Undocumented Aliens: Questions Persist about Their Impact on
Hospitals' Uncompensated Care Costs (21-MAY-04, GAO-04-472).
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.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-04-472
ACCNO: A10172
TITLE: Undocumented Aliens: Questions Persist about Their Impact
on Hospitals' Uncompensated Care Costs
DATE: 05/21/2004
SUBJECT: Aliens
Federal funds
Health care costs
Health insurance
Hospital care services
Hospitals
Arizona
California
Florida
Georgia
Illinois
Medicaid Program
New Jersey
New Mexico
New York
North Carolina
Texas
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GAO-04-472
United States General Accounting Office
GAO
Report to Congressional Requesters
May 2004
UNDOCUMENTED ALIENS
Questions Persist about Their Impact on Hospitals' Uncompensated Care Costs
GAO-04-472
May 2004
UNDOCUMENTED ALIENS
Questions Persist about Their Impact on Hospitals' Uncompensated Care Costs
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 (see table). 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.
Federal Funding Sources That Have Been Available to Help Cover Costs of
Treating Undocumented Aliens
Highlights of GAO-04-472, a report to congressional requesters
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.
Program Description
Medicaid Covers emergency medical services for undocumented aliens who
meet Medicaid GAO recommends that the eligibility requirements
Secretary of Health and Human Services, in establishing a payment process
under recently enacted legislation, develop appropriate internal controls
to ensure payments are made only for unreimbursed emergency services for
undocumented or certain other aliens. The Centers for Medicare & Medicaid
Services concurred with GAO's recommendation. Homeland Security also
agreed with the report's findings.
www.gao.gov/cgi-bin/getrpt?GAO-04-472.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Janet Heinrich at (202)
512-7119.
Medicaid disproportionate share hospital Provides supplemental payments to
certain payments hospitals serving a larger number of low-income patients
Balanced Budget Act of 1997 Made $100 million available to 12 states in
fiscal years 1998 through 2001 for emergency services furnished to
undocumented aliens
Source: GAO.
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.
Contents
Letter
Results in Brief
Background
Effect of Undocumented Aliens on Hospitals' Uncompensated Care
Costs Is Uncertain
Some Federal Funding Has Been Available but Not for All
Undocumented Aliens or Hospitals
Homeland Security Is Usually Not Responsible for Hospital Costs
of Aliens Needing Emergency Medical Care Who Are
Encountered by Border Patrol and Port-of-Entry Officials
Conclusions
Recommendation for Executive Action
Agency Comments
1
3 5
8
9
16 21 21 21
Appendix I Survey Methodology and Results 24
Survey Sample 24
Survey Questions 26
Lack of Social Security Number as a Proxy for Undocumented
Aliens 26
Survey Pretesting and Response 27
Data from Responding Hospitals 27
Appendix II Methodology for Determining Federal Funding Sources and
Homeland Security's Responsibility for Medical Costs
Appendix III Comments from the Centers for Medicare & Medicaid Services
Appendix IV Comments from the Department of Homeland
Security 33
Appendix V GAO Contacts and Staff Acknowledgments 34
GAO Contacts 34
Acknowledgments 34
Tables
Table 1: Federal and State Emergency Medicaid Expenditures for 10 States,
Fiscal Year 2002 11 Table 2: Estimated Undocumented Aliens Residing in 10
States, 2000 24 Table 3: Characteristics of Universe from Which Hospitals
Were
Sampled 25 Table 4: Financial Information for Responding Hospitals 27
Table 5: Uncompensated Care Levels by Tertile of Percentage of
Inpatient Days Attributable to Patients without a Social
Security Number 28
Abbreviations
BBA Balanced Budget Act of 1997
CMS Centers for Medicare & Medicaid Services
DSH disproportionate share hospital
EMTALA Emergency Medical Treatment and Active Labor Act
INS Immigration and Naturalization Service
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
United States General Accounting Office Washington, DC 20548
May 21, 2004
Congressional Requesters
An estimated 7 million undocumented aliens1 resided in the United States
in 2000, according to the Immigration and Naturalization Service (INS).2
Concern has been raised that uncompensated care costs due to treating
undocumented aliens place financial strain on hospitals in many areas of
the United States, including along the U.S.-Mexican border.3 Some hospital
associations and hospital officials report that increasing numbers of
persons they believe to be undocumented aliens, including some whom the
U.S. Border Patrol has encountered and found in need of immediate medical
attention, are arriving at their hospitals. In addition, U.S. port-ofentry
officials may grant aliens humanitarian parole, a means of allowing
temporary access into the United States, and these aliens may also arrive
at hospitals in need of medical care. Because federal law requires
hospitals participating in the federal Medicare health insurance program
to medically screen and, if necessary, treat to stabilize any person
seeking care for an emergency medical condition, regardless of immigration
status, some hospital officials have said they believe the federal
government should help pay for emergency and other medical care provided
to undocumented aliens.
Although hospital officials contend that they are left to absorb
uncompensated care costs for emergency treatment and other medical
services provided to undocumented aliens, questions remain about the
1Federal law does not define the term "undocumented alien." For purposes
of this report, the term "undocumented alien" refers to a person who
enters the United States without legal permission or who fails to leave
when his or her permission to remain in the United States expires.
2INS was abolished and its functions, including those of the Border Patrol
and immigration inspection at ports of entry, were transferred to the
Department of Homeland Security, effective March 1, 2003. Pub. L. No.
107-296, S: 441, 116 Stat. 2135, 2192 (2002).
3Hospital uncompensated care is care for which the hospital receives no
payment from either the patient or an insurer. Uncompensated care costs
include (1) costs of providing charity care, that is, care for which the
hospital never expected to receive payment because of the patient's
inability to pay, and (2) bad debt incurred for services for which the
hospital expected but did not receive payment because patients were unable
or unwilling to pay.
magnitude of the problem. No national data are available on the number of
undocumented aliens who receive medical care, the specific services they
receive, or the uncompensated care costs associated with their treatment.
At your request, we conducted a study to address this issue. We focused
our work on the following questions:
o To what extent are hospitals' uncompensated care costs related to
treating undocumented aliens?
o What has been the availability of federal funding sources to help
offset hospitals' costs of treating undocumented aliens?
o What is the responsibility of the Department of Homeland Security
(Homeland Security) to cover the medical expenses of aliens needing
emergency medical care who are either encountered by Border Patrol agents
or granted humanitarian parole by U.S. port-of-entry officials?
To conduct this work, we focused our review on 10 states: Arizona,
California, Florida, Georgia, Illinois, New Jersey, New Mexico, New York,
North Carolina, and Texas. We selected the 4 Southwest states-Arizona,
California, New Mexico, and Texas-because uncompensated care costs due to
treating undocumented aliens has been a long-standing issue for hospitals
located in communities near the U.S.-Mexican border. We selected the other
6 states because high estimated numbers of undocumented aliens resided
there in 2000, according to INS. In all, the 10 states comprised an
estimated 78 percent of the population of undocumented aliens in the
United States in 2000. We mailed a questionnaire to 503 hospitals located
in the 10 states. We received survey responses from 351 hospitals (70
percent), of which 198 (39 percent of surveyed hospitals) provided the
information necessary for us to calculate their total uncompensated care
costs and the proportion of care they provided to patients without a
Social Security number, a proxy we used for undocumented aliens. To
determine the availability of federal funding sources to hospitals
treating undocumented aliens, we obtained documents and interviewed
officials from state Medicaid offices and state hospital associations in
the 10 states, as well as from the Department of Health and Human
Services' Centers for Medicare & Medicaid Services (CMS). In addition, we
reviewed provisions of the recently enacted Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 pertaining to payments to
providers for treating undocumented and other aliens. Finally, to
determine the policies and practices used by the U.S. Border Patrol and
U.S. port-of-entry officials when they encounter aliens needing emergency
medical care, we interviewed Homeland Security
Results in Brief
officials, including officials from relevant Border Patrol jurisdictions
and U.S. ports of entry along the U.S.-Mexican border. We also interviewed
Coast Guard officials about their encounters with sick or injured aliens
at sea. For additional information on our scope and methodology and survey
results, see appendixes I and II. We conducted our work from September
2002 through April 2004 in accordance with generally accepted government
auditing standards.
