1. 501(r) 4, 5, 6 Pick Up the Sticks

2. Shawn Gretz VP of Sales for Americollect and AmeriEBO I am not a lawyer, nor do I play one on TV, and I did not stay at a Holiday Inn last night. People seeking legal advice should always consult with an attorney.

3. Nursery Rhymes One, two, buckle my shoe

5. Be on the Lookout for: 1.(Page #) Location of the information that I am providing to you from the final release of the 501(r). 2.Suggestions 3.Questions 4.Checklists – Americollect is preparing some checklists. Stop by after this presentation and provide me with your information and I can send you the checklists.

6. Background – 501(r) 4,5,6 501(r) enacted March 23, 2010 part of ACA Proposed Regulations on requirements described in 501(r)(4) – (r)(6) (June 22, 2012) Comment period for Proposed Regulations ended September 24, 2012 Public hearing conducted December 5, 2012 Comment period closed July 2, 2013 Final released December 29, 2014

7. Effective Date Effective Date: Rely on the proposed 2012 and 2013 regulation but regulations are required to be fully implemented by the hospital organization's first taxable year beginning after December 29, 2015 (Page 13)(Page 178)

8. 501(r)(4) – Financial Assistance Policy (FAP) Eligibility criteria Basis for calculating amounts charged Plain Language Summary Billing & collection policy Measures to widely publicize policy Policy relating to emergency medical care

9. 501(r)(5) – Limitation on Charges – AGB Limits amounts charged for emergency or other medically necessary care provided to individuals eligible for assistance (under Financial Assistance Policy) to not more than amounts generally billed to individuals having insurance covering such care Prohibits use of gross charges

10. 501(r)(6) – Extraordinary Collection Actions May not engage in extraordinary collection actions before organization has made “reasonable efforts” to determine whether individual is eligible for assistance – Provide required notices of financial assistance that ends 120 days after the first discharged billing statement. (Formerly known as “Notification Period”) Debts may be transferred to Americollect or collection agency as long as ECAs are not performed. – If eligibility has not been determined, entity must accept and process the FAP application for an additional 120 days called the “Application Period” (ECA’s may be invoked during this time).

11. 501(r)(4) 1.Financial Assistance Policy (FAP) 2.Plain Language Summary (FA) 3.“Reasonable Efforts” for notification of Financial Assistance – Ties to 501(r) (6) 4.Widely Publicize 5.Emergency Medical Care Policy

12. FAP 1.Can be Used 2.Possible Addition 3.Required Addition

13. FAP – Can be Used Does NOT need to be included in FAP but can be used - 1.Attestation 2.Oral Application

14. FAP – Can be Used Attestation: Will you allow your financial counselors to use attestation? The final regulation allow a hospital facility the ability to grant financial assistance based on evidence other than that described in an FAP or FAP application form or based on an attestation by the applicant, even if the FAP or FAP application form does not describe such evidence or attestations. (Page 80) Approval – YES Denial - NO

15. FAP – Can be Used Oral Application: Will you allow your financial counselors to use oral communications to complete an application? The final regulations amend the definition of “FAP application” to clarify that the term is not intended to refer only to written submissions and that a hospital facility may obtain information from an individual in writing or orally (or a combination of both). (Page 81)

16. FAP – Possible Additions Possible Additions to your FAP 1.Prior Applications 2.Presumptive Determinations 3.Patient to Cooperate 4.FAP Discounts to Add to 990 5.Separate Billing and Collection policy

17. FAP – Possible Additions Prior Applications: How long will your hospital still allow a prior eligibility determination to be used? Prior FAP Can be used if your FAP describes whether and under what circumstances they use prior FAP‐eligibility determinations. (Page 82) The criteria needs to be described in your FAP.

