Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com MANAGING SELF-PAY COLLECTIONS IN A
RAPIDLY CHANGING HEALTHCARE ENVIROMENT September 27, 2013 Western
Reserve AAHAM Fall Institute Presenter: Mark Rukavina, Principal
Community Health Advisors, LLC
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com The following information is not
intended as legal advice and may not be used as legal advice. Legal
advice must be tailored to the specific facts and circumstances of
each case or inquiry. Every effort has been made to assure that the
information contained in this presentation is up-to-date as of the
date of publication. It is not intended to be a full and exhaustive
explanation of the law in any area, nor should it be used to
replace the advice of your own legal counsel.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com 3 Mark Rukavina, principal of
Community Health Advisors, LLC, has more than 25 years of
experience working on health policy issues. He is a recognized
expert on healthcare affordability, financial assistance, billing
and collection, and community benefit requirements for tax-exempt
healthcare providers. Mark has testified before US Congressional
committees and has published research and policy briefs on these
issues. In March 2013, he was invited to join the Healthcare
Financial Management Associations Medical Debt Advisory Task Force.
Mark previously directed The Access Project, a national research
and advocacy organization and prior to that managed a community
health program sponsored by the AHAs Health Research and
Educational Trust Mark holds an MBA from Babson College and a BS
from the University of Massachusetts in Amherst. Community Health
Advisors, LLC offers customized service to hospitals to ensure
compliance with regulatory mandates and protection of federal tax
exempt status.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Overview of Section 501 r
requirements IRS Form 990 Schedule H Industry Actions on
Self-Pay/Patient Financial Interactions Question &
Discussion
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Bitter Pill: Why Medical Bills Are
Killing Us By Steven Brill March 04, 2013
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Establishes the following
requirements Financial assistance policy Limitation on charges
Billing and collection practices Community health needs
assessment
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com 8 Patient Protection and Affordable
Care Act enacted March 23, 2010 IRS issued Notice 2010- 39 in May
2010 requesting comments on the new 501(r) requirements IRS issued
Notice of Proposed Rulemaking in June 2012 on Financial Assistance,
Limitation on Charges and Billing and Collection Practices April 5,
2013, Notice of Proposed Rulemaking issued on Community Needs
Assessment and Implementation Strategies The proposed CHNA rule
states that the IRS intends to finalize the 2012 proposed (FAP)
regulations in conjunction with the finalizations of these (CHNA)
proposed regulations.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Written financial assistance policy
Criteria for eligibility ( i.e. percentage of federal poverty
guidelines, whether assets considered) Type of assistance provided
(i.e. free care, discounted care, medical indigent or
hardship)
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Must be approved by the Board or
Trustees or another governing body of the tax- exempt hospital
Considered implemented when the policy is consistently carried out
by the facility
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Clearly inform patients of how and
where to apply Explain documentation requirements Assistance may
not be denied based on omission of documentation not specified in
the policy Applicants must be notified in writing of eligibility
determination
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Include a written policy to
provide, without discrimination, care for emergency medical
conditions (within EMTALA rules) for individuals regardless of
financial assistance eligibility Policy regarding care for
emergency medical conditions must prohibit actions such as
demanding payment prior to receiving services or permitting debt
collection activities that could interfere with provisioning of
emergency medical care.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com. Plain Language summary must be
available, free of charge: Hospital website In public locations in
the hospital facilities By mail, if a hard copy is requested
Information must also be available in other languages when they
constitute over 10% of the population Notify residents of policy in
a manner that is reasonably calculated to reach community members
in need of assistance
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Proposed regulations prohibit
charging patients eligible for financial assistance gross charges.
Fees charged to patients eligible for financial assistance must to
limited to amounts generally billed those with insurance.
