I. POLICY. their individual assets.

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1 PRINCIPLES AND PRACTICES BOARD SAMPLE 501(c)(3) HOSPITAL CHARITY CARE AND FINANCIAL ASSISTANCE POLICY AND PROCEDURES The Principles and Practices Bard (P&P Bard) undertk develping an illustrative plicy n charity care and financial assistance t assist hspitals in fulfilling their cmmunity benefit. Hspitals are cmmitted t prviding charity care t persns wh have healthcare needs and are uninsured, underinsured, ineligible fr a gvernment prgram, r therwise unable t pay, fr medically necessary care based n their individual financial situatin. Althugh charity care is imprtant, it is nly ne cmpnent f the cmmunity benefit that hspitals prvide. Other cmpnents f cmmunity benefit include, but are nt limited t: Unpaid public health, wellness, and educatinal prgrams Unpaid cst f Medicaid and ther public prgrams Prvisin f essential healthcare services such as emergency rms and lw-incme patient clinics Subsidized health services such as burn units, nenatal care, trauma centers, ambulance, cmmunity mental health centers, and transprtatin services Unpaid senir citizen educatin, utreach, and meals n wheels prgrams Cash and in-kind dnatins n behalf f the pr and needy t cmmunity agencies Unreimbursed cst f training health prfessinals and clinical and cmmunity health research Cnsistent with their missin t deliver cmpassinate, high quality, affrdable health care services and t advcate fr thse wh are pr and disenfranchised, hspitals strive t ensure that the financial capacity f peple wh need health care services des nt prevent them frm seeking r receiving care. Charity is nt cnsidered t be a substitute fr persnal respnsibility. Patients are expected t cperate with prcedures fr btaining charity r ther frms f financial assistance, and t cntribute t the cst f their care based n their individual ability t pay. Individuals with the financial capacity t purchase health insurance shall be encuraged t d s 1, as a means f assuring access t healthcare services, fr their verall persnal health, and fr the prtectin f 1 Nte: This sentence wuld change nce the PPACA individual mandate becmes effective in

2 their individual assets. In rder t assist hspitals t manage their resurces respnsibly, t prvide the apprpriate level f assistance t the greatest number f persns in need, and t cmply with prvisins enacted in the Patient Prtectin and Affrdable Care Act (PPACA), the P&P Bard has established the fllwing sample plicy t be used fr the prvisin f patient charity. As yu review this plicy, remember that it is meant t be a sample, nt a standard. As yur rganizatin cnsiders adpting this plicy, yu shuld keep in mind the cmmunities yu serve, applicable federal, state, and lcal laws and regulatins, and the individual missin f yur rganizatin. I. POLICY [Sample Hspital 2 ] is cmmitted t prviding charity care t persns wh have healthcare needs and are uninsured, underinsured, ineligible fr a gvernment prgram, r therwise unable t pay, fr medically necessary care based n their individual financial situatin. Cnsistent with its missin t deliver cmpassinate, high quality, affrdable healthcare services and t advcate fr thse wh are pr and disenfranchised, [Sample Hspital] strives t ensure that the financial capacity f peple wh need health care services des nt prevent them frm seeking r receiving care. [Sample Hspital] will prvide, withut discriminatin, care fr emergency medical cnditins t individuals regardless f their eligibility fr financial assistance r fr gvernment assistance. Accrdingly, this written plicy: Includes eligibility criteria fr financial assistance free and discunted (partial charity) care Describes the basis fr calculating amunts charged t patients eligible fr financial assistance under this plicy Describes the methd by which patients may apply fr financial assistance Describes hw the hspital will widely publicize the plicy within the cmmunity served by the hspital Limits the amunts that the hspital will charge fr emergency r ther medically necessary care prvided t individuals eligible fr financial assistance t amunt generally billed (received by) the hspital fr cmmercially insured r Medicare patients Charity is nt cnsidered t be a substitute fr persnal respnsibility. Patients are expected t cperate with [Sample Hspital] s prcedures fr btaining charity r ther frms f payment r financial assistance, and t cntribute t the cst f their care based n their individual ability t pay. Individuals with the financial capacity t purchase health insurance shall be encuraged t d s, as a means f assuring access t health care services, fr their verall persnal health, and fr the prtectin f their individual assets. 2 If Sample Hspital is part f a multi-hspital system, it shuld be clear that the example plicy applies t each hspital facility separately by name. 2

