« March 2015 Issue

Sunshine Can Go a Long Way for Consumers with Hospital Bills, But More Work Lies Ahead

As the clock wound down on 2014, health care advocates had more to celebrate than the New Year. In the final days of December, the Treasury Department released final regulations on consumer protection requirements for non-profits hospitals. The rules are a long-awaited milestone in Affordable Care Act implementation and in Community Catalyst’s decade-long work to protect people from aggressive hospital billing and collection practices.

This step forward helps meet vital needs in communities – securing pivotal protections for patients and making clear ways in which hospitals should be giving back to their communities.

“The new rules are mostly about sunshine and transparency – and as we have seen in our state work, that alone can be a powerful motivator for hospitals to start using fairer billing practices,” said Jessica Curtis, senior advisor to the Hospital Accountability Project. “However, the rules don't necessarily mean that the remaining uninsured or underinsured won’t have big medical bills.”

The final rules address the needs of patients and the communities non-profit hospitals serve on multiple levels. They bring transparency to financial assistance and billing and debt collection policies, which will now be publicly posted and translated so they are accessible to most members of the community. This seemingly straightforward requirement has not been mandated in many states in the past, which has left patients unaware that financial assistance may be available to them. The rules also provide deeper protections for consumers with medical bills. Patients leaving the hospital with medical bills will be informed that financial assistance is available, and hospitals are required to help patients complete the application process. The rules also increase the amount of time before hospitals can initiate an extraordinary collection effort – delaying actions like reporting the debt to a credit agency or putting a lien on a patient’s home. Disappointingly, they do not ban outright those most problematic debt collection practices.

In another area, the rules prohibit hospitals from charging patients who are determined eligible for financial assistance the “sticker price” for the care they received. Instead, the patient must be billed at the same price as is generally billed to patients with insurance coverage—a lower price than the hospital’s often-inflated charge. Hospitals are also required to justify how they determine the generally billed price. This provision in particular helps ensure that the lowest income consumers do not end up paying the highest prices for hospital care.

“Communities have a window to influence hospital policies this year, since the rules go into effect in 2016,” said Curtis. “Now is a good time to sit down with hospital leadership to jointly evaluate what's been working and what's broken about a local hospital's billing and collections policies, or seek to get involved with the community health needs assessment process.”

The rules also provide further direction on requirements for hospitals to help address their communities’ health needs. This effort is conducted through a Community Health Needs Assessment (CHNA), an important process for helping hospitals better understand the health needs in their communities. While many hospitals have already conducted a first CHNA, the rules cement requirements for hospitals to conduct a CHNA every three years and underscore the importance of consumer and community input in the process.

The IRS makes it plain in the final rules that non-profit hospitals will be required to meet their obligation to the communities they serve. Moving forward, it is important for advocates, community groups and hospitals to work together to ensure these rules protect patients and improve the health of communities.

“Advocates have a big role to play in monitoring how hospitals comply with the rules, and pushing for stronger state laws, since the rules set a federal floor,” said Curtis.

While we bid farewell to 2014 celebrating these final rules, Community Catalyst will spend 2015 and beyond monitoring their implementation and continuing our work to ensure consumers are protected from medical debt and non-profit hospitals are benefiting their communities.

Christine Lindberg, Digital Communications Specialist