TRANSCRIPT: Hello. Dr. Keith smith with you, Surgery Center of Oklahoma. Thank you for joining us in this video blog series.

Let’s keep going with the scams and review one we’ve gone over before in previous blogs – uncompensated care. When I say ‘uncompensated care,’ that phrase would lead a normal, rational, logical person to think this is healthcare that is delivered by, say, a hospital, for which that hospital was not compensated. That is actually not true.

Actually, uncompensated care is a revenue item. When hospitals say ‘uncompensated care’ behind closed doors, they’re talking about how much money they’re going to receive to the extent that they claim they provided care for which they were not compensated. To the public, uncompensated means these institutions are charitable in some way.

Here’s how it works: we’ve used the hundred-dollar aspirin example before and for simplicity I’ll use it again. A hospital charges $100 for an aspirin and they get paid $5 and they claim they lost $95. (Never mind, they probably paid $1 for the whole bottle.) So they’ve lost $95 and this loss helps maintain the fiction of their not-for-profit status.

Another thing they do is put this $95 loss into a bucket and those losses build up. And they claim they lost all this money – this is uncompensated care – and they receive a kickback from the federal government in the form of what are called disproportionate share hospital payments. These payments are based on the extent to which these hospitals claim they provided care for which they were not compensated.

This is the scam of uncompensated care. And when you think through it, you realize this is one of the reasons why hospital bills are so outrageous. The higher the hospital bill, the more the hospital claims they lost, the more they maximize this uncompensated care revenue opportunity.

This is a very important scam for you to understand and at the risk of having gone over it one too many times, I thought I would do it once again.

Thank you for joining us. We’ll have more in this series very soon. See you next time.