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IRS advises "Not for Profit " Hospitals on Collection Practices

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http://www.treasury.gov/connect/blog/Pages/Charitable-Hospitals-Roles-and-Responsibilities.aspx

 

 

More than half of the nation’s hospitals are charitable hospitals and they play a key role in improving the health of the communities they serve. As charitable organizations, these hospitals receive many benefits, including a tax exemption on their earnings and the ability to receive tax-deductible contributions, and in return it is their responsibility to provide benefits back to their communities. As we reach the end of the year, we want to remind charitable hospitals that they must also take important steps to protect patients – including protecting them from hidden and high prices, and unreasonable collection actions.

Today, Treasury and the IRS issued two notices providing guidance for these charitable hospitals. The Affordable Care Act added new requirements, which are already in effect, to help ensure access to financial assistance for patients of charitable hospitals, protect patients from abusive collections practices, and require hospitals to assess and address the health needs of the communities they serve.
The first notice includes a proposed revenue procedure providing a process for charitable hospitals that fail to satisfy the requirements under section 501® of the Internal Revenue Code – which provides their charitable, tax-exempt designation – to follow to correct and disclose those failures. In return for following this corrections process, charitable hospitals would receive assurance that they will not face possible loss of tax-exempt status as long as their mistakes were not willful or egregious. This also benefits the broader public because it encourages hospitals to closely review their procedures, quickly correct any errors, and remain transparent with the community and the IRS about any failures to meet section 501® requirements.
The second notice​ provides reliance on proposed regulations already released under section 501® regarding charitable hospitals’ responsibilities. In June 2012, Treasury and the IRS published proposed regulations addressing the requirement that charitable hospitals, as a condition of receiving tax exemption, establish a financial assistance policy, an emergency medical care policy, and limitations on charges and collection activities against individuals that are eligible for financial assistance. Specifically, the proposed rules require tax-exempt hospitals to clearly define the financial assistance available, how to apply for it, and publicize their policies so that community members are aware that aid is available. The proposed regulations also set forth provisions to curb the use of discriminatory pricing and collection schemes – by providing that individuals eligible for financial assistance cannot be charged more for medically necessary care than insured individuals, explicitly prohibiting collections activities in emergency rooms, and requiring tax-exempt hospitals to re-issue previous bills at a discounted amount if a patient is later determined to be eligible for financial assistance. Following this, in April 2013, Treasury and the IRS published proposed regulations addressing the requirement that charitable hospitals conduct community health needs assessments and adopt implementation strategies to address the community health needs identified. The proposed regulations also address the consequences for failing to meet any of the section 501® requirements
As background on the section 501® requirements, the Affordable Care Act requires charitable (tax-exempt) hospitals to:
  • Limit charges. Hospitals may not charge individuals eligible for financial assistance more for emergency or other medically necessary care than the amounts generally billed to patients with Medicare or private commercial insurance.
  • Establish and disclose financial assistance policies. Each hospital must establish and widely publicize a financial assistance policy that clearly describes to patients the eligibility criteria for obtaining financial assistance and the method for applying for financial assistance.
  • Abide by reasonable billing and collection requirements. Charitable hospitals are prohibited from engaging in certain collection methods (for example, sending a debt to a credit agency or garnishing wages) until they make reasonable efforts to determine whether an individual is eligible for assistance under the hospital’s financial assistance policy.
  • Perform a community health needs assessment. Each charitable hospital must conduct and publish a community health needs assessment at least once every three years – and disclose on the tax form it files annually the steps it is taking to address the health needs identified in the assessment.

 

 

So who would we file complaints with now, the IRS?

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Good!

 

Reasonable billing practices - ha! My husband and I get our medical care through a nonprofit hospital system in our area. I had to call and write them repeatedly, to get them to stop billing us for services we included in our recent bankruptcy. They were properly notified several times of the bankruptcy, but wouldn't stop billing us and threatening to send our debt to a collections agency, until I threatened legal action.

Edited by RedHairedLady

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pinned topic, or in the laws, laws laws forum? ( which very few folks read,,,, )

 

i think it should be here.

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I will be looking into who to file a complaint with, regarding a hospital's disregard of this policy.

Edited by JayB27

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Law of unintended consequence potentially. It seems to pressure a charitable organization to accept only what is subsidized by the FG and across the board rate jacking to stay afloat. I'm sure the AHA and private insurance are already in a co-op think tank.

The level of care will most likely suffer due to the loss of operating capital. Just my opinion.

Great for those that are in need of assistance.

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I will be looking into who to file a complaint with, regarding a hospital's disregard of this policy.

 

possibly the IRS.

 

The principal authors of this notice are Garrett Gluth of the Tax Exempt and
Government Entities Division of the IRS and Amber Mackenzie of the Office of Division
Counsel/Associate Chief Counsel (Tax Exempt and Government Entities). However,
other personnel from the IRS and Treasury Department participated in developing this
notice. For further information regarding this notice, contact Mr. Gluth at (202) 317-
8413 or Ms. Mackenzie at (202) 317-5800 (not toll-free numbers).

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Law of unintended consequence potentially. It seems to pressure a charitable organization to accept only what is subsidized by the FG and across the board rate jacking to stay afloat. I'm sure the AHA and private insurance are already in a co-op think tank.

The level of care will most likely suffer due to the loss of operating capital. Just my opinion.

