Consumer medical debt is usually unanticipated and frequently unforeseeable, especially where an individual or family unexpectedly finds that they are diagnosed with serious medical conditions or require urgent medical services. Despite having private or public insurance, however, some consumers may be exposed to unaffordable medical bills and charges because of high deductible or increased cost sharing employer sponsored insurance, out-of-network medical services incurred -- particularly in the emergency room context, and/or temporary gaps in insurance coverage.
I was pleased to present a seminar on the Affordable Care Act’s (ACA) charitable hospital obligations and the impact on consumer medical debt at a recent National Consumer Law Center (NCLC) annual consumer rights litigation conference in Tampa, Florida.
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As you may know, the Internal Revenue Service (IRS) proposed regulations have not been finalized but do provide necessary guidance and standards, which nonprofit hospitals should meet to comply with federal tax exempt requirements under Section 9007(a) of the ACA, codified at 26 U.S.C. § 501(r). See Section 9007(a) of the Patient Protection and Affordable Care Act, Public Law 111-148, 124 Stat. 119 (2010), which established 26 U.S.C. §501(r) of the IRS, governing a hospital’s federal tax exemption status under 26 U.S.C. §501(c)(3). See also Prop. Reg. 1.501(r).
The protections accorded to consumers under the ACA’s tax-exempt duties of charitable hospitals do not fully ameliorate consumer medical debt and provide minimal federal protections. Specifically, if a consumer does not apply for hospital FAP, then the consumer loses has no protections under section 501(r) and becomes exposed to the hospital’s protocol regarding unpaid bills, such as receiving bills at the chargemaster rates for services rendered.
On a state level, however, the Commonwealth’s Health Safety Net (HSN) regulations at 101 C.M.R. 613.00, seq. http://www.mass.gov/eohhs/docs/eohhs/eohhs-regs/101-cmr-613.pdf. provide increased safeguards for low and moderate income consumers because, so long as they are deemed low income patients, then they may avail themselves of certain HSN programs, such as the Medical Hardship Program, which assists all residents regardless of income level to obtain HSN reimbursement to hospitals or community health centers for services rendered to eligible residents. Residents also have grievance and appeal rights, as needed.
Lorianne Sainsbury-Wong
MBA Health Law Section, Chair
Health Law Advocates, Inc.