In the December 31, 2014 Federal Register, the Internal Revenue Service published a final rule providing guidance regarding the requirements for charitable hospital organizations added by the Affordable Care Act. The IRS drafted the final rule with input from the Consumer Financial Protection Bureau.
501c (non-profit) hospitals must comply with this rule upon their first fiscal year beginning after December 29, 2015 or jeopardize their tax exempt status.
Key requirements for retaining tax exempt status regard how 501c hospitals’ processes and procedures adhere to the four components of the rule:
- 501(r)3 – Community Health Needs Assessment (CHNA)
- 501(r)4 – Financial Assistance Policy (FAP)
- 501(r)5 – Limits on Charges (AGB)
- 501(r)6 – Reasonable effort to collect prior to Extraordinary Collection Actions (ECA)
The fourth component relates to our REVENUE 120 and REVENUE 365 programs. We help you comply with 501(r)6 in the following ways:
- Since REVENUE 365 only includes patient accounts over a year old, such accounts are well beyond the 240 day Financial Assistance Policy (FAP) application period.
- Prior to acquiring patient accounts less than 241 days old, we will scrub the portfolio of accounts to identify those that are potentially FAP-eligible and remove them from the portfolio.
- We will not take any legal action to recover amounts due on any patient accounts less than 241 days old.
- We do not report account delinquencies to credit agencies.
Contact us today to learn more about how we’ll help you comply with IRS Rule 501(r) and benefit from new sources of revenue from your late-stage, low-balance patient accounts.