April Wilson
Rev Spring

Understanding the detailed requirements for 501(r)(4)(6)

While the debate continues as to when and how compliance will be enforced, there are steps that healthcare revenue cycle management professionals can take to get ready. Here are five steps you can take right now to better meet the requirements of 501(r). 

Step 1: Be Understandable

Your Financial Assistance Policy is the first thing you’ll want to review. Is it written in a language that is easy for everyone to understand? If your policy is written in Legal or Business language, you will need to revise it to a 9th-grade reading level. If you want to get a feel for how difficult your policy is to read, try putting it into one of the many free online tools that are available to help you with this task. For example, this paragraph scores at a 9th grade level, according to one website. 

Step 2: Be Everywhere.

You want your patients to be able to find the Financial Assistance Policy, now that you’ve edited it to be easier to read. This means you need to promote it, everywhere. You should include it with all of your patient communications, particularly with every billing statement. (If you don’t include it with your statement, your statement will need to include clear instructions on where to find it or request a copy.)

It should be easy to find on your website, preferably available right from your main website navigation. If you aren’t sure if the link to your financial assistance policy is easy to find, consider asking a friend or family member to find it while you sit next to them and watch their process. While 501(r) compliance doesn’t require that level of testing, it’s a quick way to spot any issues with where you’ve put the policy on your website. 

Step 3: Be Upfront

Before someone leaves your hospital, make sure that they are provided with a written copy of your Financial Assistance Policy and a Charity Application. Best practices suggest that you provide this even if you do not have enough information on the patient to determine eligibility for financial assistance. If you might take Extraordinary Collections Actions for non-payment, make sure those actions are explicitly detailed in that communication packet. If more than 10% of your residents speak a language other than English, you will need to make all of these materials available in that language as well. 

Step 4: Be Ready

You may not have collected enough information at intake to make the determination whether or not someone is eligible for financial assistance. However, according to 501(r), this does not exempt you from providing assistance. You cannot deny any patient charity because you are missing information – even if you have sent several communications requesting it. Leverage tools like Presumptive Charity Scoring to help make those determinations. Charity scores pull information from various sources about your patient to give you most of the data you need to make a decision for financial assistance. 

Step 5:  Be Proactive

Based on April 2013 guidelines from the IRS, making a good faith effort to comply with 501(r) can prevent your hospital from being penalized. Additionally, if a health system is comprised of multiple hospitals, if one hospital fails to comply, the entire system will not be penalized.


About the Author

April Wilson has a long history of measuring and optimizing customer communication for top brands, and she has built her career around evangelizing the power of data and using consumer insights to change behavior.

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