More than half of the hospitals in the U.S. are tax-exempt charitable organizations. Last week, the Department of the Treasury finalized a provision that holds charitable hospitals to a higher standard and protects many of the patients treated at these facilities. Although many of these provisions have been in effect for the past four years, hospitals were only required to make a “good faith” effort to comply with the law until it was finalized. Now that it has been finalized, hospitals must be in compliance with the regulation and phase-in new requirements as they are proposed. The following are the biggest takeaways from the final guidance:
Limit Charges: Hospitals cannot charge individuals who are eligible for financial assistance more for emergency or necessary care than an individual covered by insurance
Establish and Disclose Financial Assistance Policies: Hospitals must widely publicize its policy and describe the criteria necessary for obtaining financial assistance
Reasonable Billing and Collection: Hospitals can no longer contact collection agencies or garnish wages until they make a reasonable effort to determine whether or not an individual is eligible for financial assistance
Perform Community Health Needs Assessment: Hospitals must publish an assessment once every three years and disclose their findings on their tax form
If hospitals are not in compliance with the new standards, they may have their tax-exempt status revoked and they can face an excise tax as a penalty.