WASHINGTON – The
U.S. Department of the Treasury today released proposed regulations on a
provision in the Affordable Care Act that helps ensure access to financial
assistance for patients of charitable hospitals and protect patients from
abusive collections practices. Under the rules issued today, charitable
hospitals, as a condition of receiving tax-exemption, must establish billing
and collections protections for patients eligible for financial assistance, and
provide patients with the information needed to apply for such assistance.
“In recent months, we have heard
concerns about aggressive hospital debt collection activities, including
allowing debt collectors to pursue collections in emergency rooms. These
practices jeopardize patient care, and our proposed rules will help ensure they
don’t happen in charitable hospitals. These rules also require charitable
hospitals to establish and publicize financial assistance policies, and give
hospitals the flexibility to establish programs that meet the needs of their communities,”
said Acting Assistant Secretary for Tax Policy Emily McMahon
The proposed regulations clarify
hospitals’ responsibilities under the new statutory provision, promoting
patients’ access to health care and financial assistance and transparency in
financial assistance policies, while recognizing hospitals’ need for manageable
rules governing their health care operations and financial affairs.
Key Elements of the
Proposed Regulations:
Establishment and
Disclosure of Financial Assistance Policy. Each tax-exempt hospital
must establish a financial assistance policy that clearly describes the
eligibility criteria for receiving financial assistance and how to apply for
it. Consistent with the statute, the proposed regulations do not provide substantive
requirements for a financial assistance policy regarding eligibility or amount
of assistance, giving hospitals flexibility to determine the most effective way
to serve their particular communities. Additionally, the proposed regulations
describe how a hospital must widely publicize its financial assistance policy
to ensure that community members are aware that aid is available.
Limitation on Collection
Actions. A tax-exempt hospital is prohibited from engaging in certain
collection methods (for example, reporting a debt to a credit agency or
garnishing wages) until it makes reasonable efforts to determine whether an
individual is eligible for the financial assistance it offers. Under these
proposed rules, charitable hospitals must:
- Provide patients with a plain language summary of the
financial assistance policy before discharge and with the first three
bills;
- Give patients at least 120 days following the first
bill to submit an application for financial assistance before commencing
certain collection actions;
- Give the patient an additional 120 days (for 240 days
total) to submit a complete application;
- If a patient is determined eligible for financial
assistance during these 240 days, refund any excess payments made before
applying for aid and seek to reverse any collections actions already
commenced.
Limitation on Charges.
A hospital may not charge individuals eligible for its financial assistance
more for medically necessary care than the amounts generally billed to insured
individuals. To help hospitals comply with this requirement when they do not
know whether a patient is eligible for assistance, the proposed regulations
provide a safe harbor. If a person has not applied for financial assistance,
the hospital may bill the person at its usual charges, provided the hospital is
reaching out to determine whether the person is eligible for financial
assistance. If the person is eligible for aid, the hospital must refund any
excess payments already made.
Non-Discriminatory
Emergency Medical Care Policy. Each hospital must have a written
policy requiring the hospital to provide emergency medical care without
discriminating against patients who may need financial assistance. To simplify
hospitals’ compliance with this requirement, the proposed regulations provide
that a policy that is consistent with the requirements of the Emergency Medical
Treatment and Active Labor Act (EMTALA) is generally sufficient. The proposed
rules require the policy to prohibit debt collection activities in the
emergency department or in other hospital venues where collection activities
could interfere with treatment.
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