Health Care Reform is here and the IRS is in Charge

You may not have realized that the Americans with Care Act, also known as Health Care Reform or “Obamacare”, will be administered and enforced by the Internal Revenue Service.  It’s true!  Over 19,000 IRS agents have to be hired as part of the Act to make sure people buy the mandated health insurance, OR pay the fine for not having insurance, as tracked on your tax returns. A major step toward this end is taking place in Washington as the IRS has issued rules for non-profit hospitals in regards to their billing practices.  You can view the proposed rules at the Federal registry: https://www.federalregister.gov/articles/2012/10/16/2012-25298/additional-requirements-for-charitable-hospitals-hearing ACA International has filed comments with the IRS that matter to those in the billing and A/R cycle for charitable hospitals.  As with many, if not all government regulations and rules, there is confusion and duplicity in the intended and unintended consequences.  ACA has proposed a number of clarifications, which I will summarize here:

  • Clarify regulator and statutory authority.  Which law do we all follow, and when, and why?  There seems to be a number of conflicting rules.  Will there be pre-emption with duplicate laws?
  • Reduce notification and application periods.  Under the proposed rules, a patient will have 120 days after service where no collection activity can take place, and another 120 days after that where the patient can ask for charity at any time and all billing and collection activity must cease.
  • Require patients to cooperate with the charity procedures.  Under these rules, it looks like the patient can stop all billing and collection efforts any time for an unlimited amount of time by asking for a charity application.  The patient is not required to do anything other than request the application, and the hospital can’t move forward until the app is returned?
  • And my “favorite”, clasifying credit reporting as an “extreme collection method” and a prohibited practice during the 240+ days after service.

And this is not everything proposed by the IRS to make our health care system better, cheaper, and more efficient.  Just to comment on the last item above from my perspective: If credit reporting is to be called an “extreme collection method” in the same category as lawsuits, wage garnishments and property liens, as proposed by the IRS for charitable hospitals, how long before this is applied to all health care debt?  And how long before wage garnishments and liens are prohibited as “extreme” for all health care debt?  And then any debt? At what point does a person need to pay for their debts at all if there is no credit reporting or consequences?  You may think I am over reacting, but I would ask you to research the power brokers in Washington currently in the areas of consumer protection.  They want to eliminate cedit reporting and all collection efforts for medical debt, period.  It has already been proposed in congress several times.  Now, it doesn’t have to go to a vote since it is in the rules of a constitutionally approved program! When people don’t have to pay for something, those goods or services do NOT become cheaper!  As I was told many years ago; If you think health care is expensive now, wait until it’s free!

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