It’s no secret that healthcare costs continue to pose challenges for many Americans. Around 50% of U.S. adults say they have trouble affording healthcare costs, and one in four say they or a member in their household has had trouble paying for services in the past year.
Hospitals have a unique opportunity to make a meaningful difference for their patients by offering accessible financial assistance programs, easing the burden of these increasing healthcare costs.
In fact, the Treasury Inspector General for Tax Administration’s 2024 Annual Audit Plan recently spotlighted the importance of the IRS’ 501(r) mandate, which requires hospitals to provide financial assistance while ensuring awareness of these programs.
Let’s dive into why updating and streamlining financial assistance policy is a win-win for hospitals and discuss two ways to make them more accessible.
The value of updating your hospital’s financial assistance policy
Ensuring compliance
Staying compliant with IRS regulations has always been critical for nonprofit hospitals, but the release of the 2024 Annual Audit Plan from the Treasury Inspector General for Tax Administration (TIGTA) has brought compliance into even sharper focus.
The plan highlights just how important it is for hospitals to meet the requirements of section 501(r), which mandates that hospitals must demonstrate their community benefit to maintain their tax-exempt status. Central to this is offering and publicizing financial assistance programs, ensuring that all eligible patients are aware of and can access the support they need.
Updating HFA policies helps hospitals safeguard their reputation and financial stability by preventing audits, penalties and the loss of tax-exempt status.
Improving patient access to care
While updating your financial assistance policy may feel like checking administrative boxes, the truth is that these updates are providing a lifeline to your community.
The prevalence of medical debt is staggering, with 1 in 10 American adults having significant medical debt and 92% of all adults having avoided seeking medical care due to cost. This number is so high in part due to HFA being overlooked or eligibility requirements being misunderstood, when in reality 58% of all Americans qualify for financial assistance at most hospitals.
Plain Language Summaries
One of the most effective ways to ensure the accessibility and patient-friendliness of an HFA policy is to create a plain language summary. This tool makes complex policies understandable for all patients, regardless of their familiarity with legal and medical jargon.
By breaking down details into straightforward language, hospitals can ensure that their HFA options are accessible to eligible patients.
Plain language summaries should:
- Clearly outline the application process, including how to obtain an application
- Make eligibility requirements and asset tests clear
- List necessary documentation
Having these summaries readily available on a hospital’s website and at points of care demonstrates a proactive approach to compliance, prioritizing patient understanding and access.
Streamlining the Application Process
Paper applications can be confusing and repetitive, not to mention a huge barrier for patients trying to access financial assistance. This oftentimes confusing process can lead to incomplete applications, delays in processing and, ultimately, compliance issues.
Hospitals have an opportunity to simplify this process both for their patients and staff by creating a streamlined version. Here are some things you should consider:
- Reduce the amount of information required from applicants
- Use clear and straightforward language
In addition, it’s critical for hospitals to consider transitioning to a self-serve, online option. Digital forms are more easily updated and accessible from anywhere and having a self-guided process for applicants means reducing the administrative burden on hospital staff.
How Breez Can Help
If optimizing your hospital financial assistance policies and processes seems daunting, an expert partner like Breez Health can help.
Our Financial Assistance Policy Compliance Review ensures hospital compliance with state and federal laws while simplifying and optimizing application.
It’s time to bolster your hospital’s financial assistance policy today – your team and community will thank you.