18. FAP – Possible Additions Presumptive Determinations:

19. FAP – Possible Additions Presumptive Determinations: Will your hospital facility use presumptive determinations? The final regulations require a hospital facility to describe in its FAP any information obtained from sources other than individuals seeking assistance that the hospital facility uses(Page 82 & 216) The criteria needs to be described in your FAP. Hospital facilities are not prohibited from using third party information sources and prior FAP- eligibility determinations to try to predict which of its patients are unlikely to be FAP-eligible (Page 165)

20. FAP – Possible Additions Presumptive Determinations: Two Kinds Demographic Scrub – No hit to the credit bureau (what kind of vehicle do you drive, size of your house, fishing or hunting license, and magazines you subscribe to). Credit Check – Soft Hit (only can be seen by the patient) to the Credit Bureau. Can use this but is discouraged from requesting information or documentation that is unreasonable or unnecessary to establish eligibility. (Page 83)

21. FAP – Possible Additions Presumptive – Less than Most Generous: (Page 163) The IRS expanded presumptive eligibility guidelines in the Final Regulations. While hospitals may still provide the most generous assistance to presumptive FAP-eligible individuals, the Final Regulations let hospitals determine if an individual qualifies for “less than the most generous assistance” under its FAP based on information other than that provided by the individual or based on a prior FAP eligibility determination. But hospitals must give these individuals an opportunity to demonstrate that they qualify for more generous assistance. Specifically, the following conditions must be met: 1. The hospital must notify these presumed FAP-eligible individuals about how they can apply for more generous assistance under the FAP. 2. The hospital must give them a reasonable amount of time to apply before initiating ECAs to obtain any outstanding amounts. 3. The hospital must otherwise comply with the “reasonable efforts” requirements if a presumed FAP-eligible individual requests more generous assistance by completing a FAP application. (Page 164)

22. FAP – Possible Additions Careful Presumptive Determinations: (Page 163) Cannot use presumptive determinations for ineligibility. (Page 164) Hospitals might consider using presumptive determinations to assess which patients are unlikely to be FAP-eligible, as ECAs taken against such individuals carry less risk of having to be unwound during the application period. Suggestion: Your collection agency partner should be able score and sort accounts and perform ECAs on only those that are unlikely to turn in an application!

23. FAP – Possible Additions Patient to Cooperate: Do you want a statement in your FAP requiring a patient to cooperate? While the final rule does not mandate cooperation it does note that hospitals have the flexibility to include any additional information in the FAP that the hospital chooses to convey or that may be helpful to the community, including a cooperation statement. (Page 79)

24. FAP – Possible Additions Discounts: Are there any other discounts you would like to claim on your 990? The final regulations only require the FAP to describe discounts “available under the FAP” rather than all discounts offered by the hospital facility. However, only discounts specified in a hospital facility’s FAP (therefore subject to the AGB limitation) may be reported as “financial assistance” on Schedule H of the Form 990. Discounts provided by a hospital facility that are not specified in a hospital facility’s FAP will not be considered community benefit activities for purposes of section 9007(e)(1)(B) of the Affordable Care Act nor for purposes of the totality of circumstances that are considered in determining whether a hospital organization is described in section 501(c)(3). (Page 77)

25. FAP – Possible Additions Discounts: Prompt Pay Suggestion: Hospitals should attempt to shoehorn as many discounts as possible under the FAP, unless such expansion is impractical or unworkable. Example: Patient qualifies for FA and receives a discount at least at the AGB level. If patient decides to pay in full to take advantage of the prompt pay discount, hospital could count the prompt pay discount on 990.

26. FAP – Possible Additions Separate Billing and Collection Policy - Will your organization create a separate billing and collection policy? (Page 221) If yes, does the FAP point to the billing and collection policy and how the public can obtain one? More on this in 501(r)(6)

27. FAP – Required Additions Required Additions to your FAP 1.FAP Determination 2.AGB 3.Physicians on FAP 4.What isn’t Covered by Financial Assistance

28. FAP - Determination Specify Eligibility: Did you specify the eligibility criteria (free or discounted care) for receiving financial assistance under the FAP? (No requirements on how to check eligibility, but do need to describe in your FAP) Documentation: Is your Financial Assistance Application and Policy requesting any financial documentation? If you do not request any documentation you cannot deny based upon lack of documentation. (Page 80)

29. FAP - Determination "Reliable evidence" for FAP includes: – Federal Tax Return – Paystubs – Documents establishing qualification for certain specified state means-tested programs – Suggestion: If these are not available, the patient may call the hospital’s financial assistance office to discuss other evidence they may provide. (Page 81)

30. FAP - Determination Suggestion : Narrow or Broad Time Frame to Access? Hospitals may use the service date, the application date, or some other date to assess eligibility. Whatever period the hospital chooses should inform how the hospital designs its FAP application. For example, will the hospital accept as evidence of household income last month’s paystub? If so, this suggests a narrower period for assessing eligibility. Will the hospital accept last year’s tax return? This suggests a broader period for assessing FAP-eligibility. An Individual Financial Situation can change quickly!