The impact of undocumented aliens on hospitals' uncompensated care costs
remains uncertain. Hospitals generally do not collect information on
patients' immigration status, thereby making it difficult to identify
patients who are undocumented aliens and the costs associated with
treating them. We determined that a potentially feasible method for
hospitals to collect information for our survey that would allow us to
estimate the amount of care given to undocumented aliens would be to
identify patients without a Social Security number. We used this proxy,
with the understanding that it could possibly over- or underestimate the
number of undocumented aliens, in our survey of hospitals to assess the
effect of undocumented aliens on hospitals' total uncompensated care
costs. Thirty-nine percent of surveyed hospitals provided information to
evaluate this relationship. Because of the low response rate to key
questions and because we were unable to assess the accuracy of the proxy,
we could not determine the effect of undocumented aliens on hospitals'
levels of uncompensated care.
Federal funding to help offset hospitals' costs for treating undocumented
aliens has been available from several sources, but this funding has not
covered care of all undocumented aliens or all medical services and has
not been available to all hospitals. Two of these sources are available
through the Medicaid program, the joint federal-state program that
finances health care for low-income people. First, Medicaid provides
health care coverage for some undocumented aliens. Like citizens, however,
some undocumented aliens are not eligible for or may choose not to enroll
in Medicaid. In addition, coverage for undocumented aliens under Medicaid
is limited to services for treatment of emergency medical conditions.
Second, Medicaid disproportionate share hospital (DSH) adjustments provide
supplemental payments to hospitals serving relatively large numbers of
low-income patients, which can include undocumented aliens. Not all
hospitals receive these payments, however. A third source of federal
funding was provided in the Balanced Budget Act of 1997 (BBA), which made
$25 million available annually, from fiscal years 1998 through 2001, to
selected states for emergency services provided to undocumented aliens.
States could use these funds to recover the state share of Medicaid
expenditures for undocumented aliens and other state expenditures for
undocumented aliens not eligible for Medicaid. The states we reviewed all
opted to use these funds to help recover their state Medicaid
expenditures, and no new funding was available to hospitals to help cover
costs of undocumented aliens not eligible for Medicaid. The recently
enacted Medicare Prescription Drug, Improvement, and Modernization Act of
2003 appropriated additional federal funding-$1 billion over fiscal years
2005 through 2008-for payments to hospitals and other eligible providers
of emergency medical services delivered to undocumented and certain other
aliens. According to the statute, the Secretary of Health and Human
Services must establish by September 1, 2004, a process for hospitals and
other providers to request these payments.
Border Patrol agents and U.S. port-of-entry officials encounter aliens
needing emergency medical care under different circumstances, but in most
cases Homeland Security is not responsible for these aliens' hospital
costs. Homeland Security may cover medical expenses only of people in its
custody, and persons needing emergency medical assistance encountered by
the Border Patrol and U.S. port-of-entry officials generally receive
hospital care without being taken into custody. Border Patrol officials
reported that their first priority when they encounter sick or injured
people is to seek medical assistance, generally without first determining
immigration status or taking them into custody. In some circumstances,
such as when a sick or injured person is of particular law enforcement
interest-for example, a suspected drug smuggler-Border Patrol agents may
take a person into custody at the hospital; in this case, Homeland
Security is responsible for the costs of care once the alien is in
custody. Although the Border Patrol tracks aliens in its custody, it does
not track the number of aliens not in custody whom it refers to hospitals.
At U.S. ports of entry, officials may encounter aliens seeking entry to
obtain emergency medical care from a U.S. hospital. Under certain
circumstances, U.S. port-of-entry officials may grant these aliens
humanitarian parole, a means of allowing temporary access into the United
States, for urgent medical reasons. According to officials, these types of
paroles do not occur often, and when they do, the aliens are not placed in
custody and Homeland Security is not responsible for medical expenses.
Data collected by Homeland Security's Bureau of Customs and Border
Protection's Office of Field Operations show that from June through
October 2003, 54 such paroles were authorized at ports along the
U.S.-Mexican border.
We are making a recommendation that as part of establishing a process for
paying hospitals' and other providers' claims under the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003, the
Secretary of Health and Human Services develop appropriate internal
controls to ensure that claims are paid only for unreimbursed emergency
services for undocumented or certain other aliens as designated in the
statute. In commenting on a draft of this report, CMS concurred with our
recommendation and stated that the agency expects to include proper
internal controls in its payment process before distributing any funds to
providers. CMS also indicated that it would be helpful for GAO to provide
insight into the specific internal controls that would be useful in
ensuring that claims are paid only for unreimbursed emergency services for
undocumented and certain other aliens. In response to CMS's request, we
amended our recommendation to be more specific. We also provided officials
in Homeland Security an opportunity to comment on a draft of this report.
In its comments, Homeland Security generally agreed with the report's
findings. Both agencies also provided technical comments, which we
incorporated as appropriate. The agencies' comment letters are reprinted
in appendixes III and IV.
Background According to INS, the estimated population of undocumented
aliens in the United States increased from 3.5 million in 1990 to about 7
million in 2000. Many states that had relatively few undocumented aliens
in 1990 experienced rapid growth of this population during the decade. The
estimated number of undocumented aliens residing in Georgia, for example,
rose from 34,000 in 1990 to 228,000 in 2000. INS estimates indicate that
the vast majority of undocumented aliens were concentrated in a few
states, with nearly 70 percent from Mexico.4
Undocumented aliens' use of medical services has been a long-standing
issue for hospitals, particularly among those located along the
U.S.-Mexican border. As required by the Emergency Medical Treatment and
Active Labor Act (EMTALA), hospitals participating in Medicare must
medically screen all persons seeking emergency care and provide the
treatment necessary to stabilize those determined to have an emergency
4U.S. Immigration and Naturalization Service, Estimates of the
Unauthorized Immigrant Population Residing in the United States: 1990 to
2000 (Washington, D.C.: 2003).
condition, regardless of income or immigration status.5 Two recent studies
have reported on hospitals' provision of care to undocumented aliens, but
they were limited in scope.6 National data sources on health insurance
coverage do not report the extent to which undocumented aliens have health
insurance or are otherwise able to pay for their medical care. Available
data on the broader category of foreign-born noncitizens suggests that a
large proportion may be unable to pay for their medical care. A U.S.
Census Bureau report indicates that in 2002, more than 40 percent of
foreign-born noncitizens residing in the United States, including
undocumented and some lawful permanent resident aliens, lacked health
insurance.7
Homeland Security's Bureau of Customs and Border Protection is responsible
for securing the nation's borders. The bureau's Border Patrol is
responsible for detecting and apprehending persons who attempt to enter
illegally between official ports of entry. The bureau's Office of Field
Operations oversees U.S. port-of-entry officials who inspect and determine
the admissibility of all individuals seeking to enter the United States at
official ports of entry. Both Border Patrol agents and U.S. port-of-entry
officials may come into contact with persons needing emergency medical
care. For example, Border Patrol agents may encounter persons suffering
from severe dehydration or who have been injured in vehicle accidents, and
U.S. port-of-entry officials may encounter persons with urgent medical
5EMTALA applies to hospitals participating in Medicare, the federal health
insurance program for seniors age 65 and over, and some disabled persons.
