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Charitable Hospital Organizations - GetixHealth
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Charitable Hospital Organizations

About This Project

Whitepaper/Memo – Collection and Patient Financial Requirements for Charitable Hospital Organizations



Charitable hospital organizations have requirements mandated by the Patient Protection and Affordable Care Act of 2010. The regulations affect charitable hospital organizations benefits of being described in section 501(c)(3) of the Internal Revenue Code. Section 501(r)(2)(A)(ii) provides that a hospital organization also includes “any other organization that the Secretary determines has the provision of hospital care as its principal function or purpose constituting the basis for its exemption” as well as an ACO.



Effective date:

These requirements were effective December 29, 2014 with requirements for implementation in taxable years beginning after December 29, 2015.


Rule Outline:

Organizations must take the following actions:

  • Conduct a community health needs assessment (CHNA) every three years with community input, governmental agency input and a publicized report.
  • Implement strategies to address significant health needs uncovered by the CHNA including why the health need is not met and development of corrections.
  • Establish written financial assistance (FAP) and emergency medical care policies and widely publicize in applicable languages.
    • Hospitals must publicize when these policies are not applicable to non-hospital providers operating within the hospital setting.
    • Financial eligibility criteria and discounts must be included
    • Actions for non-payment must be included if the organization does not have a separate billing and collection policy.
    • Include an application period up to 240 days post discharge where a patient’s FAP status has not been established.
  • Limit charge amount for emergency or medically necessary care for an FAP-eligible individual to no more than amounts generally billed (AGB)
    • The AGB calculation must include Medicare and/or Medicaid
    • It may be retrospective (look-back) or prospective
  • Extraordinary collection activity (ECA) may not commence where the patient has not been evaluated for FAP-eligibility status.
    • This is applicable to a collection agency or other third party (such as a billing service).
    • ECAs including reporting to credit bureaus, some debt sales, or withholding care due to non-payment on a prior medical bill



Initial Considerations:

  • Will physicians be mandated to participate in a hospital’s FAP program as part of the professional services agreement?
  • For debt/collection agencies, will this significantly delay the receipt of accounts for follow up?
  • For debt/collection agencies, have collection activities and notification documents been reviewed for ECA conflicts?
  • Will information on a patient’s FAP status be provided to the third party from the facility?
  • Will hospitals and/or physicians notify the third party of its status in participating with the FAP or emergency care programs?
  • Will third parties need to receive the AGB fee schedule from the hospital for processing patient debts?
  • Will this adjust revenue projections for third parties?
  • Will third parties need to return accounts to the hospital to qualify a patient on FPA status?






March 10, 2016