31. FAP – Required Additions AGB: Does your organization’s FAP disclose your AGB? (Page 217) Does your organization’s FAP state that: FAP-eligible individual may not be charged more than the AGB for emergency or other medically necessary care? (Page 217) Specify the Amount(s): Did you specify the amount(s) (example - gross charges) to which any discount percentages will be applied. Suggestion: Create an appendix for the AGB to make it easy to change each year.

32. FAP – Required Additions Physicians on FAP: Did you create a list of all physicians (separate practices) that provide emergency or other medically necessary care in the hospital facility and specify which providers are covered by the hospital facility's FAP and which are not? (Page 23,76, & 216) Preston Quesenberry mentioned, in the 501(r) webinar on 2/19/2015 for HFMA, that it just needs to be a reasonable list the providers - as in listing the names of the practices rather than provider names. Suggestion: Create the provider list in an appendix to the FAP so that it could be revised easily without having to redraft the entire FAP every time a provider is added or deleted.

33. FAP – Physicians Does it Apply Physician Groups : The final 501(r) includes physician organizations in certain instances. How is your physician group is classified for tax purposes(page 24): Separate Taxable Organization: 501(r) will not apply. 501(r) would apply to "substantially-related entity" a. 501(r) applies if your physician group a disregarded entity? - if a hospital organization is the sole member or owner of an entity providing care in one of its hospital facilities and that entity is disregarded as separate from the hospital organization for federal tax purposes, the care provided by the entity would be considered to be care provided by the hospital organization through its hospital facility. 501(r) applies if the hospital owns a capital or profit interest in an entity providing care in a hospital facility that is treated as a partnership for federal tax purposes. (Grandfather rule for 501(r) NOT to apply this was included in the 2013 proposed regulation and adopted in the final - if you meet certain conditions since March 23, 2010)

34. FAP – Required Additions What isn’t Covered by Financial Assistance: Does your FAP clearly state that non-emergency and non- medically necessary care will not be covered under your FA? (Page 122) If not, then 501(r) (5) applies and the use of gross charges cannot be used for elective procedures. Medicaid Definition?

35. Plain Language Summary What is a Plain Language Summary: A document containing a simple explanation of financial assistance. This document will be used in three ways: 1.Mailed with the Final Notice: Required In only one post-discharge bill and only to those subset of patients whom the hospital facility actually intends to engage in extraordinary collection actions. (Page 5) 2.Conspicuous Public Displays 3.Available at Admissions and Emergency Department - FREE

36. Plain Language Summary What is required on the Plain Language Summary? (1)The direct Web site address and physical location(s) where the individual can obtain copies of the FAP and FAP application form; and (2)physical location of hospital facility staff who can provide the individual assistance about the FAP and the FAP application process, or of the nonprofit organizations or government agencies, if any, that the hospital facility has identified as available sources of assistance with FAP application. (Page 94) (3)how to apply for financial assistance (page 96) What other items would you like to add in your plain language summary (example: a statement regarding patient responsibilities)?

37. Plain Language Summary Physical Location – For Assistance IRS does provide flexibility to describe the physical location in the manner that makes the most sense for the hospital facility. IRS did change the final to identify the actual room number and phone number of the appropriate office or department to contact. (Page 96) Do you have listed who can provide assistance with the FAP application? Will the hospital provide assistance with the FAP application? (Page 96 If Yes: List the physical location (Page 95) If No: List at least one nonprofit organization or government agency, if any, that the hospital facility has identify as available sources of assistance with FAP application. (Page 95)

38. Widely Publicize - FAP 1:Paper Copies Available at "Public Locations" (Page 89): Do you have paper copies of the FAP and application available to the public for free at:  emergency department (Page 89)  admissions areas (Page 89)  as part of the intake (outpatient) or discharge (inpatient) process are you offering patients about FAP? (Page 92) Suggestion: Train access to understand that hospital facilities only have to "offer" a plain language summary.