See 42 U.S.C. S: 1395dd (2000). According to federal regulations
implementing EMTALA, a hospital that provides emergency services must
medically screen all persons who come to the hospital seeking emergency
care to determine whether an emergency medical condition exists. If the
hospital determines that a person has an emergency medical condition, the
hospital must provide treatment necessary to stabilize that person or
arrange for an appropriate transfer to another facility. See 42 C.F.R. pt.
489 (2003).
6One study, conducted for the United States-Mexico Border Counties
Coalition, focused on the 24 counties located along the U.S.-Mexican
border [MGT of America, Medical Emergency: Costs of Uncompensated Care in
Southwest Border Counties (Austin, Tex.: 2002)]. The study estimated that
uncompensated care due to emergency medical treatment provided to
undocumented aliens was approximately $190 million, but the 95 percent
confidence interval around this estimate ranged from about $7 million to
about $373 million. Another study, conducted by the Florida Hospital
Association in 2002, examined hospital charges for uninsured noncitizens
in 56 Florida hospitals, or 26 percent of the acute care hospitals in that
state.
7U.S. Department of Commerce, Economics and Statistics Administration,
U.S. Census Bureau, Health Insurance Coverage in the United States: 2002
(Washington, D.C.: 2003).
needs, such as burn victims, seeking entry because the closest capable
medical facility is in the United States.
Border Patrol operations are divided into 21 sectors, but more than 95
percent of Border Patrol apprehensions in 2002 occurred in 9 sectors
bordering Mexico. Since the mid-1990s, the Border Patrol has been
implementing a strategy to strengthen security and disrupt traditional
pathways of illegal immigration along the border with Mexico. As we
reported in August 2001, however, one of the strategy's major effects has
been a shift in illegal alien traffic from traditional urban crossing
points such as San Diego, California, to harsher, more remote areas of the
border.8 Rather than being deterred from illegal entry, many aliens have
instead risked injury and death trying to cross mountains, deserts, and
rivers. To reduce the number of undocumented aliens who die or are injured
trying to cross the border illegally, INS in 1998 created the Border
Safety Initiative, whose focus includes searching for and rescuing those
who may have become lost. One element of the initiative is tracking the
number of aliens whom Border Patrol agents rescue, a subset of all Border
Patrol encounters with sick or injured aliens.9
U.S. port-of-entry officials inspect and determine the admissibility of
persons seeking entry at air, land, and sea ports of entry around the
country. Along the U.S.-Mexican border, officials at the 24 land ports of
entry, which cover 43 separate crossing points, conducted more than 250
million inspections in fiscal year 2003.10 The Secretary of Homeland
Security may parole-that is, allow temporary access into the United
8U.S. General Accounting Office, INS' Southwest Border Strategy: Resource
and Impact Issues Remain after Seven Years, GAO-01-842 (Washington, D.C.:
Aug. 2, 2001).
9The Border Patrol defines a "rescue" as a situation in which the lack of
intervention by the Border Patrol could result in death or serious bodily
injury to those suspected of attempting to enter illegally.
10Previously under the INS, each of the 43 crossing points was considered
a distinct port of entry for most purposes.
Effect of Undocumented Aliens on Hospitals' Uncompensated Care Costs Is
Uncertain
States-an otherwise inadmissible alien for urgent humanitarian reasons,
such as treatment for an emergency medical condition.11
The impact of undocumented aliens on hospitals' uncompensated care costs
remains uncertain. Determining the number of undocumented aliens treated
at a hospital is challenging because hospitals generally do not collect
information on patients' immigration status and because undocumented
aliens are reluctant to identify themselves. After speaking with experts
and hospital administrators, we determined that one potentially feasible
method for hospitals to estimate this population is to identify patients
without a Social Security number, recognizing that this proxy can over- or
underestimate undocumented aliens.12 We surveyed 503 hospitals in 10
states to collect information on patients without a Social Security number
and their effect on hospitals' uncompensated care levels-that is,
uncompensated care costs as a percentage of total hospital expenses. We
also included a question in the survey to determine what other methods, if
any, hospitals were using to track undocumented aliens to help assess how
well patients without a Social Security number served as a proxy for this
population.
Despite a concerted follow-up effort, we did not receive a sufficient
survey response to assess the impact of undocumented aliens on hospitals'
uncompensated care levels or to evaluate the lack of a Social Security
number as a proxy for undocumented aliens. (Details on our survey methods
and analysis appear in app. I.) Although about 70 percent of hospitals
responded to the survey, only 39 percent provided sufficient information
to evaluate the relationship between uncompensated care levels and the
proportion of care provided to patients without a Social Security number.
Of all responding hospitals, fewer than 5 percent reported having a method
other than the lack of a Social Security number alone to identify their
undocumented alien patients, and the methods used by these hospitals
varied. For example, one hospital identified
11Under the Immigration and Nationality Act, the Attorney General was
authorized to parole aliens into the United States for humanitarian
reasons. See 8 U.S.C. S: 1182(d)(5)(A) (2000). This authority was
transferred to the Secretary of Homeland Security and responsibility for
this authority was delegated to the level of port director. Humanitarian
paroles may also be granted for other reasons, such as to allow an
individual to attend the funeral of a close relative or to accompany
seriously ill family members.
12For example, U.S. citizens might not provide their Social Security
number, or undocumented aliens might provide a false or stolen Social
Security number.
Some Federal Funding Has Been Available but Not for All Undocumented Aliens or
Hospitals
undocumented aliens as those who were both Hispanic and lacked a Social
Security number; other hospitals identified undocumented alien patients
through foreign addresses or information from patient interviews.
Furthermore, the estimates produced by these other methods were
inconsistent with those produced by using lack of Social Security number
alone. Because we did not receive a sufficient survey response rate and
because we were unable to assess the accuracy of the proxy, we could not
determine the effect of undocumented aliens on hospital uncompensated care
levels. Until better information is available, assessing the relationship
between this population and hospitals' uncompensated care levels will
continue to pose methodological challenges.
Some federal funding has been available to assist with hospitals' costs of
treating undocumented aliens, but this funding has not covered care of all
undocumented aliens or all hospital services, and not all hospitals
receive it. Two funding sources are available through the Medicaid
program. First, Medicaid provides some coverage for eligible undocumented
aliens, such as low-income children and pregnant women. Not all
undocumented aliens are eligible for or enrolled in Medicaid, however, and
this coverage is limited to emergency medical services, including
emergency labor and delivery. Second, Medicaid DSH adjustments are
available to some hospitals treating relatively large numbers of
low-income patients, including undocumented aliens. Finally, under the
provisions of BBA, $25 million was available annually, from fiscal years
1998 through 2001, to assist certain states with their costs of providing
emergency services to undocumented aliens regardless of Medicaid
eligibility. According to state Medicaid officials in the states we
reviewed, states used these funds to help recover the state share of
Medicaid expenditures for undocumented aliens, and not to recover
hospitals' costs of care for undocumented aliens not eligible for
Medicaid. Recent legislation appropriated additional federal funding-$250
million annually for fiscal years 2005 through 2008-for payments to
hospitals and other eligible providers for emergency medical services
delivered to undocumented and certain other aliens.
