Hospitals are pushing back against the Internal Revenue Service regarding how financial assistance policies are enforced--and how they maintain their tax-exempt status--as part of the Patient Protection and Affordable Care Act, reported AHA News Now.
Hospitals would like what the American Hospital Association terms "flexibility" in how they screen patients for financial assistance eligibility.
"Currently, a hospital's routine registration process serves as a first step in identifying whether someone may need financial assistance. Many patients self-identify that they have insurance coverage or are otherwise able to pay for their care," the hospital group said in a letter to the IRS, which was co-authored by three senior AHA executives, including general counsel Melinda Reed Hatton.
The IRS has recently begun a review of nearly 3,400 not-for-profit hospitals to determine if they are following sound financial assistance guidelines that would make their tax exemption ongoing, according to JD Supra.
AHA also is seeking extra guidance for charity care reporting for nonprofit government-operated hospitals, which are nominally nonprofits but are not required to file a tax return.
The hospitals do not want new regulations introduced earlier than 2014, so as to coincide with the expansion of Medicaid and the introduction of the health insurance exchanges as mandated by the ACA. They also are seeking a transition period after the IRS introduces a final rule, a sustainability standard to determine whether an actual violation has occurred and a cure or grace period prior to compliance being enforced, according to the letter.