While the nation waits for the U.S. Supreme Court's verdict on the Affordable Healthcare Act (AHA), legislation authored by the White House and passed by Congress last year, there's a little known provision in the Act that will stop something that's becoming an egregious problem: heavy-handed debt collection practices for people who owe medical debts and who may be eligible for financial assistance.
While it's no secret that debt collection is a growing industry – it grows at the same high rate as Americans' personal debt – for many, it has become a problematic industry. Scarcely a week passes without news of a debt collection firm being sued, reprimanded or shut down due to illegal collection tactics.
There was even an article in the New York Times recently about debt collectors chasing down patients waiting to be seen in emergency rooms. Scary? Yes.
About 30 million Americans were contacted by collection agencies for medical bills in 2010, reported Mainstreet.com. According to Federal Reserve Bulletin studies, more than half of all collection accounts on credit reports are medical accounts.
If allowed to stand, the AHA will accomplish the following for Americans with extraordinary medical debt: Establish written financial assistance policies describing who is eligible for free or reduced cost care and publicize them to patients and the community; Refrain from extraordinary collections actions against patients before screening them to determine whether they qualify for financial assistance;
Limit fees charged to patients eligible for financial assistance to rates paid by Medicare or the lowest amounts paid by insured patients; and Conduct a regular community health needs assessment and implement a plan to address selected needs.
According to Mainstreet, while the IRS has not yet clearly defined what constitutes extraordinary collection actions, there is little doubt that dunning patients in the emergency room is an unacceptable practice. It is also likely that the IRS would have misgivings about any hospital that sues a patient deemed eligible for financial assistance.
Edited by
Amanda Ciccatelli