Medicaid Covers Undocumented aliens may qualify for Medicaid coverage for
treatment of Emergency Medical an emergency condition if, except for their
immigration status, they meet Services for Eligible Medicaid eligibility
requirements. Medicaid coverage is also limited to care Undocumented
Aliens and services necessary for treatment of emergency conditions for
certain
legal aliens-including lawful permanent resident aliens who have resided
in the United States for less than 5 years and aliens admitted into the
United States for a limited time, such as some temporary workers. We refer
to Medicaid coverage for these groups of individuals-that is, those whose
coverage is limited to treatment of emergency conditions-as emergency
Medicaid. Because immigration status is a factor when states determine an
individual's Medicaid coverage, people applying for Medicaid are asked
about their citizenship and immigration status as a part of the Medicaid
eligibility determination process.13
State Medicaid officials in the 10 states that we reviewed reported
spending more than $2 billion in fiscal year 2002 for emergency Medicaid
expenditures (see table 1). Although states are not required to identify
or report to CMS their Medicaid expenditures specific to undocumented
aliens, several states provided data or otherwise suggested that most of
their emergency Medicaid expenditures were for services provided to
undocumented aliens. According to data provided by state Medicaid
officials in 5 of the 10 states, at least half of emergency Medicaid
expenditures in these states were for labor and delivery services for
pregnant women.
13In general, most aliens applying for Medicaid, including lawful
permanent resident aliens, must provide documentation of immigration
status and sign a declaration stating that they are in satisfactory
immigration status for Medicaid. Undocumented aliens and some other aliens
who are eligible only for emergency Medicaid are not required to provide
documentation of immigration status or sign a declaration of immigration
status.
Table 1: Federal and State Emergency Medicaid Expenditures for 10 States,
Fiscal Year 2002
Dollars in millions
State Expenditures
Arizona
Californiaa 776
Florida 223
Georgia
Illinois
New Jersey
b
New Mexico
New York 474
North Carolina
Texas 265
Total 2,034c
Source: State Medicaid officials.
aCalifornia emergency Medicaid expenditures do not include expenditures
for lawful permanent resident aliens.
bData for New Mexico are for state fiscal year 2002.
cNumbers do not add to total shown because of rounding.
Emergency Medicaid expenditures in the 10 states have increased over the
past several years but remain a small portion of each state's total
Medicaid expenditures. In 9 of the 10 states we reviewed, emergency
Medicaid expenditures grew faster than the states' total Medicaid
expenditures from fiscal years 2000 to 2002.14 For example, while
Georgia's total Medicaid expenditures increased by 44 percent during this
period, the state's emergency Medicaid expenditures increased 349
percent-nearly eight times as fast. Nevertheless, emergency Medicaid
expenditures in these states accounted for less than 3 percent of each
state's total Medicaid expenditures.
14In Arizona, emergency Medicaid expenditures increased from fiscal year
2000 to fiscal year 2002, but the percentage increase was not more than
that for total Medicaid expenditures. California's data on emergency
Medicaid expenditures excluded those for lawful permanent resident aliens.
Emergency Medicaid funding is limited in that not all undocumented aliens
treated at hospitals are eligible for Medicaid, not all eligible
undocumented aliens enroll in Medicaid, and not all hospital services
provided to enrolled undocumented aliens are covered by Medicaid.
o Not all undocumented aliens are eligible for Medicaid. Undocumented
aliens are eligible for emergency Medicaid coverage only if, except for
immigration status, they meet Medicaid eligibility criteria applicable to
citizens. Many state hospital association officials we interviewed
commented that hospitals were concerned about undocumented aliens who do
not qualify for Medicaid. To qualify, undocumented aliens must belong to a
Medicaid-eligible category-such as children under 19 years of age, parents
with children under 19, or pregnant women-and meet income and state
residency requirements. Arizona hospital and Medicaid officials said that
many undocumented aliens treated at their hospitals are only passing
through the state and cannot meet Medicaid state residency requirements.
However, comprehensive data are not available to determine the extent to
which undocumented aliens receiving care in hospitals are not eligible for
Medicaid coverage.
o Not all eligible undocumented aliens enroll in Medicaid. Factors
besides eligibility may also influence the number of eligible undocumented
aliens who actually enroll in Medicaid and receive coverage. According to
officials in most state Medicaid offices and hospital associations we
interviewed, fear of being discovered by immigration authorities is one
factor that can deter undocumented aliens from enrolling.15 Enrollment in
Medicaid involves filling out an application; providing personal
information such as income and place of residency; and, in some states, an
interview. Also, because undocumented aliens are generally covered by
Medicaid only for the duration of an emergency event, they may have to
reenroll each time they receive emergency services.
o Not all hospital services provided to undocumented aliens enrolled in
Medicaid are covered. Medicaid coverage for undocumented aliens is limited
to treatment of an emergency medical condition. Hospital
15At the same time, pre-enrollment policies in some states may facilitate
enrollment. In 2 of the 10 states we reviewed, Medicaid officials said
that undocumented aliens in their states may enroll in Medicaid before an
emergency condition arises; a third state allows undocumented women to
enroll during their third trimester of pregnancy. Medicaid officials in 2
of these states reported believing that such policies can increase
enrollment of undocumented aliens.
association officials in 7 of the 10 states we reviewed reported that a
concern of hospitals is the cost of treatment for undocumented aliens that
continues beyond emergency services and is not covered by Medicaid. Aside
from anecdotal information, however, data are not available to determine
the extent to which hospitals are treating undocumented aliens for
nonemergency conditions. Further, within federal guidelines, the services
covered under emergency Medicaid may vary from state to state.16 According
to an eligibility expert in CMS's Center for Medicaid and State
Operations, the agency's position is that each case needs to be evaluated
on its own merits, and the determination of what constitutes an emergency
medical service is left to the state Medicaid agency and its medical
advisors.
Medicaid Disproportionate Share Hospital Adjustments Aid Some Hospitals
Medicaid DSH payments are another source of funding available to some
hospitals that could help offset the costs of treating undocumented
aliens. Under the Medicaid program, states make additional payments,
called DSH adjustments, to qualified hospitals serving a disproportionate
number of Medicaid beneficiaries and other low-income people, which can
include undocumented aliens. As with other Medicaid expenditures, states
receive federal matching funds for DSH payments to hospitals. Medicaid DSH
allotments-the maximum federal contribution to DSH payments-totaled $5
billion in fiscal year 2002 in the 10 states we reviewed. All hospitals,
however, do not receive these funds. In general, a hospital qualifies for
DSH payments on the basis of the relative amount of Medicaid service or
charity care it provides. Care provided to undocumented aliens could fall
into one of these categories.17 The extent to which hospitals benefit from
16Two court cases have provided slightly different interpretations of the
scope of coverage under emergency Medicaid. See Greenery Rehabilitation
Group, Inc. v. Hammon, 150 F.3d 226 (2nd Cir. 1998) (stabilization after
initial injury ends Medicaid coverage unless another emergency develops)
and Scottsdale Healthcare, Inc. v. Arizona Health Care Cost Containment
System Admin., 75 P.3d 91 (Az. Sup. Ct. 2003) (stabilization after initial
injury does not determine whether Medicaid coverage ends). See also Luna
v. Division of Social Services, 589 S.E.2d 917 (N.C. Ct. App. 2004)
(adopting the reasoning of the Arizona Supreme Court).
17Hospitals that meet federally set criteria must be designated as DSH
hospitals. Under 42 U.S.C. S: 1396r-4(b) (2000), a hospital is deemed to
be a DSH hospital if its Medicaid inpatient utilization rate is at least
one standard deviation above the mean rate for hospitals receiving
Medicaid payments in the state or if the hospital's low-income utilization
rate exceeds 25 percent. The Medicaid inpatient utilization rate is the
number of Medicaid inpatient days as a percentage of total inpatient days.
The low-income utilization rate is calculated using total hospital revenue
for patient services that are paid by Medicaid, the amount of state and
local government cash subsides for patient services, and total hospital
charges for inpatient hospital services attributable to charity care.
DSH payments depends on how states administer the DSH program. Medicaid
officials in some states we reviewed said that some hospitals transfer
money to the state to support the state's share of the DSH program; such
transfers reduce the net financial benefit of DSH payments to these
hospitals.