39. Widely Publicize - FAP What do you need to have at these locations? 1.FA Application Itself 2.Plain Language Summary 3.FAP (Page 88) 4.Billing and Collection Policy Are they translated (if applicable) and also available?

40. Translations Translation of Plain Language Summary and Financial Assistance Application to threshold of 5% of the population or 1,000 individuals, whichever is less, likely to be affected or encountered by the hospital facility. (Page 6) (Page 98) May use "any reasonable method to determine such populations" and can use either U.S. Census Bureau or American Community Survey data. If there are fewer than 50 persons in a language group that reaches the 5-percent trigger, the recipient of federal financial assistance does not have to translate vital written materials to satisfy the safe harbor but rather may provide written notice in the primary language of the LEP language group of the right to receive competent oral interpretation of those written materials, free of cost. (Page 98)

41. Widely Publicize - FAP 2. Available on Website (Page 88): Is your FAP, Application, Billing and Collection Policy, and Plain Language Summary available on your website? Suggestion: Each hospital should consider embedding a link on its home page leading viewers to a dedicated FAP webpage. This was one of the examples the Treasury provided. Don’t HIDE it in the Patients Section!

42. Widely Publicize - FAP 3. Conspicuous Written Notice (Statements) Does your billing statement include a conspicuous written notice that notifies and informs the recipient about the availability of FA under the hospital FAP including the telephone number of the hospital department or facility and direct web site address where copies of documents may be obtained? (Page 5 & 91) This is also required to be of sufficient size to be clearly readable.

43. Widely Publicize - FAP 4. Conspicuous Public Display(Page 86): Do you have Conspicuous Public Displays (signs) that attract visitors' attention (in the emergency room and admissions area?) The final regulation requires these to be in "noticeable size" and in minimum "public locations" meaning emergency rooms and admissions areas.(Page 90) Suggestion: The Treasury provided the following example for verbiage: "Uninsured? Having trouble paying your hospital bill? You may be eligible for financial assistance." Also include the website and telephone number for assistance. Finally, it is suggested the signs have brochures that are basically the plain language summary.

44. Widely Publicize - FAP 5. Notify and Inform the Community How are you notifying and informing members of the community about the FAP? (Page 86) (Page 93)

45. Widely Publicize - FAP Suggestion: Will you create scripting to email FA documents: "Great what is your email and I will send you the FA information?" (Page 89). The final regulations clarify that hospital facilities may inform individuals requesting copies are available electronically.

46. Emergency Medical Care Policy Must establish a written policy that requires the hospital facility to provide, without discrimination, care for emergency medical conditions to individuals regardless of whether they are FAP-eligible. The policy must prohibit debt collection activities in the emergency department or in other areas of the hospital facility where such activities could interfere with the provisions, without discrimination, of emergency medical care. (Page 102) Will you create another policy for Emergency Medical Care or include it in a previous written policy? IRS allows it to be included in the FAP or EMTALA policy? (Page 103) In the final regulations the IRS did note that if you are following EMTALA, you should already be following 501(r)(4) – (4)(c)(2)

47. Emergency Medical Care Policy FAILURE TO REQUIRE INDEPENDENT CONTRACTOR EMERGENCY ROOM PHYSICIANS TO ADOPT FAP IS PROBLEMATIC If you outsource the operation of its emergency room to a third party and the care provided by that third party is not covered under the hospital facility's FAP, the hospital facility may not be considered to operate an emergency room for the purposes of the factors considered in Rev. Rul. 69-544 (1969-2 CB 117) which states the requirement of a 501(c)(3) Community Benefit Standard is: 1. Community Board 2. Open Medical Staff 3. Have an Emergency Room 4. Non-Emergency Care to All Patients 5. Use Surplus funds improve quality of patient care, facilities, and advance medical training. (Page 77) Another way is to require your those who operate your Emergency room to implement your FAP.

