In an initiative meant to “protect healthcare consumers,” the U.S. Department of the Treasury has finalized proposed 501(r) regulations.
The finalization means that not-for-profit hospitals, that were required to make good-faith efforts in the past, must now take action and begin to phase in these new requirements to avoid pending penalties.
Here’s what the final rules mean for RCM professionals.
501(r) states that not-for-profit hospitals must put several processes in place to be compliant with new regulations. Specifically, tax-exempt hospitals must:
- Set limits on charges and make sure these limits are followed consistently
- Establish and disclose financial assistance policies
- Exhaust all attempts at providing financial assistance prior to leveraging ECA’s
- Perform a community health needs assessment
Penalties for non-compliance
If hospitals fail to meet these provisions, the penalties incurred include fines and losing tax-exempt status. More specifically:
1) Failure to perform a Community Health Needs Assessment (CHNA) an excise tax that will be applied.
2) Failure to comply with the remaining guidelines can cause the hospital to lose its tax-exempt status.
How charitable hospitals can respond
The first, and perhaps most critical, step is to audit your organization’s existing financial assistance policy. Make sure it has been updated and includes:
- How charges are limited for individuals eligible for financial assistance
- The communications and processes that take place prior to extraordinary collections actions
- Clear instructions for patients to apply for financial assistance
Next, hospitals should publicize their financial assistance policy as much as possible. At the very least, it must be included on all bills and on display within the hospital.
Finally, all financial screening processes must be executed as consistently as possible. Although automation is not a requirement, it helps ensure all financial assistance policies are consistently followed by all departments and staff members.
How RevSpring can help
The finalized regulations place a major emphasis on “communication” and “consistency.”
To meet these requirements, RevSpring’s predictive scoring solution provides Financial Assistance Screening tailored to your organization’s upgraded policy.
When combined with our dynamic communication platform, this allows RevSpring clients to:
- Segment patient populations and automate more effective patient engagement workflows
- Insert financial screening at any point in the revenue cycle
- Change communication workflows based on patient behavior and propensity to pay
To learn more about how RevSpring can help you prepare for 501(r) please email us email@example.com.
To read the complete finalization announcement, please visit the U.S. Treasury website.
About the Author: April Wilson is the Director of Analytic Products at RevSpring. She uses her diverse data analytics background to help hospitals measure, optimize, and automate their patient communication effectiveness and RCM business processes.