IRS provides clarification on hospital financial assistance policy requirements

The IRS has provided clarification on the final rule it issued last December, requiring hospital financial assistance policies to include a list of the providers delivering emergency or other medically necessary care and whether the each provider is covered by the financial assistance policy.

Due to reports of widespread use of aggressive collection tactics by nonprofit hospitals, the IRS published a rule in December 2014 that addresses tax-exempt hospitals' financial assistance policies and collection practices. The rule included the provider list requirement. Last month, The American Hospital Association and the Association of America Medical Colleges asked the IRS to withdraw the requirement due to it being confusing and extraordinarily burdensome, among other reasons.

The IRS issued a notice June 26 to eliminate the confusion surrounding the requirement. The notice specifically addressed what hospitals must include in their financial assistance policies. The IRS stated hospitals may use the names of practice groups or departments, instead of individual physicians, in the provider list.

Even with the clarification, the AHA still is not satisfied with the requirement. "While this relieves some of the unnecessary burden — issues still remain about the administrative requirements and feasibility of assuring compliance," said Melinda Hatton, AHA senior vice president and general counsel, according to an AHA News Now report.

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