48. How do you Establish these Policies? How to Establishing FAP, Emergency Medical Care Policy and Collection Policy Has all of these policies been approved by the authorized body or committee approved the authorized body? All policies are only “established” if it is adopted by an authorized body of the hospital facility. (Page 103) Authorized body can be a governing board or the committee or person authorized by the governing board. How will you monitor that the policy is "consistently carried out"? (Page 103) A policy will only be considered implemented if it is "consistently carried out"

49. Joint Policies? Will you have a joint FAP, Emergency Medical Care Policy or Collection Policy? (Page 104) The final regulations clarify that multiple hospital facilities may have identical FAPs, billing and collections policies, and/or emergency medical care policies established for them (or even share one joint policy document), provided that the information in the policy or policies is accurate for all such facilities and any joint policy clearly states that it is applicable to each facility.

50. 501(r)(5) AGB Amount Generally Billed (Page 10): Requires hospital organization not to use gross charges and to limit amounts charged for emergency or other medically necessary care provided to individuals eligible for assistance under the organization's FAP to not more than the amounts generally billed to individuals who have insurance covering such care (AGB)

51. 501(r)(5) AGB All those who will qualify for FA under your policy will need to receive the AGB discount. The IRS does give you the right to determine who will qualify (with or without insurance). So will those with insurance qualify for FA? (Page 105)(Page 109) Also AGB only qualifies on the amount charged or the amount that the individual is "personally responsible for paying" for those with insurance after all deductions and discounts (including discounts available under the FAP) have been applied and less any amounts reimbursed by insurers.

52. AGB – 2 Methods 1.Look-back 2.Prospective IRS does NOT allow for commercial insurers only (Page 107)

53. AGB – Look-back Uses Medicare fee-for-service alone or Medicare fee-for-service together with all private health insurers playing claims to the hospital facility. In the look-back method will you use Medicare alone or Medicare with all private health insurers? If you use all private health insurers, did you include Medicare Advantage plans?

54. AGB – Look-back Look-back method requirements: 1. Calculate AGB percentages at least annually. (Page 111) 2. Will your hospital facility use one AGB percentage for all care? (Page 112) May calculate using all care not just emergency or medically necessary care for the previous 12 months. (Page 114) Cannot use a sample of claims. (Page 119) 3. Will your hospital facility use multiple AGB percentages for separate categories (such as inpatient and outpatient care or care provided by different departments). (Page 112) If calculating multiple AGB percentages your hospital facility must calculate AGB percentages for all emergency and other medically necessary care it provides.

55. AGB – Look-back Look-back method requirements: 4. To calculate AGB use the amount that is "allowed" (excluding those claims that has not been adjudicated Page 114) by health insurers during the prior 12 month period. 5. Final regulation allows a hospital facility to take up to 120 days after the end of the 12 month period used in calculating the AGB percentages to begin applying its new AGB percentages. (Page 118) Did you update your FAP (or separate document/appendix) with the new AGB? (Page 119).

56. AGB – Prospective Will you use the prospective method? (Page 105) This method requires the hospital facility to estimate the amount it would be paid by Medicare, Medicaid, Medicare and Medicaid together, and a Medicare beneficiary for the emergency or other medically necessary care at issue if the FAP-eligible individual were a Medicare fee-for-service beneficiary.

57. AGB Suggestion: Will you claim AGB as FA to increase your financial assistance numbers? (Page 109). In response to the comments, however, the final regulations clarify that, for purposes of the section 501(r)(5) limitation on charges, a FAP-eligible individual is considered to be “charged” only the amount he or she is personally responsible for paying, after all deductions and discounts (including discounts available under the FAP) have been applied less any amounts reimbursed by insurers. The key words are “charged” only the amount he or she is personally responsible for paying, after all deductions and discounts (including discounts available under the FAP)"

58. AGB Suggestion: Will you charge less than AGB? (Page 110) AGB represents the maximum amount a hospital facility can charge, but the final regulations allow a facility to charge less than the AGB. Final regulations do not permit system wide calculations unless your hospital facility can be covered under one Medicare provider number. (Page 117) Hospital facilities that are a part of a system can choose different methods (Page 118).

