Attention nonprofit hospitals. The Obama administration has enacted new, no-nonsense rules targeting tax-exempt healthcare providers. The goal: to improve the affordability of healthcare for low-income patients.
Here’s how it works: To maintain (or earn) tax-exempt status, nonprofit hospitals must now follow four new rules—each designed to make it “easier for low- and moderate-income people to get care without having to worry about a hospital or a bill collector hounding them for money they don’t have,” said Jessica L. Curtis, a lawyer at Community Catalyst, a national consumer group based in Boston.
Clearly this is a step in the right direction. But—good intentions aside—the mandate may seem like a daunting proposition for nonprofit hospitals nationwide (about 60% of U.S. hospitals). Fortunately, with TransUnion, you’re half way there.
Read on for more information on the new 501(r) regulations—and stick around to see how TransUnion can help you comply efficiently and reduce bad debt.
The new rules and where they come from
U.S. Sen. Charles Grassley (R-Iowa) has led the charge to reform 501(r). Recently, Sen. Grassley began calling out purportedly “nonprofit” healthcare providers who were suing low-income patients over unpaid bills.
In one such case, he sent a scathing letter to Heartland Regional Medical Center (now Mosaic Life Care), a nonprofit hospital in St. Joseph, Missouri that was garnishing the wages of patients who were unable to pay their medical fees. Grassley asserted that the hospital “may not be meeting the requirements to be a nonprofit, tax-exempt hospital.”
Sen. Grassley’s efforts, combined with the efforts of countless other concerned lawmakers and citizens, lead us to the letter of the law, so to speak.
Here’s what the four new rules look like:
- 501(r)(3): conduct a community health needs assessment at least once every 3 years and adopt a strategy to meet the community’s health needs
- 501(r)(4): establish a financial assistance policy (FAP) that identifies eligibility criteria for financial assistance, and whether such assistance includes free or discounted care; and a policy for the provision of emergency medical care regardless of individuals eligibility for financial assistance
- 501(r)(5): limit the amounts charged for emergency or other medically necessary care rendered to individuals eligible for financial assistance pursuant to a provider’s FAP
- 501(r)(6): cease engaging in extraordinary collections actions (ECAs) before making reasonable efforts to determine if individuals are FAP eligible
However necessary, the 501(r) regulations significantly increase the workloads of nonprofit hospitals nationwide—which is where we come in.
TransUnion is proud to introduce new ClearIQ Financial Aid solutions that can help you comply with 501(r)(4) and 501(r)(6), freeing you to focus on what matters most—your patients.
Compliance made easier
Compliance is key, but it shouldn’t overshadow your duties as a healthcare provider. At TransUnion, we know what matters most to you, which is why we’re excited to introduce 501(r) compliance, the TransUnion way.
Regarding 501(r)(4), TransUnion’s Financial Aid solution enables you to provide a consistent (unbiased) and efficient method for identifying which patients are eligible for what level of assistance. Essentially, our Financial Aid solution leverages our massive consumer-data repository to analyze a patient’s financial situation as it pertains to their ability to afford their projected healthcare costs.
Here’s how it works: Our Financial Aid solution pulls patient data from your health information system and analyzes it in tandem with our wealth of consumer financial data. Analysis is completed within seconds, and, just like that, you have an accurate picture of a patient’s financial-assistance eligibility.
Regarding 501(r)(6), our Financial Aid solution can help you quickly identify which debtors you can send to collections and which require further financial screening.
For example, let’s say you have 1,000 patients who haven’t paid their medical bills. With our TransUnion Financial Aid solution, all you have to do is submit their names and addresses in a single file, and—by leveraging our wealth of consumer financial data—we categorize them into two groups: those that may qualify for financial assistance and those that don’t. It’s that easy.