Balanced Budget Act Funding for Undocumented Aliens Retained by States
Federal funding provided under BBA was made available to help states
recover their costs of emergency services furnished to undocumented aliens
regardless of Medicaid eligibility; the states we reviewed opted to use
this money to help recover the state share of emergency Medicaid
expenditures. BBA made $25 million available for each of fiscal years 1998
through 2001 for distribution among the 12 states with the highest numbers
of undocumented aliens.18 INS estimates of the undocumented alien
population in 1996 were used to identify the 12 states. Seven of the 10
states we reviewed were eligible for a portion of these allotments; 6 of
the 7 states claimed these funds.19 BBA allotments for these 6 states
accounted for 91 percent of the $25 million available each year. States
could use the funds to help recover (1) the state share of emergency
Medicaid expenditures for undocumented aliens and/or (2) other state
expenditures or those of political subdivisions of the state, for
emergency services provided to those undocumented aliens not eligible for
Medicaid. In each of the 6 states, Medicaid officials reported using the
state's entire BBA payment to recover a portion of what the state had
already paid for undocumented aliens under emergency Medicaid. These funds
were not used to cover hospitals' costs for the care of undocumented
aliens not eligible for Medicaid.
In commenting on BBA funding, state hospital association officials in 5 of
the 7 states we interviewed that were eligible for this funding said that
the amount was too low. For example, in fiscal year 2001, BBA allotments
for undocumented aliens for the two states with the largest ($11,335,298)
and smallest ($651,780) allotments accounted for less than 2 percent of
reported emergency Medicaid expenditures in those states. Officials from
several state hospital associations, as well as from the American Hospital
Association, reported that their members would like any additional federal
18Pub. L. No. 105-33, S: 4723, 111 Stat. 251, 515.
19The seven states in our review that qualified for BBA allotments are
Arizona, California, Florida, Illinois, New Jersey, New York, and Texas.
Of these, New Jersey did not claim any BBA funds.
funding for undocumented aliens to be distributed to hospitals more
directly. Some state hospital association and state Medicaid officials
nevertheless acknowledged matters that would need to be addressed in order
to distribute funds to hospitals for undocumented aliens not covered by
emergency Medicaid, including how hospitals would identify, define, and
document expenditures for emergency services provided to these
undocumented aliens. As mentioned above, fewer than 5 percent of hospitals
responding to our survey reported having a method for identifying
undocumented alien patients other than tracking patients without a Social
Security number.
New Federal Funding Will Be Available Beginning in Fiscal Year 2005
The recently enacted Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 appropriated additional funds, beginning in
fiscal year 2005, for payments to hospitals and other providers for
emergency medical services furnished to undocumented and certain other
aliens. Section 1011 of the act appropriated $250 million for each of
fiscal years 2005 through 2008 for this purpose.20 Two-thirds of the funds
are to be distributed according to the estimated proportion of
undocumented aliens residing in each state; the remaining one-third is
designated for the six states with the highest number of apprehensions of
undocumented aliens as reported by Homeland Security.21 These new funds
are to be paid directly to eligible providers, such as hospitals,
physicians, and ambulance services, for emergency medical services
provided to undocumented and certain other aliens that are not otherwise
reimbursed.22 Payment amounts will be the lesser of (1) the amount the
provider demonstrates was incurred for provision of emergency services or
(2) amounts determined under a methodology established by the Secretary of
Health and Human Services. By September 1, 2004, the Secretary is required
to establish a process for providers to request payments under the
statute.
20Pub. L. No. 108-173, S: 1011, 117 Stat. 2066, 2432.
21The law specifies that the proportion of undocumented aliens in each
state is as determined by INS as of January 2003 on the basis of the 2000
census.
22In addition to undocumented aliens, the statute pertains to certain
Mexican citizens permitted to enter the country for 72 hours or less and
aliens paroled into the United States for eligible services. Eligible
services include health care services required by EMTALA and related
hospital and ambulance services as defined by the Secretary of Health and
Human Services.
Homeland Security Is Usually Not Responsible for Hospital Costs of Aliens
Needing Emergency Medical Care Who Are Encountered by Border Patrol and
Port-of-Entry Officials
Both Border Patrol agents and U.S. port-of-entry officials come into
contact with people needing emergency medical assistance whom they refer
or allow to enter for care, but in most situations, Homeland Security is
not responsible for the resulting costs of emergency medical assistance.
Homeland Security may cover medical expenses only of people taken into
custody, but Border Patrol officials said that when they encounter people
with serious injuries or medical conditions, they generally refer the
individuals to local hospitals without first taking them into custody. The
agency does not track the number of aliens it refers to hospitals in this
fashion. Similarly, undocumented aliens arriving at U.S. ports of entry
with emergency medical conditions may be granted humanitarian parole for
urgent medical reasons, but they are not in custody, and Homeland Security
is not responsible for their medical costs.
The Border Patrol Generally Does Not Take Injured Aliens into Custody and Is
Therefore Not Responsible for Subsequent Medical Costs
Although the Border Patrol does not have an agencywide formal written
policy regarding encounters with sick or injured persons, Border Patrol
officials and documents we obtained indicate that the Border Patrol's
first priority in such encounters is to obtain medical assistance and, if
necessary, arrange transportation to a medical facility. According to
Border Patrol officials, agents generally do not take sick or injured
persons into custody on the scene, and because the individuals are not in
custody, Homeland Security is not responsible for their medical costs.
Under federal law, the U.S. Public Health Service, within the Department
of Health and Human Services, is authorized to pay the medical expenses of
persons in the custody of immigration authorities.23 Under an interagency
agreement, Homeland Security is responsible for reimbursing the Department
of Health and Human Services for hospital care provided to such persons.
The statute does not grant the Public Health Service the
2342 U.S.C. S: 249 (2000).
authority to cover the medical expenses of aliens not in custody, and
therefore Homeland Security is not responsible for these medical costs.24
Border Patrol officials provided a number of different reasons for not
first taking injured or sick persons they have encountered into custody.
Several officials said, for example, that Border Patrol agents assume a
humanitarian role when encountering persons needing emergency medical
care, and their first concern is obtaining medical assistance. In
addition, many officials said that an injured or sick person's condition
may affect his or her ability to reliably answer questions about
immigration status. Some Border Patrol officials and documents indicated
that taking all sick or injured persons into custody would not be
consistent with the agency's primary enforcement mission. They explained
that the Border Patrol does not have the resources to pursue a prosecution
of every possible violation of law, so agents exercise their prosecutorial
discretion and concentrate resources on those violations that will produce
maximum results in accomplishing their mission. Further, according to
statute, an immigration officer may not arrest an alien without a warrant
unless the officer has reason to believe that the person is in the United
States in violation of immigration law and is likely to escape before a
warrant can be obtained.25 Some officials maintained that when aliens
encountered need medical attention and are considered unlikely to escape,
they are generally not taken into custody.
Border Patrol officials reported that in certain instances, agents may
take particular persons into custody while they are in the hospital. For
example, if agents encounter an individual who is of particular law
enforcement interest-such as a suspected smuggler of drugs or aliens- they
may take that individual into custody. Doing so may involve posting a
guard at the hospital. In these circumstances, Homeland Security would
24Under 42 U.S.C. S: 249, the Public Health Service is authorized to
provide medical care for persons who are "detained by" INS. (INS's
functions were transferred to Homeland Security effective Mar. 1, 2003.)
The term "detained" is not defined in the statute or in the agency's
regulations, but its meaning was addressed in City of El Centro v. United
States, 922 F.2d 816 (Fed. Cir. 1990). In this case, the court determined
the meaning of "detained" by applying principles derived from analogous
situations, such as those involving seizures of persons under the Fourth
Amendment. According to the court, a seizure occurs when the government
acts intentionally to deprive a person of freedom of movement.
