Within the first year of the new 501(r) regulations in place, the IRS had already revoked the not-for-profit status of a hospital. Now more than ever, not-for-profit hospitals must walk a fine line between compliance and cash flow if they aspire to reduce their AR while simultaneously steering clear of regulatory violations. Considering the sensitivity of the situation, it’s imperative these organizations partner with established collection partners who are both precise in their practices and conscientious in their patient communications.
The first concern for 501(r) compliance is that the hospital’s financial policies are effectively communicated to patients. The regulation explicitly states a hospital much establish a written financial assistance policy and create a “plain language summary” of the policy, making it available to all patients regardless of potential language barriers. Likewise, hospitals must inform patients of any assistance programs and facilitate the application process for those who might qualify. The emphasis is on clear and effective communication concerning financial policies, illustrating a good faith effort on the part of not-for-profit hospitals to provide charity care to patients who need it the most.
Another area requiring an abundance of attention is engagement in what is considered “extraordinary” collection action. To ensure compliance, agencies involved in recovering a hospital’s unpaid patient balances must be methodical in providing 30-day notices prior to any extraordinary action being taken on an account. Extraordinary collection actions include activities such as credit reporting, selling an individual’s debt to another party or any form of litigation. In order to ensure the hospital’s tax-exempt designation is not placed in jeopardy, due diligence must be taken by the organization and its collection partners to adhere to appropriate communication and timeline procedures.
At Professional Credit we’ve implemented a variety of practices to assist healthcare organizations with their compliance needs. Our agents are trained via a consumer-centric approach. This includes assisting patients in making the best decisions for their financial health with empathy and understanding. Our operational processes coupled with cutting-edge technology monitors compliance standards in real-time, immediately offering agents on-screen assistance and giving our supervisors the unique opportunity to intervene if necessary. We are dedicated to patient well-being, reflected by our belief that consumers truly want to resolve their financial obligations.
Visit this page to learn more about our patient-friendly approach.
This blog for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular question or issue.