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ACA 'targets' hospital collection practices: what to watch for

by John W. Mitchell , Senior Correspondent

Stephens Mundy, the New York CEO for the University of Vermont Health Network said that the two hospitals under his supervision are not aggressive in their collection practices. He said while they are reviewing the new regulations, it appears for the most part they already comply with the intent of the 501(r). But he added under the Affordable Care Act it is still prudent for hospitals to review their financial assistance policy.

"We've seen a 75 percent decline in uninsured admission from 2013 to 2014 because more people have insurance under the Affordable Care Act," Mundy noted. "But the bigger issue is that a lot of those patients have high-deductible plans." This means the patient is still responsible for the deductible, which averages $10,386 for a family Bronze Plan ($5,081 individual), according to HealthPocket, a health care consulting company.
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A hospital's mission and values are also key in determining its culture about patient collections. St. James Parish Hospital, a 25-bed acute-care medical-surgical critical access hospital in Lutcher, LA, has a patient-payer mix of 65 percent government payers (Medicare and Medicaid) and 11 percent self-pay (uninsured).

"We always acknowledge our missions when it comes to patient collections," said St. James Parish Hospital CEO MaryEllen Pratt. "We make sure all our patients know about our charity policy. If a patient does not have the ability to pay, they don't pay and our public knows that. But we do determine that ability through means testing."

Phillips, whose experience includes successfully appealing two tax-exempt revocation cases, said the 501(r) rules change seeks fairness.

"Every hospital has to make sure their financial assistance policy makes sense, that they follow their own policy and implement the new IRS rules."

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