258 U.S.C. S: 1357(a)(2) (2000).
assume responsibility for any costs of care once the individual is placed
into custody.
Border Patrol agents in the Miami sector encounter sick or injured aliens
under conditions slightly different from those in the Southwest, but their
practices in such encounters are generally consistent with those reported
by the nine Southwest sectors and with Border Patrol's general unwritten
policy and practice. According to Miami sector officials, because the
sector has fewer than 100 agents to cover more than 1,600 coastal miles in
Florida, Georgia, South Carolina, and North Carolina, Miami sector agents
typically come into contact with aliens in response to calls from other
law enforcement agencies. If the other law enforcement agency called for
local emergency medical services before Miami Border Patrol sector agents
determined the person's immigration status, Border Patrol agents would not
take that person into custody and Homeland Security would not be
responsible for his or her medical costs. According to Miami sector
officials, Homeland Security is responsible for medical costs only for
those people taken into custody after their immigration status has been
determined, and agents follow up at the hospital only with these patients.
If another law enforcement agency refers the person to the hospital,
Border Patrol agents said they do not follow up unless called by the
hospital upon the patient's release, and then only if agents are available
to respond.
Undocumented aliens are also intercepted at sea by the U.S. Coast Guard.
Coast Guard cutters have trained medical personnel on board, and according
to officials in the agency's Migrant Interdiction Division, when Coast
Guard personnel encounter sick or injured undocumented aliens, their
practice is to treat them at sea to the extent possible and return them to
their home countries once they are stabilized.26 On occasion, persons
encountered at sea with severe medical conditions may need to be
transported to shore or directly to a hospital, but this situation rarely
occurs. In fiscal year 2002, the Coast Guard brought 9 aliens to shore for
medical care and in fiscal year 2003, brought in 14. According to Coast
Guard officials, the agency has no responsibility to pay for care of those
aliens brought to shore for medical treatment.
26Executive Order 12807 directs the Coast Guard to interdict migrants at
sea beyond U.S. territorial limits and return them to their countries of
origin.
The Border Patrol's Total Encounters with Sick or Injured Aliens Is Unknown
It is unknown how often the Border Patrol refers sick or injured aliens
not taken into custody to hospitals. Border Patrol officials said the
agency does not track the total number of encounters with sick or injured
persons. What is known is how much the Department of Health and Human
Services pays for care, subject to reimbursement from Homeland Security,
for those already in Border Patrol custody. In fiscal year 2003, the
Department of Health and Human Services paid about $1.7 million in medical
claims for people in Border Patrol custody, of which about $1.2 million
was for hospital inpatient and outpatient expenses. Data are also
available on Border Patrol encounters with aliens that the agency
categorized as rescues-that is, incidents in which death or serious injury
would have occurred had Border Patrol agents not responded-but these data
do not include all encounters with aliens who were referred to hospitals
without first having been taken into custody. Our analysis of Border
Patrol rescue data for the nine sectors on the U.S.-Mexican border shows
that in fiscal year 2002 about 360 suspected undocumented aliens were
rescued and referred to hospitals for care.27 Rescued aliens were referred
to hospitals for a variety of medical reasons, including heat exposure,
possible heart attack, injuries, and complications from pregnancy. Nearly
half the referrals occurred in the Tucson Border Patrol sector, which
covers most of Arizona.
Homeland Security Is Not Responsible for Medical Costs of Aliens Granted
Humanitarian Parole for Urgent Medical Reasons, but Few Such Paroles Are
Granted
Homeland Security is not authorized to pay the medical costs of aliens
granted humanitarian parole at U.S. ports of entry for urgent medical
reasons because these individuals are not in custody. Humanitarian paroles
for urgent medical reasons are granted by port directors on a caseby-case
basis and, according to most officials responsible for ports of entry whom
we interviewed, only when the alien is in medical distress or a
"life-or-death situation," such as after a severe head trauma. Some
port-ofentry officials cited instances when they turned aliens away
because they believed that the medical conditions were not urgent and
medical facilities in Mexico could provide treatment. When humanitarian
paroles for urgent medical reasons are granted, a formal record of arrival
is completed to document the aliens' entry into the United States.
Sometimes, port-of-entry officials know in advance that an injured alien
will be arriving, and the form is completed beforehand. If medical urgency
prevents completion of this form at the port of entry, an official will go
to the hospital to obtain the necessary information. The length of time a
paroled alien is allowed to
27Not all persons rescued by the Border Patrol require a referral for
hospital care.
remain in the United States is determined case by case but cannot exceed 1
year. Like all other aliens who enter for a temporary period, a paroled
alien is expected to leave when his or her authorized stay ends.
Office of Field Operations data show that from June 1 through October 31,
2003, officials at 7 of the 24 ports of entry along the U.S.-Mexican
border granted a total of 54 humanitarian paroles for urgent medical
reasons.28 Almost two-thirds (35) of these paroles were granted at the
Columbus port of entry in New Mexico and brought to one local hospital. A
Columbus port-of-entry official stated that the limited capability of the
nearby medical facility in Mexico contributes to the high number of
humanitarian paroles granted for urgent medical reasons at the port. The
hospital that treated most of the paroled patients reported receiving no
payment for any of the 27 patients paroled from June through August 2003
and noted that 4 of these patients were later transferred to other
hospitals for further care. The other 19 paroles occurred at three ports
of entry in Arizona and three ports of entry in Texas, near small towns
straddling the border.
Most (17 of 24) of the Southwest border ports of entry reported granting
no paroles for urgent medical reasons from June through October 2003.
Officials at three ports of entry we reviewed granted no humanitarian
paroles for urgent medical reasons during that time and are located near
large cities in Mexico. Officials at one of these ports of entry told us
that hospital care is available in the Mexican cities across the border,
so that Mexican residents need not be treated at U.S. hospitals. Hospital
officials in Arizona noted that several Arizona hospitals and the U.S.
government have provided funds and equipment to help improve the
capabilities of nearby Mexican medical facilities and that these measures
helped reduce their burden of cases from Mexico.
Finally, although aliens may be granted humanitarian parole for urgent
medical reasons, several port-of-entry officials told us that the majority
of persons seeking entry into the United States for emergency medical care
have proper entry documents. For example, some aliens arriving at U.S.
hospitals may be Mexican nationals with border crossing cards, which allow
entry into the United States within 25 miles of the border for business or
pleasure for up to 72 hours. Another port official reported that
28In response to our request, Homeland Security's Bureau of Customs and
Border Protection's Office of Field Operations collected data starting in
June 2003 on the number of humanitarian paroles granted for urgent medical
reasons at ports of entry located along the U.S.-Mexican border.
Conclusions
Recommendation for Executive Action
Agency Comments
many U.S. citizens live in Mexico and sometimes arrive in ambulances to go
to U.S. hospitals. According to some officials responsible for ports of
entry, hospitals may not be fully aware of the immigration status of
patients who have crossed the border to obtain emergency medical care;
this uncertainty may create the impression that ports are granting more
humanitarian paroles for urgent medical reasons than they are.
Despite hospitals' long-standing concern about the costs of treating
undocumented aliens, the extent to which these patients affect hospitals'
uncompensated care costs remains unknown. The lack of reliable data on
this patient population and lack of proven methods to estimate their
numbers make it difficult to determine the extent to which hospitals treat
undocumented aliens and the costs of their care. Likewise, with respect to
undocumented aliens referred to hospitals but not first taken into custody
by the Border Patrol, neither the Border Patrol nor hospitals track their
numbers, making it difficult to estimate these patients' financial impact
on hospitals. Until reliable information is available on undocumented
aliens and the costs of their care, accurate assessment of their financial
effect on hospitals will remain elusive, as will the ability to assess the
extent to which federal funding offsets their costs. The availability of
new federal funding under the Medicare Prescription Drug, Improvement, and
Modernization Act of 2003 may offer an incentive for hospitals serving
undocumented aliens to collect more reliable information on the numbers of
these patients and the costs of their care.
