With the reelection of President Barrack Obama for another term, threats to dismantle the Patient Protection and Affordable Care Act are, at least for now, moot. Now that we know ACA is here to stay, at least until the next federal election, what’s ahead?
Several analysts and news organizations have published their big picture forecast for the healthcare industry as a whole (one of the best was updated today by Kaiser Health News). But what about those with specific concerns; in this case, for patient financial services professionals? What challenges and opportunities will an unfettered implementation of the Affordable Care Act present over the next several months?
Of concern are the proposed rules by the Internal Revenue Service to restrict how not-for-profit hospitals collect from low-income patients. The rules clarify IRS regulations regarding how a hospital manages its financial assistance policy (FAP) and emergency medical care policy, and how it collects debts from patients who may qualify for financial assistance or charity care. The most onerous regulation, at least to hospitals, is a prohibition of up to 240-days on providers from reporting low-income patients to credit bureaus for non-payment of bills.
The current IRS regulations require nonprofit hospitals to make a “reasonable effort” to determine if a patient qualifies for financial assistance. When those regulations were first published, many healthcare organizations asked what constitutes “reasonable effort.” Earlier this year the Treasury Department issued regulations that spell out “reasonable.” A hospital must provide any patient who might qualify for charity care with a 120-day “notification period” that commences with the first bill during which the hospital must communicate its financial assistance policy. This must be followed with another 120-day “application period” during which the patient is allowed to submit a financial assistance application. Only after these two periods have expired can a hospital engage in “extraordinary collection actions.”
The US Treasury Department has scheduled a hearing on the rules for Dec. 5. Today is the last day to register to testify on the proposed rules (anyone interested in speaking must contact Oluwafunmilayo Taylor at (202) 622-7180 before the close of business today).
Several healthcare associations have already registered their protest over the proposed regulations, which could hamstring not-for-profit hospitals by restricting the ability to collect legitimate fees for service in a timely manner. Collections is a time-critical function — the longer a debt is unpaid, the lower the chances of the debtor to collect.
After the hearing, the IRS will either revise the rules or not, and then publish them, at which time they will take effect. While there is no timeline for implementation, it is expected to be before the end of the year, according to IRS staff.
Electronic Transfer Rules
What the federal government taketh away when it comes to collecting from patients, it giveth back in the form of simplifying reimbursement collections from insurers.
Because every insurer has its own data schemes and formats for how providers submit claims, it creates a bureaucratic jungle that consumes tremendous human capital. The Centers for Medicare and Medicaid Services, under authority of the ACA, have published rules that establishes standards for EFTs and health care payment and electronic remittance advice (ERA).
By creating data standards for EFTs, ERAs, and for insurers, healthcare providers and their financial institutions can reduce or eliminate paper-based payment systems and manual business processes. With data standards in place, payment systems between insurers, providers, and financial institutions can better communicate and process transactions electronically.
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