The Internal Revenue Service is taking comments until Sept. 24 on draft rules that require nonprofit hospitals to distribute documents explaining their financial assistance program and talk to patients about available help with bills, in order to maintain tax exemption. They would be prohibited from billing patients who qualify for hospital assistance using “gross charges,” or hospital sticker prices. Most patients are charged a significantly lower rate negotiated by their insurance carrier.
The proposed rules, however, do not set income standards dictating who is eligible for hospital assistance, so it is not clear who would benefit from the limit, said Jessica Curtis, director of the Hospital Accountability Project at Community Catalyst, a national consumer advocacy group.
Despite that, she said, the rules have “struck a pretty fair balance,” giving hospitals flexibility and patients more information. The rules also would require hospitals to wait four months before taking any “extraordinary” collection actions, such as placing a lien on a patient’s home.
Most Massachusetts hospitals have filed documents with the state attorney general’s office stating that they follow best practices for debt collection proposed by that office, including a four-month waiting period. Those practices are voluntary.
Officials with the Massachusetts Hospital Association would not comment on the draft IRS rules, which it had not fully reviewed. Tim Gens, executive vice president, said the state already has “very strong, well-tested” protections for patients, though the group has been talking with Selig’s office about areas where hospitals could do more.
Selig’s office also has been working with Representative Jeffrey Sánchez, a Boston Democrat, on a proposal that would, among other things, require hospitals to do more to notify patients of assistance programs and impose limits on the use of gross charges stricter than those in the federal law.
Neither Sánchez’s proposal nor the Affordable Care Act would fully address a thornier issue for Massachusetts: Low-income people commonly lose insurance for brief periods when they move from one state assistance program to another. Others can get lost in a maze of eligibility requirements.
The state is developing a website meant to streamline the enrollment process. Meanwhile, bills can add up during those gaps in coverage.
Carlos Vazquez, of Springfield, moved his family back to Massachusetts last year after leaving the military. The 27-year-old tried unsuccessfully to get coverage from MassHealth, the state’s Medicaid program, and the unemployment office. He did not learn until late last year that he and his wife could qualify for a subsidized plan through Commonwealth Care.
In December, as the family waited for their plan to take effect on Jan. 1, his wife was rushed by ambulance to a Springfield hospital. Vazquez, who is studying criminal justice at Holyoke Community College and is in the Air Force Reserves, said he has not been able to pay the $1,675 bill.
“The bill is inconvenient, and the fact that we went for so long without health insurance is really inconvenient,” said Vazquez, who now has MassHealth coverage because of a change in the program’s income guidelines. “I wouldn’t want this to happen to other veterans.”