Lost in the shuffle amid last week’s U.S. Supreme Court decision is proposed legislation and a proposed regulation that each seek to address the issue of aggressive hospital debt collection.
Sen. Al Franken (D-MN) introduced the End Debt Collector Abuse Act of 2012 last Wednesday. The act would amend the federal Fair Debt Collection Practices Act to include medical debt and would set limits on the access that debt collectors can have to hospital patients.
Meanwhile, the U.S. Department of the Treasury released proposed regulations on policies for patient financial assistance and emergency medical care that hospitals must develop as a condition of receiving or maintaining tax-exempt status. The regulations are required by the Patient Protection and Affordable Care Act.
Franken’s proposed bill reflects the findings of hearings he held on the hospital debt collection practices of Chicago-based Accretive Health, Inc. Those hearings followed a report from Minnesota Attorney General Lori Swanson alleging that Accretive's debt collection and patient privacy practices violated federal health, debt collection, and privacy laws.
The proposed Treasury regulations would require charitable hospitals to establish and publicize financial assistance programs (FAP), establish billing and collections protections for patients eligible for the assistance programs, and develop a written policy for emergency medical care. The hospitals would also be prohibited from taking "extraordinary collection actions" against FAP-eligible individuals.
"In recent months, we have heard concerns about aggressive hospital debt collection activities, including allowing debt collectors to pursue collections in emergency rooms. These practices jeopardize patient care, and our proposed rules will help ensure they don’t happen in charitable hospitals," Emily McMahon, acting assistant secretary for tax policy in the Treasury Department, said in a press statement.
Among the prohibited practices are aggressive third-party actions, foreclosures and liens, garnished wages, and the sale of an individual's debt to another party. The regulation notes that "after a hospital facility has sold a debt, it may have a more limited ability to control the purchaser's actions to collect the debt." The proposed regulations still allow debt to be contracted to a collections agent because a hospital facility "can presumably maintain greater control over its third-party agent."
The general requirements for an FAP include eligibility standards, description of the assistance in terms of free or discounted care, the basis for calculating charges, and a description of what steps the hospital will take in case of nonpayment.
The emergency medical care policy requires hospitals to provide care for emergency medical conditions as defined by the Emergency Medical Treatment and Active Labor Act (EMTALA). The care must be provided regardless of a patient’s FAP eligibility.
In addition, the proposed regulation would limit the hospital charges to FAP eligibles to the "amount generally billed (AGB)" for a patient with health insurance coverage. The AGB could be calculated by a "look-back" method based on actual past claims paid to the hospital facility by either Medicare fee-for-service or a combination of Medicare FFS and private health insurance claims. AGB can also be calculated based on estimates of what Medicare would pay if the FAP-eligible patient was a Medicare FFS beneficiary.
Comments and requests for a public hearing on the Treasury regulations must be received by September 24. The American Hospital Association is expected tp oppose the proposal. In an e-mail exchange with HealthLeaders Media, an AHA spokesperson described the proposed rules as "overly prescriptive" and stated that they "could discourage hospitals’ innovations and best practices."
Margaret Dick Tocknell is a reporter/editor with HealthLeaders Media.
