Georgia Watch voices consumer concerns to IRS on new regulations for non-profit hospitals

September 21, 2012 – Georgia Watch submitted comments to the Internal Revenue Service today on proposed regulations for non-profit hospitals on their financial assistance policies. These regulations are being written in accordance with provisions of the 2010 Patient Protection and Affordable Care Act (ACA). The IRS issued a notice of proposed rule-making (NPRM) on June 21, 2012, requesting comments. A full copy of the comments can be found here.

“Georgia Watch wants to make sure consumers are given a voice in a process that appears to be dominated by the interests of hospitals,” remarked Elena Parent, executive director of consumer advocacy organization Georgia Watch.

The ACA, as recently upheld by the United States Supreme Court, contains important provisions pertaining to non-profit hospitals and their tax-exempt status. The law requires non-profit hospitals to conduct a Community Health Needs Assessment every three years, provide corresponding community benefits, and have a financial assistance program to assist indigent patients. A non-profit hospital must comply with each of these requirements in order to maintain its tax exempt status. The ACA gives the IRS the authority to draft regulations detailing how hospitals can satisfy this part of the health care law.

When any federal agency drafts regulations pursuant to statutory authority, the agency must issue a NPRM and solicit comments from the public. The current NPRM asked for comments pertaining to non-profit hospitals’ financial assistance plans and the methods they may use to discount the charges billed to an uninsured or underinsured patient.

To give Georgia’s health care consumers a voice in the final drafting of the regulations, Georgia Watch strongly urged the IRS to be conscious of consumers’ needs and to include certain safeguards against potential hospital abuses. “We are concerned the IRS has focused too much on making the process easier for hospitals to the detriment of indigent consumers,” commented Bill Rencher, director of Georgia Watch’s Health Access Program. “Specifically, the proposed regulations do not provide minimum standards for financial assistance plans,” he said, “but only mandate that hospitals have such plans and not bill uninsured patients more than the amounts generally billed to insured patients.”

According to Rencher, hospitals’ options for calculating this reduced charge amount are not necessarily beneficial to consumers. In addition, the regulations as currently written seem to allow hospitals to engage in extraordinary collection actions against a patient before the application period for financial assistance has expired.

Joining Georgia Watch in support of these comments were Georgians for a Healthy Future, Georgia Women for a Change, and Hemophilia of Georgia. Georgia Watch expects to submit comments to forthcoming NPRMs dealing with Community Health Needs Assessments and penalties for non-compliance.