501r and Financial Assistance: What To Know, What To Do

1. 501r and Financial Assistance: What To Know, What To Do AAHAM Carolina Chapter Educational Conference, June 2014 Ric Perez – Director, Experian Health

2. Agenda • 501r Requirements • What To Do – Financial Assistance • Other Best Practices • Tools • Wrap-up

3. 501(r)….more rules, yay

4. 501(r) – What Is It? • Internal Revenue Service Code • 501(c)(3) – Tax Exempt Organization • Affordable Care Act adds 501(r) specific to Providers • Written policies related to Financial Assistance • Reasonable efforts to determine eligibility prior to collections efforts • Limitation on charges • Perform community needs assessment

5. Written Policies - Financial Assistance Should include… • Eligibility criteria for financial assistance and whether such assistance includes free or discounted care • Basis for calculating amounts charged to patients and the permitted methods used to determine amounts generally billed • Method for applying for financial assistance and what documentation will be used to determine qualification • Actions the organization might take in the event of nonpayment • Measures to widely publicize the financial assistance policy within the community

6. Reasonable Efforts – Charity Care • Notifying the individual about the financial assistance plan • Providing information to an individual who submits an incomplete financial assistance application on how to complete it • Making and documenting a determination of whether the individual qualifies under the plan Notes: • Provider should notify an individual that he or she can submit an application for financial assistance within 120 days after care is provided • Provider should not engage in overly aggressive collection efforts

7. Limitation On Charges • Hospitals must limit charges for emergency or medically necessary care to the rates generally billed to insured individuals • Two Methods (Pick only one): • Historical Medicare payments • Prospective/estimate Medicare payments

8. Community Needs Assessment • Hospitals must create a written community health needs assessment every three years • Input from community to understand health needs • Should contain prioritized description of the community's health needs and a description of existing local healthcare facilities and other resources • Describe strategy and implementation plans to meet the needs • Must communicate back to community

9. Notes • Make reasonable efforts • Check your state’s specific requirements • Penalties - $50k excise tax or loss of tax exempt status • IRS being very lenient – Communicate!

10. What To Do – Financial Assistance • Clear and concise policy • Reinvigorate charity procedure • Educate staff to be experts – Scripts! • Identify charity as early as possible • Embrace technology and available data sources

11. Best Performers • Build a relationship with their community • Engage in dialogue with guarantor • Understand and agree with charges • Know and offer all options • Educate, educate, educate • Real-time is key • Fair, balanced, compassionate BALANCE OF REVENUE AND MISSION

12. Questions? Ric Perez ric.perez@passporthealth.com 312.231.2783