To help ensure that funds appropriated by the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 are not improperly spent, we
recommend that the Secretary of Health and Human Services, 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.
We provided officials in CMS and Homeland Security an opportunity to
comment on a draft of this report. In its comments, CMS concurred with our
recommendation that the Secretary develop appropriate internal controls
and stated that the agency expects to develop appropriate internal
controls regarding funds appropriated by section 1011 of the
Medicare Prescription Drug, Improvement, and Modernization Act. The agency
said it is currently developing a process for providers to claim these
funds and indicated that it would be helpful for GAO to provide insight
into the specific internal controls that would be useful in ensuring that
claims are paid only for unreimbursed emergency services for undocumented
and certain other aliens. In response to CMS's request, we amended our
recommendation to be more specific. CMS also agreed that the new federal
funding may offer an incentive for those hospitals incurring significant
costs for undocumented aliens to collect more reliable information on the
number of undocumented alien patients they treat and the costs of their
care, but it also noted that other providers, especially those who do not
regularly see undocumented aliens in emergency department settings, may
choose to continue to provide uncompensated care to this population
without ever trying to document the costs. CMS also provided technical
comments, which we incorporated as appropriate. Homeland Security
generally agreed with the report's findings and provided some technical
comments regarding parole and the numbers of ports of entry, which we
incorporated as appropriate.
As agreed with your offices, unless you publicly announce the contents of
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its
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GAO
Web site at http://www.gao.gov.
If you have any questions, please contact me at (202) 512-7119. Additional
GAO contacts and the names of other staff members who made major
contributions to this report are listed in appendix V.
Janet Heinrich
Director, Health Care-Public Health Issues
List of Requesters
The Honorable W. Todd Akin
The Honorable Joe Baca
The Honorable Cass Ballenger
The Honorable Nathan Deal
The Honorable Mark Foley
The Honorable Charles A. Gonzalez
The Honorable Luis V. Gutierrez
The Honorable Ruben Hinojosa
The Honorable John L. Mica
The Honorable Grace F. Napolitano
The Honorable Solomon P. Ortiz
The Honorable Ed Pastor
The Honorable Silvestre Reyes
The Honorable Lucille Roybal-Allard
The Honorable Jose E. Serrano
House of Representatives
Appendix I: Survey Methodology and Results
To collect information on the extent to which hospitals' uncompensated
care costs are related to treating undocumented aliens, we mailed a
questionnaire to a sample of more than 500 hospitals in 10 states-
Arizona, California, Florida, Georgia, Illinois, New Jersey, New Mexico,
New York, North Carolina, and Texas. We selected the 4 Southwest
states-Arizona, California, New Mexico, and Texas-because uncompensated
care costs due to treating undocumented aliens has been a long-standing
issue for hospitals located in communities near the U.S.-Mexican border.
We selected the other 6 states because high estimated numbers of
undocumented aliens resided there in 2000, according to the Immigration
and Naturalization Service (INS). In all, the 10 states comprised an
estimated 78 percent of the population of undocumented aliens in the
United States in 2000. (See table 2.)
Table 2: Estimated Undocumented Aliens Residing in 10 States, 2000
Percentage of total estimated
undocumented aliens residing
State Estimated number in the United States
All States 7,000,000 100.0
California 2,209,000
Texas 1,041,000
New York 489,000
Illinois 432,000
Florida 337,000
Arizona 283,000
Georgia 228,000
New Jersey 221,000
North Carolina 206,000
New Mexico 39,000
Source: U.S. Immigration and Naturalization Service.
Survey Sample We sent our survey to a randomly selected stratified sample
of 503 of 1,637 short-term, nonfederal, general medical and surgical care
hospitals that- according to either the American Hospital Association's
annual survey database, fiscal year 2000, or the Centers for Medicare &
Medicaid Services Provider of Service File as of the end of 2000-had an
emergency department. Table 3 shows the characteristics of the universe
from which the hospitals were sampled.
Appendix I: Survey Methodology and Results
Table 3: Characteristics of Universe from Which Hospitals Were Sampled
Number of Percentage Characteristic hospitals of hospitals
All hospitals 1,637 100
Ownership
Not-for-profit 967
Investor owned 317
Government owned 353
Number of staffed beds
Less than or equal to 73 415
More than 73 and less than or equal to 279 814
More than 279 408
County poverty level
Less than or equal to 11% 448
More than 11 percent and less than or equal to 19 percent 943
More than 19% 246
State
Arizona 53
California 335
Florida 175 11
Georgia 141 9
Illinois 186 11
New Jersey 71 4
New Mexico 31 2
New York 187 11
North Carolina 107 7
Texas 351 21
Source: GAO analysis of American Hospital Association and
U.S. Census Bureau data.
Notes: Because of rounding, percentages may not add to 100. Data from the
American Hospital Association's Annual Survey Database, Fiscal Year 2000,
and the U.S. Census Bureau's Census 2000 Demographic Profiles.
From this universe of hospitals, we sampled 100 percent of the hospitals
in Arizona and New Mexico. In the other 8 states, we stratified the sample
by
Appendix I: Survey Methodology and Results
Survey Questions
Lack of Social Security Number as a Proxy for Undocumented Aliens
state, hospital ownership, and estimates of undocumented aliens by
county.1
Our survey included questions about the hospital, such as (1) whether it
had an emergency department in fiscal year 2002; (2) the number of staffed
beds on the last day of fiscal year 2002; (3) financial information on bad
debt and charity care charges, total expenses, gross patient revenue, and
other operating revenue; (4) whether the hospital routinely collected
Social Security numbers and, for fiscal year 2002, total inpatient days
and the number of inpatient days for people without a Social Security
number, our proxy for undocumented aliens; and (5) as a means of
evaluating the accuracy of the proxy, whether the hospital used a method
other than lack of a Social Security number alone to identify undocumented
aliens.
After speaking with hospital officials, we concluded that although lack of
a Social Security number could potentially over- or underestimate the
actual population of undocumented aliens treated by a hospital, it might
be the least burdensome way for hospitals to provide us with information
for our survey that would allow us to attempt to identify care given to
undocumented aliens. We included a question on the survey asking hospitals
to report the number of inpatient days for patients without a Social
Security number. We used this information, along with total inpatient days
reported, to calculate the proportion of inpatient days for patients
without a Social Security number in order to approximate the proportion of
inpatient care provided to undocumented aliens. Although undocumented
aliens may first seek care through hospital emergency departments, we
focused on inpatient care because hospital officials reported that patient
data, including Social Security numbers, are generally more complete for
persons admitted as inpatients; persons treated in the emergency
department are often released before such information can be collected.
Further, although a large number of patients may be seen in emergency
departments, hospital officials reported that the majority of
uncompensated care cost is incurred in inpatient settings.
1For sampling purposes, we developed estimates of undocumented aliens as a
percentage of the population by county by (1) dividing INS estimates of
the number of undocumented aliens in each state by Census Bureau estimates
of the number of foreign-born noncitizens in the state and (2) applying
this ratio to Census Bureau estimates of the number of foreignborn
noncitizens in each county.
Appendix I: Survey Methodology and Results
Survey Pretesting and Response
Data from Responding Hospitals
We could not establish the accuracy of our proxy before carrying out the
survey, so to assess our proxy, we included a survey question on
hospitals' methods for estimating undocumented aliens. We were, however,
unable to determine our proxy's accuracy. Fewer than 5 percent of
hospitals responding to the survey reported that they had methods of
estimating undocumented aliens other than lack of Social Security number
alone. These methods varied among the hospitals and led to estimates
inconsistent with those based on lack of a Social Security number.