3 In rder t manage its resurces respnsibility and t allw [Sample Hspital] t prvide the apprpriate level f assistance t the greatest number f persns in need, the Bard f Directrs establishes the fllwing guidelines fr the prvisin f patient charity. II. DEFINITIONS Fr the purpse f this plicy, the terms belw are defined as fllws: Charity Care: Healthcare services that have been r will be prvided but are never expected t result in cash inflws. Charity care results frm a prvider's plicy t prvide healthcare services free r at a discunt t individuals wh meet the established criteria. Family: Using the Census Bureau definitin, a grup f tw r mre peple wh reside tgether and wh are related by birth, marriage, r adptin. Accrding t Internal Revenue Service rules, if the patient claims smene as a dependent n their incme tax return, they may be cnsidered a dependent fr purpses f the prvisin f financial assistance. Family Incme: Family Incme is determined using the Census Bureau definitin, which uses the fllwing incme when cmputing federal pverty guidelines: Includes earnings, unemplyment cmpensatin, wrkers cmpensatin, Scial Security, Supplemental Security Incme, public assistance, veterans payments, survivr benefits, pensin r retirement incme, interest, dividends, rents, ryalties, incme frm estates, trusts, educatinal assistance, alimny, child supprt, assistance frm utside the husehld, and ther miscellaneus surces; Nncash benefits (such as fd stamps and husing subsidies) d nt cunt; Determined n a befre-tax basis; Excludes capital gains r lsses; and If a persn lives with a family, includes the incme f all family members (Nn-relatives, such as husemates, d nt cunt). Uninsured: The patient has n level f insurance r third party assistance t assist with meeting his/her payment bligatins. Underinsured: The patient has sme level f insurance r third-party assistance but still has ut-f-pcket expenses that exceed his/her financial abilities. 3

4 Grss charges: The ttal charges at the rganizatin s full established rates fr the prvisin f patient care services befre deductins frm revenue are applied. Emergency medical cnditins: Defined within the meaning f sectin 1867 f the Scial Security Act (42 U.S.C. 1395dd). Medically necessary: As defined by Medicare (services r items reasnable and necessary fr the diagnsis r treatment f illness r injury). III. PROCEDURES A. Services Eligible Under This Plicy. Fr purpses f this plicy, charity r financial assistance refers t healthcare services prvided by [Sample Hspital] withut charge r at a discunt t qualifying patients. The fllwing healthcare services are eligible fr charity: 1. Emergency medical services prvided in an emergency rm setting; 2. Services fr a cnditin which, if nt prmptly treated, wuld lead t an adverse change in the health status f an individual; 3. Nn-elective services prvided in respnse t life-threatening circumstances in a nn-emergency rm setting; and 4. Medically necessary services, evaluated n a case-by-case basis at [Sample Hspital] s discretin. B. Eligibility fr Charity. Eligibility fr charity will be cnsidered fr thse individuals wh are uninsured, underinsured, ineligible fr any gvernment health care benefit prgram, and wh are unable t pay fr their care, based upn a determinatin f financial need in accrdance with this Plicy. The granting f charity shall be based n an individualized determinatin f financial need, and shall nt take int accunt age, gender, race, scial r immigrant status, sexual rientatin r religius affiliatin. [Sample Hspital shall determine whether r nt patients are eligible t receive charity fr deductibles, c-insurance, r c-payment respnsibilities.] C. Methd by Which Patients May Apply fr Charity Care. 1. Financial need will be determined in accrdance with prcedures that invlve an individual assessment f financial need; and may a. Include an applicatin prcess, in which the patient r the patient s guarantr are required t cperate and supply persnal, financial and ther infrmatin and dcumentatin relevant t making a determinatin f 4

5 financial need; b. Include the use f external publically available data surces that prvide infrmatin n a patient s r a patient s guarantr s ability t pay (such as credit scring); c. Include reasnable effrts by [Sample Hspital] t explre apprpriate alternative surces f payment and cverage frm public and private payment prgrams, and t assist patients t apply fr such prgrams; d. Take int accunt the patient s available assets, and all ther financial resurces available t the patient; and e. Include a review f the patient s utstanding accunts receivable fr prir services rendered and the patient s payment histry. 2. It is preferred but nt required that a request fr charity and a determinatin f financial need ccur prir t rendering f nnemergent medically necessary services. Hwever, the determinatin may be dne at any pint in the cllectin cycle. The need fr financial assistance shall be re-evaluated at each subsequent time f services if the last financial evaluatin was cmpleted mre than a year prir, r at any time additinal infrmatin relevant t the eligibility f the patient fr charity becmes knwn. 3. [Sample Hspital] s values f human dignity and stewardship shall be reflected in the applicatin prcess, financial need determinatin and granting f charity. Requests fr charity shall be prcessed prmptly and [Sample Hspital] shall ntify the patient r applicant in writing within 30 days f receipt f a cmpleted applicatin. D. Presumptive Financial Assistance Eligibility. There are instances when a patient may appear eligible fr charity care discunts, but there is n financial assistance frm n file due t a lack f supprting dcumentatin. Often there is adequate infrmatin prvided by the patient r thrugh ther surces, which culd prvide sufficient evidence t prvide the patient with charity care assistance. In the event there is n evidence t supprt a patient s eligibility fr charity care, [Sample Hspital] culd use utside agencies in determining estimate incme amunts fr the basis f determining charity care eligibility and ptential discunt amunts. Once determined, due t the inherent nature f the presumptive circumstances, the nly discunt that can be granted is a 100% write ff f the accunt balance. Presumptive eligibility may be determined n the basis f individual life circumstances that may include: 5

