The new rules issued by the U.S. Treasury Department intended to curb excessive debt collection practices by hospitals are not likely to be enforced in a consistent and effective manner, Erin C. Fuse Brown, a law professor at Georgia State University in Atlanta, writes in the AMA Journal of Ethics.
The U.S. Treasury Department and the IRS introduced new patient financial rules late last year. They included bars against hospitals seeking payments from patients in their treatment rooms, or selling their debt to collections agencies without making a "reasonable effort" to offer financial assistance first, among other protections. And some have expressed concerns about whether the new rules contain teeth.
"Although the IRS rules aim to protect vulnerable patients from unfair hospital billing and collection practices, the rules are distressingly underinclusive and create unjustifiable gaps in protection," Brown says.
Among the problems that Brown sees in the guidelines, the policies exclude for-profit and government-operated hospitals, which comprise 40 percent of the nation's acute care facilities. And for the remainder, the rules grant a wide latitude.
"The rules give hospitals complete discretion to determine eligibility for financial assistance, which is the trigger for the rules' protections. Under the rules, for example, a hospital could adopt a narrow financial assistance policy with very restrictive income requirements, exclude all patients with any form of insurance regardless of out-of-pocket expenses, or make applying for financial assistance so onerous that few are able to complete the process," Brown writes.
In an informal survey of hospitals, she notes that some only offered financial assistance to patients with incomes at or below the federal poverty level, and that many excluded insured patients altogether. Many others, particularly for-profits, do not publish either their tax status or their financial assistance policies. And given that many patients do not choose what hospital they go to, they have little say in the situation.
Rather than have hospitals' tax status hinge on providing patient financial assistance, Brown argues instead that the requirement be coupled with eligibility to participate in the Medicare program because it would place more financial pressure on the facilities to do so.
To learn more:
- read the JAMA Ethics article