Great for those that are in need of assistance.

 

Sweetie, they rate jack anybody they can.

 

folks who aren't covered by insurance are especially vulnerable.

 

 

they get a tax exemption for being charitable - therefore our taxes go to make up the lack.

 

I had Gall bladder surgery a few years back .... the bill would have been 31K for a 3 day stay if I hadn't had insurance

 

but the rate they charge the insurance since the hospital was in network; 11K.

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the Final rule ( heavy wading )

 

http://www.gpo.gov/fdsys/pkg/FR-2014-12-31/pdf/2014-30525.pdf

 

sysnopis

 

The final rules and regulations clarify the broad provisions of the Patient Protection and Affordable Care Act of 2010 (PPACA), which added Section 501® to the Internal Revenue Code (Code) imposing the following four additional requirements on charitable hospitals to maintain tax-exempt status:

 

1.Conduct a community health needs assessment (CHN Assessment) at least once every three years and adopt an implementation strategy to meet those community health needs, or be subject to a $50,000 tax penalty.

2.Establish a written financial assistance policy which prescribes the eligibility criteria for assistance, how patients apply for assistance, and how they are charged for care under the policy, and a written emergency medical care policy requiring emergency care to individuals regardless of their eligibility for financial assistance.

3.Limit the use of gross charges and the amounts charged to those patients who qualify for financial assistance for emergency or other medically necessary care to not more than the amounts generally billed to individuals who have insurance covering such cases.

4.Make reasonable efforts to determine whether an individual is eligible for assistance under the financial assistance policy before engaging in extraordinary collection actions (EC Actions).

 

http://www.treasury.gov/connect/blog/Pages/Treasury-Finalizes-Patient-Protection-Regulations-for-Tax-Exempt-Hospitals.aspx

 

 

I still haven't found which agency is responsible for taking consumer complaints on this issue - I have to imagine it's the IRS, but there is no specific complaint site set up on non profits / medical......

 

would someone who is low income file a complaint with the CFPB regarding a recent bill - 2013, 14 or 2015

 

a bill from a non profit hospital whom has; 1) billed at the full rate; 2) not provided a financial assistance review; 3) sent it out for collections and / or sued

 

to see who the CFPB refers the complaint to? I think you have to file it under debt collection - but make the complaint against the hospital itself.

 

I think these complaints could run side by side of any Hippa / Whychat process

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As is the problem with most legislation designed to curb health care billing practices, this has led to a new "law of unintended consequence". Now people WITH full insurance coverage are being forced to come up with their presumed "deductible" and "co-pay" IN ADVANCE of surgery and/or hospitalization. Although this new law SEEMS to be appropriately pinned in the medical debt forum, it is, in my opinion, a distraction from the actual process of getting medical debts off of reports. The HIPAA letter program INCLUDES this law in one of its letters to an OC:

http://whychat.5u.com/hipltr.html

 

(insert "b") This account is a billing error. (1) It has been paid,( proof of payment attached) . (2) It was not properly transmitted in a timely manner to my insurance company.( Documentation from insurance attached) (3) It was submitted to, or should have been submitted to ( name of State) for indigent care.( Statute # if available) LOOK UP YOUR STATE It is not a valid bill and has been properly disputed, therefore I request complete deletion from all your agent (name of CA)'s records and archives.

 

 

This allows someone to properly use the law WHEN it is applicable. To try to understand its applicability BEFORE disputing an account, is not, in my opinion of any value because if an account is already in collection it is too late to dispute the lack of proper adherence to the law by the OC. In addition MOST medical accounts on peoples credit reports are NOT VALID, in many cases the OC hospital DID apply to the indigent programs and the accounts WERE paid by the proper programs.Trying to dispute THIS issue without FIRST verifying ALL the facts is counterproductive.

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https://www.propublica.org/article/for-nonprofit-hospitals-who-sue-patients-new-rules

 

Most hospitals in the U.S. are charitable organizations. They don't pay taxes because they are supposed to be a key part of the safety net for the nation's poor patients. In theory, patients who aren't covered by Medicaid and can't afford insurance — or who are underinsured and can't afford their out-of-pocket costs — can receive necessary care from a nonprofit hospital without facing financial ruin. Each hospital is required to offer services to lower-income patients at a reduced cost and to have a financial assistance policy that states who qualifies for aid, known as "charity care."
But while hospitals are required to have this policy, there have been very few rules on how they publicize it or how they treat patients who qualify. That's where the new rules, which go into effect in 2016, will make the biggest difference. The rules were required as part of the 2010 Affordable Care Act.
At Heartland Regional Medical Center in St. Joseph, the hospital featured in our story, many patients had been sued despite apparently qualifying for financial assistance. In interviews, patients either didn't know the hospital had charity care or wrongly believed they didn't qualify.
Under the new rules, all nonprofit hospitals will be required to post their financial assistance policies on their websites and offer a written, "plain language summary" of them to patients when they're in the hospital. If patients don't apply for assistance or pay their bills, then the hospitals are required to send at least one more summary of the policy, along with mentioning it on billing statements.
And if hospitals plan to sue patients over unpaid bills, they must attempt to verbally tell the patients about their policies, as well as send notices that they are planning to sue and that the patients may qualify for financial assistance.
Hospitals that don't take these steps before suing patients could face the ultimate penalty of losing their tax-exempt status.

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