59. AGB How often will you review and possibly change your AGB? (Page 110) AGB is allowed to be changed at any time but doing so also requires a hospital facility to update the FAP (or separate document/appendix) to describe the method used to determine AGB.

60. AGB Will you use the Medicaid definition used in the hospital facility state, other definition provided by state law, or a definition that refers to the generally accepted standards of medicine in the community or an examining physician's determination to define "medically necessary care"? (Page 111) Suggestion: FAPs may—but often do not—cover elective or non- medically necessary care. Hospitals should review their FAPs to determine whether they should explicitly exclude care that is neither emergency nor medically necessary. Further, the FAP should define what constitutes “medically necessary care.” The Final Regulations allow hospitals to import definitions based on state law, including a Medicaid definition, on generally accepted standards of medicine in the community or on an examining physician’s determination.

61. AGB As healthcare delivery system continues to migrate away from a few for service to other methods of payments used by both public and private payers including value-based, account care and shared savings payments, the treasury department will look for other alternative methods for AGB. (Page 115)

62. 501(r) (6) - ECA The final regulations provide that a hospital organization meets the requirements of section 501(r)(6) with respect to a hospital facility it operates only if the hospital facility does not engage in extraordinary collection actions (ECAs) against an individual to obtain payment for care before making reasonable efforts to determine whether the individual is FAP-eligible for the care.

63. 501(r)(6) - ECA What are ECAs? (Page 128) (1) Reporting adverse information about the individual to consumer credit reporting agencies or credit bureaus. (Page 130) (2) Actions that require a legal or judicial process, including but not limited to- (a) Commencing a civil action against an individual ; (b) Garnish an individual's wages; (c) Place a lien on an individual's property; (d) Foreclose on an individual's real property; (e) Attach or seize an individual's bank account or any other personal property; (f) Cause an individual's arrest; and (i) Cause an individual to be subject to a writ of body attachment;

64. 501(r)(6) – ECA continued What are ECAs? (Page 128) (3) Upfront collections before medically necessary or emergency care. (Page 134) Upfront collections on a prior medical bill unless the hospital facility can demonstrate that it required the payment from the individual based on factors other than and without regard to nonpayment of past bills. (Page 135) (4) Deferral or Denial of Care based upon nonpayment of one or more bills for previously provided care (120 rule does not count in this instance) provided however that the responsible individual be able to apply for FA immediately. (Page 168) The specific notification requirement for denying or deferring care can be satisfied if the hospital provides a copy of its FAP application form to the individual, notifies him or her that financial assistance is available, and provides the deadline after which it will not accept a FAP application for the previously provided care. The individual must have at least 30 days to submit a FAP application for the previously provided care after receiving this notice. If a FAP application is timely submitted, then the hospital must process it on an expedited basis. (5) Listing with a debt buyer (because you have less control over the debt according to the Treasury Department) (Page 132).

65. 501(r)(6) – ECA continued What are NOT ECAs? (Page 128) (1) Listing with a collection agency. (2) Calling a patient by telephone. (3) Writing off the account to Bad Debt. (4) Sending a patient a bill. (5) Upfront Collections (whether partial or full) unless it is related to an attempt to collect a prior medical bill (Page 134)

66. 501(r) (6) – ECA continued What are NOT ECAs? (Page 128) (6) Charging interest on a medical debt. (Page 133) This is considered an extension of credit. (7) Filing a claim in a bankruptcy proceeding (Page 154) (8) The proceeds of settlements, judgments, or compromises arising from a patient’s suit against a third party who caused the patient’s injuries come from the third party, not from the injured patient, and thus hospital liens to obtain such proceeds should not be treated as collection actions against the patient. In addition, the portion of the proceeds of a judgment, settlement, or compromise attributable under state law to care that a hospital facility has provided may appropriately be viewed as compensation for that care. (Page 130) (9) Many other items that cannot be listed because the list would be too large

67. 501(r)(6) – ECA continued ECA For and Not For. In the case of a minor (or states where marital property laws are 50/50), where both parents are responsible for the bill, you cannot engage in ECAs until reasonable effort has been determined. (Page 125) Individual does not include trust, estate, partnership, association, company, corporation, or governmental entity, thus, does not include any private or public insurers. (Page 126)

68. 501(r) (6) – ECA continued For Care Covered Under FAP: Section §1.501(r)- (6)(b) of these final regulations define ECAs as actions related to obtaining payment of bills “for care covered under the hospital facilities FAP. (Page 128) Did you remove elective, non-medically necessary, and non-emergency care from your FAP?

