Dive Brief:
- In order to maintain their tax-free nonprofit status under the Affordable Care Act’s new Section 501(r) rules, hospitals are required inform patients if they qualify for the hospital's free or reduced-cost care.
- A new study in the New England Journal of Medicine reviewed the Internal Revenue Service forms from more than 1,800 nonprofit hospitals across the U.S. in 2012 and concluded they coud do much better.
- The researchers from the University of Michigan's Institute for Healthcare Policy and Innovation (IHPI) found only 42% of the hospitals reported they were notifying patients about their possible charity eligibility before going after their unpaid medical bills.
Dive Insight:
As the IHPI authors note, hospitals have been “far from perfect” in communicating charity eligibility with patients. However, requiring hospitals to do so may cause them to start pulling back on the generosity of their charity care policies, something that is not controlled by the ACA's Section 501(r).
The researchers are watching to see how performance may change, as in 2012, the government had yet to provide final language on compliance with the rule, but did so in 2014.
“Hospitals are generally complying with the part of the rules that require they establish charity care policies and publicize them, but this may not impact the amount of charity care they provide,” post-doctoral fellow Sayeh Nikpay, PhD, MPH, said in a prepared statement. “So far, it appears many aren’t complying with the part of the rules that could increase their charity care.”