Access departments might be non-compliant
Executive Summary
Patient access departments need revamped processes to be sure patients are informed of available financial assistance, to comply with a proposed rule from the Internal Revenue Service.
• Staff should be able to direct patients to the financial counselors and other resources.
• Staff should document when an application has been provided to a patient, when an application is returned, and when a collection is attempted.
• Hospitals should review their Emergency Medical Treatment and Labor Act (EMTALA) policies and the proposed requirements.
Rule’s focus is on financial counseling
A proposed rule from the Internal Revenue Service (IRS) requires nonprofit hospitals to inform patients about available financial assistance, and it bars "abusive" collection practices prior to doing so. (The proposed rule can be viewed at http://www.irs.gov/pub/irs-drop/reg-130266-11.pdf.)
"There were numerous examples of hospitals trying to collect from patients who were indigent," says Mark Rukavina, principal of Chestnut Hill, MA-based Community Health Advisors, which assists non-profit hospitals in complying with regulatory requirements. "The question arose from some in Congress, Why are we giving a tax break to institutions that are suing poor people, or in some cases sending them to jail, for not paying medical bills. Is that a charitable act?’" says Rukavina.
The new regulations, required by the Affordable Care Act (ACA), affect patient access processes significantly. Rachel Bienemann, senior director of Huron Healthcare, a Chicago-based consulting firm specializing in revenue cycle improvement, says, "Patient access teams are on the frontline to kick off the financial assistance process. Organizations failing to comply can be charged excise taxes and/or be removed from tax-exempt status."
Although a final rule has not yet been issued, the IRS issued a notice in December 2013 stating that hospitals could follow the proposed rule and assume to be in compliance. "It appears that these new provisions are formalizing an important part of the safety net in the healthcare delivery system: non-profit hospitals," says Rukavina.
The new regulations ensure that all hospitals that get the benefit of the federal tax exemption are operating under the same rules, he says. Currently, there is a lot of variation across states.
For some hospitals, this situation isn’t much different from what they had in place prior to the ACA. "For others, it’s dramatically different," says Rukavina. "In some parts of the country, it seemed to patients that hospitals determined who got charity care by making arbitrary decisions."
High level of transparency
Because for-profit hospitals often follow the lead of the nonprofits, says Rukavina, "if you are operating in a market, and there is a high level of transparency around financial assistance policies, there will be spillover. The for-profits will be more forthcoming too."
The overall goal is transparency: for hospitals to be able to explain their financial assistance policy to the community, says Rukavina. That goal includes patient access staff, he emphasizes.
"Anybody working with patients around financial issues should know what the policies are," he says. "These should not be just in writing. The policies should actually be put into practice."
The need to put policies into practice makes the role of patient access employees more challenging. "You are not only verifying insurance coverage. You are also seeing if there might be some relief under the financial assistance policy," says Rukavina. "It can get complicated."
Bienemann says patient access leaders should take these steps to ensure compliance with the new regulations:
• Ensure all patient access staff are well-versed in the financial assistance policy and its requirements for eligibility.
Staff members should be able to inform patients where they can obtain an application, and direct patients to the hospital website, financial counselors, and other resources available to assist with the application.
"This is particularly important in the emergency department, given the additional requirements for financial collection activities [in that setting]," says Bienemann. (See related story, p. 82, on what constitutes "abusive" collection practices under the new regulations.)
• Review patient consent packets, signage, billing statements, and policies posted on the hospital’s website.
"Dual language signs and documentation is required where any language other than English makes up more than 10% of the residents in the community," notes Bienemann.
• Review the financial assistance application process.
"Ensure that there is a clear process flow and handoff of information, where needed, to complete the application and determine eligibility," says Bienemann.
• Document when an application has been provided to a patient, when an application is returned, and when a collection is attempted, along with the proposed estimated amount.
It will be critical, if an audit were to occur, to have supporting documentation notating all steps taken for financial activity with the patient," says Bienemann.