We also pretested our questionnaire in person with officials at six
hospitals to determine if it was understandable and if the information was
feasible to collect, and we refined the questionnaire as appropriate. We
conducted follow-up mailings and telephone calls to nonrespondents. We
obtained responses from 351 hospitals, for an overall response rate of
about 70 percent. Of the hospitals that returned surveys, 300 provided
financial information to calculate uncompensated care levels-defined as
uncompensated care as a percentage of total expenses-but only 198 (39
percent of all hospitals surveyed) provided sufficient information to
allow us to examine the relationship between hospitals' uncompensated care
levels and the percentage of inpatient days for patients without a Social
Security number. We performed checks for obvious errors and inconsistent
data but did not independently verify the information hospitals provided
in the survey.
Three hundred hospitals provided sufficient information to calculate
uncompensated care levels. Table 4 shows financial information for these
hospitals; this information is not generalizable to the overall
population.
Table 4: Financial Information for Responding Hospitals
Financial information Median
Total uncompensated care costs (dollars) $2.6 million
Total expenses (dollars) $58.0 million
Uncompensated care levels (percentage) 5.0
Source: GAO.
Notes: Based on GAO's 2003 survey of hospitals. Results are limited to the
300 respondents that provided sufficient information and are not
generalizable to the overall population.
Appendix I: Survey Methodology and Results
For the 198 hospitals that provided sufficient information, we examined
the variation in uncompensated care levels by percentage of inpatient days
attributable to patients without a Social Security number after dividing
the distribution of the latter into thirds. Table 5 shows this information
for these 198 hospitals; this information is not generalizable to the
overall population.
Table 5: Uncompensated Care Levels by Tertile of Percentage of Inpatient
Days Attributable to Patients without a Social Security Number
Median Minimum Maximum
uncompensated uncompensated uncompensated
care level care level care level
Tertile (percentage range ) (percent) (percent) (percent)
Bottom third (0-0.24) 4.3 0.0 17.5
Middle third (> 0.24-1.66) 4.3 1.3 14.6
Top third (> 1.66-19.71) 4.9 1.4 17.0
Source: GAO.
Notes: Based on GAO's 2003 survey of hospitals. Results are limited to the
198 respondents that provided sufficient information and are not
generalizable to the overall population.
Factors other than the percentage of inpatient days attributable to
patients without a Social Security number, such as the extent to which
hospitals treat uninsured patients (including uninsured patients with a
Social Security number), could affect the variation in uncompensated care
levels among hospitals.
Since a high proportion of hospitals we surveyed did not provide us with
information to calculate the percentage of inpatient days attributable to
patients without a Social Security number, and we could not validate the
accuracy of this proxy, we cannot evaluate either the relationship between
the percentage of inpatient days attributable to patients without a Social
Security number and hospitals' uncompensated care levels, or to what
extent hospitals' uncompensated care costs are related to treating
undocumented aliens.
Appendix II: Methodology for Determining Federal Funding Sources and Homeland
Security's Responsibility for Medical Costs
To determine the availability of federal funding sources to assist
hospitals with the costs of treating undocumented aliens, we reviewed
relevant literature and legal documents, spoke with officials at the
Centers for Medicare & Medicaid Services (CMS), and interviewed state
Medicaid and hospital association officials in the same 10 states in which
we surveyed hospitals-Arizona, California, Florida, Georgia, Illinois, New
Jersey, New Mexico, New York, North Carolina, and Texas. Specifically, to
assess the availability of Medicaid to cover hospitals' costs of treating
undocumented aliens, we reviewed Medicaid eligibility and Medicaid
disproportionate share hospital (DSH) laws and regulations and interviewed
state Medicaid officials about Medicaid coverage, eligibility
requirements, and DSH programs in their states. We collected data on total
state Medicaid expenditures and DSH allotments from CMS and on emergency
Medicaid expenditures from state Medicaid officials. We assessed the
reliability of the above data by interviewing agency individuals
knowledgeable about the data. After reviewing state expenditure and DSH
allotment figures for logic and following up where necessary, we
determined that these data sources were sufficiently reliable for the
purposes of this report. We also reviewed published reports and spoke with
state hospital association officials about impediments to obtaining
Medicaid coverage for undocumented aliens treated at hospitals. To
determine the availability of federal funds allotted to states through the
Balanced Budget Act of 1997 (BBA) for emergency services furnished to
undocumented aliens, we obtained information on BBA allotments to states
and interviewed state Medicaid officials in the seven states in our review
that were eligible to receive these funds about how they used the funds.
We also reviewed CMS guidance relevant to BBA's section on emergency
medical services for undocumented aliens and interviewed hospital
association officials. In addition, we reviewed the provisions in the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
pertaining to payments to providers for treating undocumented and other
aliens, and we interviewed CMS officials about their plans to implement
these provisions.
To determine the responsibility of the Department of Homeland Security
(Homeland Security) for covering the medical costs of sick or injured
aliens encountered by Border Patrol agents, we reviewed relevant laws,
regulations, and legal opinions and interviewed Border Patrol officials in
headquarters, in the nine sectors along the U.S.-Mexican border, and in
the Miami sector. We also interviewed Coast Guard officials about their
encounters with sick or injured aliens at sea. We obtained data from the
Department of Health and Human Services' Division of Immigration Health
Services on payments for medical claims for aliens in Border Patrol
custody. We also obtained and analyzed data from the Border Patrol's
Appendix II: Methodology for Determining Federal Funding Sources and
Homeland Security's Responsibility for Medical Costs
Border Safety Initiative database to determine how many of the suspected
undocumented aliens counted as rescues by the Border Patrol were
transported to local hospitals. We assessed the reliability of these data
by interviewing agency officials knowledgeable about the data, reviewing
the data for logic and internal consistency, and following up with
officials where necessary. We determined that the data on payments for
medical claims for aliens in Border Patrol custody and on suspected
undocumented aliens rescued by the Border Patrol were sufficiently
reliable for the purposes of this report.
To determine the responsibility of Homeland Security for covering the
medical costs of aliens seeking humanitarian parole for urgent medical
reasons at ports of entry, we interviewed officials in the four Field
Operations offices responsible for ports of entry along the U.S.-Mexican
border and at five of the ports of entry: Brownsville, Texas; Columbus,
New Mexico; Douglas, Arizona; El Paso, Texas; and San Ysidro, California.
At the El Paso port of entry, we interviewed officials at the port's
busiest crossing point, Paso Del Norte. We selected these five ports of
entry for geographic diversity or because they had granted a large number
of paroles. We reviewed relevant laws, regulations, and procedures
regarding parole authority. Because Homeland Security did not normally
collect data on the number of paroles granted specifically for urgent
medical treatment, we requested that the Office of Field Operations record
the number of such paroles granted at ports of entry along the
U.S.-Mexican border.
Appendix III: Comments from the Centers for Medicare & Medicaid Services
Appendix III: Comments from the Centers for Medicare & Medicaid Services
Appendix IV: Comments from the
Department of Homeland Security
Appendix V: GAO Contacts and Staff Acknowledgments
GAO Contacts Acknowledgments
(290226)
Kim Yamane, (206) 287-4772 Linda Y. A. McIver, (206) 287-4821
In addition to those named above, Carla D. Brown, Ellen W. Chu, Jennifer
Cohen, Michael P. Dino, Jennifer Major, Kevin Milne, Dae Park, Karlin
Richardson, Sandra Sokol, Adrienne Spahr, Leslie Spangler, and Marie C.
Stetser made key contributions to this report.
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