69. 501(r)(6) – ECA continued 501(r)(6) does not bar ECAs against individuals that have been determined to be FAP eligible. (Page 135) Example of this is a responsible individual/patient given a 75% financial assistance write-off based upon income below a federal poverty guideline. Responsible individual is supposed to pay the remaining 25%. If responsible individual does not pay the remaining 25% and it is after 120 days from the first post discharge statement and a notice was sent to responsible individual 30 days prior about the intended ECAs, then ECAS can be pursued.

70. 501(r)(6) – Formerly Known as No longer is the first 120 days called the notification period. It is now considered to be the time you need to make the determination of financial eligibility. If a responsible individual FAP eligibility is undetermined, then you will have to wait 120 days before pursuing ECAs. (Page 139)

71. 501(r)(6) – Formerly Known as Are you notifying only those patients whom you plan on taking extraordinary collection actions? (Page 91) Notification component of the "reasonable effort" is focused primarily on those patents against whom a hospital facility actually intends to engage in extraordinary collection actions. Another example is an individual that is mean- tested in a public program or receiving subsidies and have not completed the necessary forms for financial assistance. (Page 135)

72. 501(r)(6) – How to Notify Have you provided the required 30 day notification in a statement that the intended ECAs will be initiated? (Page 141) 30 days in the minimum number of days the deadline may be from the date the written notice is provided. (Page 143) "Provided" is considered to be the date it was mailed, emailed, or delivered by hand. (Page 152)

73. 501(r)(6) – How to Notify Final Notice- Did you update your final notice with the intended ECAs also mentioning that financial assistance is available (Page 150) and send along a plain language summary of the FAP? (Page 146). The deadline may be no earlier than 30 days after the ECA Initiation Notice sent by mail or electronic mail. Suggestion: Small Balance Accounts: Combine the third statement and the ECA notification & FAP Plain Language Summary into one statement to save cost.

74. 501(r)(6) – How to Notify Oral Communication: Did the hospital facility make a reasonable effort to orally notify those patients against whom the hospital facility intends to engage in ECAs at least 30 days before they intend to initiate? (Page 146 & 149) Oral communication isn't required to all patients, but for simplification it may be best to simply state "For those who are in need of and qualified for, financial assistance is available" Also remember that the hospital does not have to actually speak with the individual; it just must make reasonable efforts.

75. 501(r)(6) – How to Notify Episodes of Care: Will you satisfy the notification requirements simultaneously for multiple episodes of care for the purpose of notifying the individual about its FAP and potential ECAs? (Page 144) This can only be the case if the most recent episode of care is past the 120 day period. (Page 145). The application period does start with each episode of care. (Page 145)

76. 501(r)(6) – How to Notify Email Statements: Will you initiate a program to convert many of your mailed statements to electronic (for example by email) to any individual who indicates he or she prefers to receive the written notice or communication electronically? (Page 151)

77. 501(r)(6) – How to Notify Documentation: Unlike Medicare Bad Debt, documentation is not required on each responsible party. But you do have to update your 990 to include whether and how reasonable efforts were made to determine FAP eligibility before engaging in ECAs? (Page 151)

78. 501(r)(6) – Application Period Application Period: Must accept & process FAP applications during longer period that end on 240th day after hospital provides an individual with first billing statement post discharge.