Regulations cite specific examples for calculating AGB AGB is
applied to all ER care and medically necessary care
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Look Back Method - based on actual
past claims paid by Medicare fee-for-service and deductible and
copayments made by the Medicare beneficiary, or Medicare FFS
together with all private health insurers, as well as costs paid by
Medicare beneficiaries or insured patients through deductibles,
copayments or co-insurance. Prospective Method - estimate that
amount that would be paid by Medicare and the Medicare beneficiary
for the emergency or medically necessary care, if patient were a
Medicare beneficiary.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com The proposed rule includes a safe
harbor provision for certain charges in excess of amounts generally
billed. Hospitals will meet requirements if an eligible patient has
not completed FAP applications and the hospital continues to make
reasonable efforts to determine whether a patient is eligible for
assistance. If a patient is later found to be eligible, payment
made in excess of amounts generally billed should be refunded.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com May stand as a separate policy or
be incorporated into the overall financial assistance policy
Describe permissible collection actions that may be taken in event
of nonpayment and time frame for taking action Applies to both
internal hospital collection efforts and efforts undertaken by
authorized third parties If a patient is determined to be FAP
qualified later in the revenue cycle, the extraordinary collection
actions must be reversed
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Extraordinary Collection Actions
are defined as actions taken by the hospital, or a third party
acting on behalf of the hospital, that require legal or judicial
process. They include, but are not limited to the following:
Reporting adverse information to credit bureaus Sale of debt to
another party Initiating civil litigation Liens on property
Foreclosure on real estate Attaching or seizing bank account
Causing and Individuals arrest Body attachments Garnishment of
wages
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Hospitals are prohibited from
engaging in extraordinary collection actions while making
reasonable efforts to determine whether an individual is eligible
for assistance under their financial assistance policy. 120 day
notification period which begins after issuing the first bill to
the patient.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com 120 application period, a patient
may submit an application. With an incomplete application, the
hospital must refrain from collection actions and provide
information on what is needed to complete application.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Distribute plain language summary
of policy and offer application prior to discharge Include summary
in at least three billing statements and other written
communication during notification period Inform patient of policy
in all oral communication regarding amount of bill due during
notification period
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Provide with at least on written
notice, a minimum of 30 days prior to deadline specified within
notice, informing patient about collection actions that may be
taken if patient does not submit application for assistance or pay
the outstanding balance
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Contains an anti-abuse rule stating
that a hospital will not have made reasonable efforts to determine
eligibility if the hospital bases a decision on inadequate
information. For example the data could be unreliable, incorrect,
or could be obtained from the individual under duress or through
the use of coercive practices. Coercive practices could include
delaying or denying emergency care until individual provides
requested information.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com A waiver signed by patients stating
that they do not wish to apply for FAP does not constitute a
determination of FAP-eligibility and will not satisfy the
reasonable efforts to determine whether a patient is FAP-eligible
prior to engaging in ECAs.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com If a patient is determined to be
eligible later in the revenue cycle, the hospital must Refund
excess payment made in excess of amounts generally billed Reverse
extraordinary collection actions
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Presumptive eligibility screening
provides hospitals with an important safeguard regarding collection
actions and demonstrates effort made to qualify patients for
assistance Presumptive eligibility must be extended for the most
generous level of financial assistance
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Predictive presumptive screening
analytics help identify accounts of financially needy patients
before going to bad debt Crucial safeguard that also helps to avoid
unnecessary collection actions and negative publicity Categorize as
charity care not bad debt
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Form 990 Schedule H is for use by
tax-exempt hospitals to report on community benefit and Section 501
r requirements Schedule H reporting is currently in place
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com F ederal Poverty Guidelines Asset
Test Other Threshold Insurance Status
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Full Free Care Discounted Care
Medically Indigent/ Medical Hardship
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Full Free Care Discounted Care
Medicall Indigent/ Medical Hardship
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Website Attached to billing
invoices Posted in ER, waiting rooms, admissions Provided in
writing on admission Available on request
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Rep orting to Credit Agency
Lawsuits Liens on Residences Body Attachments Other
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Lowest negotiated commercial
insurance rate Average of lowest 3 negotiated commercial insurance
rates Medicare rates Other Also note whether hospital charged
patients eligible for assistance gross charges for any services
provided
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Clarify whether reported in
accordance with HFMA Statement 15 Quantify bad debt expense
Estimate bad debt attributed to patients likely eligible for
financial assistance Provide methodology used to estimate Record
reviews Assessment of incomplete applications Analytical methods
Rationale for including portion of bad debt as community benefit,
if so reported
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com The Patient Financial Interactions
(PFI) Best Practices project was convened in order to promote,
accelerate and coordinate the development voluntary best practices
related to sensitive financial interactions between provider
organizations and patients.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Michael O. Leavitt (Chairman)
Former HHS Secretary Founder and Chariman, Leavitt Partners Tom
Daschle US Senator from South Dakota Donna Shalala Former HHS
Secretary President, University of Miami Bill Frist US Senator from
Tennessee Jamie Gorelick Attorney, WilmerHale
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com The PFI project is currently being
managed by HFMA. The best practices focus on financial interactions
when medical services are scheduled, and during both emergency and
non-emergency care. They provide guidance for when, how, and by
whom communication should take place about patient insurance
coverage, financial counseling, patient financial responsibility
for service, and any existing balance the patient may have.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Emergency Department Interactions -
Help providers handle the most sensitive financial interactions
with patients that take place in the Emergency Department. Time of
Service (Outside the ED) Interactions - Help providers handle the
most sensitive financial interactions with patients that take place
at the time of service, outside the ED. Advance of Service
Interactions - help providers handle the most sensitive financial
interactions with patients that take place in advance of service.
