Catastrophic medical bills

Limits on Liability for Payments due from Patients

If a patient’s medical expenses exceed the higher of 30 percent of family income or the equity in family assets, the Hospital will waive the excess billing. Family income is determined as provided in paragraph A – Income Test; and equity in family assets is determined as provided in paragraph B – Asset Test.

Income Test

1. Income considered available to pay patient’s medical expenses
   1. The Hospital will multiply the family income by 30%
   2. The Hospital will determine the patient’s allowable medical expenses
   3. The Hospital will compare 30% of the family income to the total of the patient’s allowable medical expenses. If the total of the allowable medical expenses is greater than 30% of the family income, then the patient meets the catastrophic charity care qualification.  The Hospital will limit patient liability for medical expenses to 30% of the family’s income.  Amounts that exceed this limit will be eligible for charity care.
      
      For Example: Family income of $70,000 per year and medical expenses of $45,000.  Thirty-percent of the family’s annual income is $21,000; the family’s medical expenses of $45,000 exceed this amount.  The family should therefore be eligible for a charity write-off of $24,000.

OR

Asset Test

2. Assets considered available to pay patient’s medical expenses
   1. Equity in a real estate, other than the patient’s personal residence, securities or other assets (e.g.. rental property, agricultural use) is considered available to pay the patient’s medical expenses.
   2. $225,000 represents the median value of a home in Salem, Oregon as of April 2006. The Hospital considers this amount to be protected from consideration as a funding source.  Equity in a patient’s personal residence over and above $225,000 will be considered as available to pay medical liabilities.
   3. The catastrophic limit under this test will be established at 100% of the equity in real property over and above the first $225,000 in a primary residence, and 100% of the equity in other real property producing income.

For example:                

      $280,000 Market Value
   - $100,000 Mortgage
     $180,000 Net value
     $225,000 protected so equity would not be considered