79. 501(r)(6) – Application Period Received Application: What happens next? How will you notify your collection agencies that you received a financial assistance application during the application period and ECAs need to be suspended? (Page 153)(Page 155) How will you make eligibility determination in a timely manner? (Page 155) Document the determination? How will you notify the responsible individual in writing of your determination? (Page 155)

80. 501(r)(6) – Application Period Approved: How will your organization notify the responsible individual that they were eligible for free care under the FAP? (Page 158) How will your organization issue refunds for payments made for a responsible individual that is eligible for financial assistance? (Page 158) $5 is the threshold that is required to be refunded. How will your organization notify your collection agency if you approved an application and ECAs have to be reversed? (Page 153)

81. 501(r)(6) – Application Period Approved for less than full amount: How will your organization notify the responsible individual that they were eligible for discounted care under the FAP? (Page 158) How will your organization issue refunds for payments made for a responsible individual that is eligible financial assistance? (Page 158) $5 is the threshold that is required to be refunded. How will your organization notify your collection agency if you approved an application and ECAs have to be reversed and a notice was sent to the responsible individual about resuming ECAs in 30 days and an accompanying plain language summary of the FAP? (Page 153)

82. 501(r)(6) – Application Period Not Approved: How will your organization make sure a notice that is sent to the responsible individual is not approved and to resume ECAs in 30 days and an accompanying plain language summary of the FAP has been mailed?(Page 153) How will your organization notify your collection agency to resume ECAs if it has been 30 days since you provided the notice of intended ECAs and an accompanying plain language summary of the FAP if the application was not approved? (Page 153) This is only for the care at issue.

83. 501(r)(6) – Application Period Incomplete: How will your organization make sure a notice is sent to the responsible individual of the missing requirements to make financial eligibility determination and to resume ECAs in 30 days and that an accompanying plain language summary of the FAP has been mailed?(Page 153) How will your organization notify your collection agency to resume ECAs if it has been 30 days since you provided the notice of intended ECAs and an accompanying plain language summary of the FAP) if the application is not completed? (Page 153) This is only for the care at issue.

84. 501(r)(6) – Application Period Timely Manner: Will your organization require a Medicaid application be filed before approval or denial of financial assistance? (Page 156) What is considered a "timely manner" to approve a financial assistance application? (Page 156) Suggestion: In my experience, “timely manner” is not a friendly language for hospitals because it can be decided by a single individual. Some could be friendly and use the upper limit of 45 days that was listed in the examples and others may say reasonable is 30 days. I would suggest trying to make the determination for financial assistance within 30 days unless the individual is applying for Medicaid coverage.

85. 501(r)(6) – Liable for Collection Agency Collection Agency Hospital facilities must be held accountable for the ECAs of the debt collection agency or debt buyers. (Page 127) Do you have a contract in place with your collection agency that requires them to follow 501(r) regarding ECAs and also FAP applications? Included in the contract should be language that if the collection agency mistakenly violates 501(r)(6), they will notify/disclose to the hospital facility and correct the failure immediately. (Page 127)

86. 501(r)(6) – Liable for Collection Agency Collection Agency Contract 1. Disclose all failures: A hospital’s 501(r)(6) failure, based on a third party’s actions, may be excused if the failure is minor (e.g., not willful or egregious) and the hospital corrects and discloses the failure. (Page 27) 2. Will your organization’s collection agency take any of the necessary steps to make reasonable efforts determination? (Page 169) Treasury has clarified that the hospital facility will take those steps.

87. 501(r)(6) – Liable for Collection Agency Collection Agency Contract 3. Wait on ECAs 4. Who will refund Patients if Approved for FA? 5. Suspend ECAs in Application Period 6. Send FA to Patient

88. Collection Policy Two options on how to create a “Billing and Collection Policy” 1.Update your FAP 2.Or Create a separate “Billing and Collection Policy”

89. Collection Policy Requirements 1.Describe the Actions the Hospital will take 2.Describe the Actions a collection partner may take 1.Including extraordinary collection actions (ECA) 2.But not limited to the ECAs 3.Must also describe the process and time frames the hospital facility (or other authorized party) will use in taking these actions 4.Include any reasonable efforts to determine whether an individual is FAP-eligible as described in section 501(r)(6). 5.In addition, the FAP or billing and collections policy must describe the office, department, committee, or other body with the final authority or responsibility for determining that the hospital facility has made reasonable efforts to determine whether an individual is FAP-eligible and may therefore engage in extraordinary collection actions against the individual. 6.How can individuals obtain a free copy?

90. Q&A Shawn Gretz shawn@americollect.com 920-420-3420 shawn@americollect.com https://www.federalregister.gov/articles/2012/06/26/2012- 15537/additional-requirements-for-charitable-hospitals