6 1. State-funded prescriptin prgrams; 2. Hmeless r received care frm a hmeless clinic; 3. Participatin in Wmen, Infants and Children prgrams (WIC); 4. Fd stamp eligibility; 5. Subsidized schl lunch prgram eligibility; 6. Eligibility fr ther state r lcal assistance prgrams that are unfunded (e.g., Medicaid spend-dwn); 7. Lw incme/subsidized husing is prvided as a valid address; and 8. Patient is deceased with n knwn estate. E. Eligibility Criteria and Amunts Charged t Patients. Services eligible under this Plicy will be made available t the patient n a sliding fee scale, in accrdance with financial need, as determined in reference t Federal Pverty Levels (FPL) in effect at the time f the determinatin. Once a patient has been determined by [Sample Hspital] t be eligible fr financial assistance, that patient shall nt receive any future bills based n undiscunted grss charges. The basis fr the amunts [Sample Hspital] will charge patients qualifying fr financial assistance is as fllws: 1. Patients whse family incme is at r belw XXX% f the FPL are eligible t receive free care; 2. Patients whse family incme is abve XXX% but nt mre than YYY% f the FPL are eligible t receive services at amunts n greater than the amunts generally billed t (received by the hspital fr) cmmercially insured [r Medicare] patients; [Sample Hspital may want t cnsider a sliding fee schedule as an alternative within this sectin]; and 3. Patients whse family incme exceeds YYY% f the FPL may be eligible t receive discunted rates n a case-by-case basis based n their specific circumstances, such as catastrphic illness r medical indigence, at the discretin f [Sample Hspital]; hwever the discunted rates shall nt be greater than the amunts generally billed t (received by the hspital fr) cmmercially insured [r Medicare] patients. F. Cmmunicatin f the Charity Prgram t Patients and Within the Cmmunity. Ntificatin abut charity available frm [Sample Hspital], 6

7 which shall include a cntact number, shall be disseminated by [Sample Hspital] by varius means, which may include, but are nt limited t, the publicatin f ntices in patient bills and by psting ntices in emergency rms, in the Cnditins f Admissin frm, at urgent care centers, admitting and registratin departments, hspital business ffices, and patient financial services ffices that are lcated n facility campuses, and at ther public places as [Sample Hspital] may elect. [Sample Hspital] als shall publish and widely publicize a summary f this charity care plicy n facility websites, in brchures available in patient access sites and at ther places within the cmmunity served by the hspital as [Sample Hspital] may elect.. Such ntices and summary infrmatin shall be prvided in the primary languages spken by the ppulatin serviced by [Sample Hspital]. Referral f patients fr charity may be made by any member f the [Sample Hspital] staff r medical staff, including physicians, nurses, financial cunselrs, scial wrkers, case managers, chaplains, and religius spnsrs. A request fr charity may be made by the patient r a family member, clse friend, r assciate f the patient, subject t applicable privacy laws. G. Relatinship t Cllectin Plicies. [Sample Hspital] management shall develp plicies and prcedures fr internal and external cllectin practices (including actins the hspital may take in the event f nn-payment, including cllectins actin and reprting t credit agencies) that take int accunt the extent t which the patient qualifies fr charity, a patient s gd faith effrt t apply fr a gvernmental prgram r fr charity frm [Sample Hspital], and a patient s gd faith effrt t cmply with his r her payment agreements with [Sample Hspital]. Fr patients wh qualify fr charity and wh are cperating in gd faith t reslve their discunted hspital bills, [Sample Hspital] may ffer extended payment plans, will nt send unpaid bills t utside cllectin agencies, and will cease all cllectin effrts. [Sample Hspital] will nt impse extrardinary cllectins actins such as wage garnishments; liens n primary residences, r ther legal actins fr any patient withut first making reasnable effrts t determine whether that patient is eligible fr charity care under this financial assistance plicy. Reasnable effrts shall include: 1. Validating that the patient wes the unpaid bills and that all surces f third-party payment have been identified and billed by the hspital; 2. Dcumentatin that [Sample Hspital] has r has attempted t ffer the patient the pprtunity t apply fr charity care pursuant t this plicy and that the patient has nt cmplied with the hspital s applicatin requirements; 3. Dcumentatin that the patient des nt qualify fr financial assistance n a presumptive basis; 7

8 4. Dcumentatin that the patient has been ffered a payment plan but has nt hnred the terms f that plan. H. Regulatry Requirements. In implementing this Plicy, [Sample Hspital] management and facilities shall cmply with all ther federal, state, and lcal laws, rules, and regulatins that may apply t activities cnducted pursuant t this Plicy. April 2009 (updated December 2010) 8

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