and giving raises in a very competitive market, or we’ll have to keep old equipment.”

Either way, the paying public loses. Meanwhile, non-paying migrants and foreign nationals are only too aware of the hospitals’ Catch-22. A border crosser in Arizona who walks from Naco or Nogales into the United States knows that he only needs to make it past Border Patrol to a U.S. hospital. Then, after an admittedly long emergency room wait, dehydration from walking across a desert, scrapes, cuts, or broken bones from jumping fences or tripping on rocks—all can be mended free of charge.

Hospital personnel can rarely tell the difference between legitimate foreign nationals with visas and illegals with forged papers, and won’t take the time to call la migra (the immigration authorities). After a pit stop for free care, border-crossers may emerge rested and with fond memories. Hospitals in cities like Tucson see lots of repeat customers.

Responding to pressure from medical care providers, border-state lawmakers—led by Sens. Jon Kyl (R-Ariz.), Kay Bailey Hutchinson (R-Texas), and Diane Feinstein (D-Calif.), pushed Congress in 2003 to set aside $1 billion to reimburse hospitals for treating illegal immigrants as part of the Medicare prescription drug bill. Section 1011, as the program is called, was intended to “keep hospitals and ambulance companies from shutting down because they’re not getting paid,” Kyl told WORLD, adding that helping hospitals out was only fair since the problem grew as the federal government fell down on its job of policing the border.

In May 2005 the federal agency overseeing the reimbursements, the Center for Medicare and Medicaid Services (CMS), began accepting bills from hospitals under Section 1011. Congress allowed for payouts up to $250 million every year under the four-year program. But in the first year, CMS didn’t meet the statutory allowance, paying out just under $100 million to hospitals, even as they submitted bills exceeding that amount.

UMC in Tucson billed CMS for $6 million under 1011 in 2005—and received $1.8 million, or a 30 percent rate of return. But Burns told WORLD those figures are misleading because under Section 1011 hospitals can only bill up to the point where doctors stabilize a patient, usually two days unless the hospital can prove extenuating circumstances. When total charges are counted, Burns estimates UMC gets only 11 cents on the dollar back from the government.

UMC is not alone. In San Antonio, University Hospital asked for $2.2 million for the first quarter of the program and got just under $1 million in reimbursements. Carolinas Medical Center in Charlotte—a 1,300-bed network of four facilities about 1,400 miles from the closest border crossing—treated enough illegals to submit to CMS $1.6 million in charges under Section 1011. Carolinas spokesman Raymond C. Jones told WORLD that amount reflected costs only up to stabilizing patients as required under the federal law; actual out-of-pocket costs to the hospital for treating migrants in 2005 was $3 million. For that, the hospital received $518,000 in federal reimbursement.

The federal payout to hospitals, according to Burns, “is significant. We are happy that our congressional delegation worked to get us some help. But it doesn’t cover our cost and it certainly doesn’t cover the full charges.”

In an interview with WORLD in Arizona, Kyl, who has served four terms in the U.S. House, two in the Senate, and is up for reelection this year, acknowledged a disconnect between the spirit of the law and how the federal government has implemented the program. “I wrote that law and all they’re supposed to do is submit a bill and they’re supposed to get 100 percent payment [for costs up to stabilization],” Kyl said. “So if they’re not getting 100 percent payment, they need to talk to me.” Kyl said he has instructed his office to investigate charges that CMS isn’t processing full reimbursements and to examine why the agency won’t spend the $250 million per year allotment.

But in reality, those answers may be complicated because CMS bases reimbursement on flat-rate charges for each diagnosis. So when law enforcement authorities in Tucson opened fire on a foreign national after he shot at officers last year, UMC billed the feds $220,000 for his 35-day stay at the medical center. But CMS paid $54,000 to cover the cost of treating the patient.

Burns and other hospital officials say the reimbursement issues point to a larger problem: In the Tucson shooting, for example, Immigration and Customs Enforcement officers should have taken custody of an illegal immigrant once the patient was admitted to the hospital. The law requires the Border Patrol or Immigration and Customs Enforcement to foot hospital bills if they officially bring in a patient or have custody.

According to Burns, “Typically ICE will drop the person off without taking custody.” And in that case, hospitals are left to foot the bill. According to ICE spokesman Carl Rusnok, it’s policy for ICE to avoid taking custody until pricey hospital bills are out of the way. “We won’t take somebody into custody until they have been fully treated,” he said. Why? “From one standpoint, the hospital bills would be extremely expensive.”

And that’s just what hospitals and border-state lawmakers have been saying.

Copyright 2006 WORLD Magazine, September 16th, 2006 issue.  Reprinted here September 12th with permission from World Magazine. Visit the website at