Best Practices for All Patient Financial Interactions - This
overarching set of Best Practices provides the needed guidelines to
help providers. PFI Measurement Criteria - The PFI Measurement
Criteria was developed to guide the evaluation of a healthcare
organizations compliance with the PFI Best Practices.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com The public comment period for the
PFI Best Practices ran from June 17th - July 31st, 2013. Current
status of project
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com The Healthcare Financial Management
Association (HFMA) and the Association of Credit and Collection
Professionals (ACA, International) convened a task force
representing patient advocates, revenue cycle leaders, and
collections agencies. The purpose of the task force was to
establish guidelines outlining the step-by-step actions needed to
resolve patient accounts after patient care has been provided.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com In August of this year, HFMA and
ACA released draft guidelines for fair resolution of the patient
portion of medical bills.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Provider should make a reasonable
effort to ensure accurate and complete patient financial
responsibility Ensure correct balance due Attempt to enroll
self-pay patients in any applicable public programs or other
insurance programs (i.e.COBRA, private insurance)
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Screen for financial
assistance/charity care (may include use of presumptive
eligibility) Ensure that all processes adhere to HFMA's Patient
Friendly Billing Principles. Offer payment plans that consider the
economic circumstances of the community.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Collection process clock starts at
first statement date from providers system. Transfer of accounts
between provider and business affiliates can occur at any time in
the debt resolution process All business affiliates need access to
relevant data to service accounts, including but not limited to the
date of first statement and all subsequent statements. Reporting an
account to a credit bureau should occur no earlier than 120 days
from first statement from provider or early out agency.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Policies related to extraordinary
collections activity (ECAs) (as defined by the IRS i.e. liens,
credit reporting, lawsuits, wage garnishments, or sale of debt) are
board approved, and communicated to and practiced by collection
agencies. Ongoing provider efforts to educate patients about the
account resolution process including informing patients of the ECAs
that are board sanctioned. If account is delinquent, communicate to
the patient that the potential exists for all board-approved ECAs
(including reporting to credit bureaus) prior to initial placement.
Accounts in early out should not be considered delinquent.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com All business affiliates involved in
account resolution activities are required to report patient
complaints. Review by management teams to monitor
billing/registration and other revenue cycle issues that result in
inappropriate accounts sent to collections Call audits and other
quality assurance activities to ensure that policies are followed
and provide process improvement
Slide 50
Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Regular reconciliations to occur
between provider and business affiliate systems for accounts in bad
debt. Providers should ensure through the reconciliation process
that only one business affiliate is working on an account.
Reconciliation should occur between business affiliate and bureau
for account update. Remove a paid debt or account that is
challenged in accordance with ACA International Guidelines.
Timeframe of 45 days Need acknowledgement of data transmissiona
reconciliation that verifies receipt of information and completion
of task Need to define the dataset between bureau and
provider/business affiliate
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com If a provider/business affiliate
report an outstanding debt to a credit bureau, and the debt is
subsequently satisfied (includes accepting a settlement for less
than full value as paid in full), the report should be
deleted.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com All collection efforts (either
internal or external) should adhere to internal written/formal
provider collection policies, which include but are not limited to
screening individuals for and applying charity care/financial
assistance policies to those who are eligible and permissible
account resolution tactics.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com If debt is sold, the buyer must be
certified by DBA International.
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com The public comment period ran from
August 1 st September 6th 2013. Current status of project
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com 55
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Focus on affordability the ACA is
the Affordable Care Act Following guidance outlined in the Proposed
Rule and on IRS Form 990, Schedule H Avoid criticism and respond to
scrutiny with clear policies and defensible practices Apply your
policies consistently
Slide 57
Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Ensure existing policies/ practices
are sufficient in new regulatory environment Secure board approval
of financial, billing and collection policies Review info submitted
on IRS Form 990, Schedule H to ensure compliance Connect financial
need AND community benefit
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Formalize reasonable efforts to
inform patients of financial assistance Implement safeguards to
ensure collection actions not used against patients with financial
need Authorize all collection actions allowed by collection
agencies Agency audits Staff training Easy access to financial
assistance, billing and collection policies
Slide 59
Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Align hospital policies with
federal and state laws and regulations, as well as industry
standards and guidelines. Utilize a comprehensive external review
of financial assistance and billing/collection policies to ensure
501(r) compliance Apply policies consistently to all patients
Pro-actively educate community, policymakers and the media on
policies Evaluate policies annually, they will be used to determine
federal tax status for non-profit hospitals
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Community Health Advisors, LLC 2013. ALL RIGHTS RESERVED
www.CommunityHealthAdvisors.com Questions?