Lead Consumer Advocacy Organization Responds to IRS Draft Rule on Hospital Financial Assistance
(BOSTON) – “As an organization that for the past decade has worked to protect people from aggressive hospital billing and collection practices, we are happy to see the proposed regulations on released last Friday by the Treasury Department and the IRS. This is a very positive first step toward safeguarding patients from unfair billing and collection practices commonly used by the hospital sector that put patients’ physical and financial health at risk.
“Non-profit hospitals provide essential life-saving care. In exchange for billions of dollars annually in tax exemptions, they are also obligated to provide financial assistance and other services-typically referred to as community benefit-that help to keep people in their community healthy. Unfortunately, not all hospitals have been doing their fair share. In response to widespread documentation of aggressive patient billing and debt collection tactics happening nationwide in non-profit hospitals, the Affordable Care Act put in place critical new disclosure requirements to ensure patients get accurate, timely information about available financial help. The Act also establishes a fairer, consistent timeline and process in which hospitals and patients share responsibility for completing timely applications for financial help.
“While we believe consumer protections could be further strengthened, the draft rule strikes a reasonable balance between giving hospitals the flexibility they need to serve their unique communities and protecting patients’ access to care. We strongly support the proposed ban on putting bill collectors between patients and doctors in the emergency room and the requirement that hospitals work with patients to see whether they qualify for financial assistance prior to engaging in extraordinary collection practices that have long-term adverse impacts, such as home foreclosures, wage garnishment, and reporting bad debts to consumer credit bureaus.
“It is also clear the IRS has rightly attempted to address the aggressive tactics of third party billing and collection firms by holding hospitals responsible when those contracted firms fail to notify patients of financial assistance policies at appropriate times and places. Non-profit hospitals should not be allowed to outsource their obligations to protect community health and access to care -often a core pillar of their missions, in addition to a legal requirement-and the rules pose a reasonable solution to this troubling practice.
“The draft guidance is a long-awaited and welcomed development, and we look forward to offering comments on ways it could be improved to better serve the needs of patients and their families that will also work well for hospitals.
“At the same time, we recognize the limitation of these draft rules, which do not apply to for-profit hospitals or provide patients with a private remedy if the hospital fails to comply. We are pleased to hear that Senator Al Franken (D-MN) is investigating what additional protections are needed to ensure hospital debt collection practices treat patients fairly and humanely. We hope that hospitals, communities, and other stakeholders will come together to prioritize patient health and wellness over profit, enabling patients to put the fear of avoidable medical debt behind them.”
About Community Catalyst
Community Catalyst is a national non-profit consumer advocacy organization dedicated to quality affordable health care for all. Community Catalyst works in partnership with national, state and local consumer organizations, policymakers, and foundations, providing leadership and support to change the health care system so it serves everyone – especially vulnerable members of society. For more information, visit www.communitycatalyst.org. Read or comment on our blog at http://blog.communitycatalyst.org/. Follow us on Twitter @healthpolicyhub.