AMA pushes for stricter standards for hospital charity care policies

Photo: Maskot/Getty Images

The American Medical Association has voted to support greater oversight of nonprofit hospitals' charity care policies that justify their tax-exempt status.

The AMA wants a standardization of the financial assistance process as current criteria varies across hospitals, making the benefit inaccessible to some patients who are eligible.

This would help ensure financial assistance reaches patients in need, the AMA said.

The newly adopted policy directs the AMA to advocate for the development of publicly accessible minimum eligibility standards for nonprofit hospital financial assistance programs, required screening of patients for charity care eligibility prior to billing and standardizing the definition of what is considered a community benefit when evaluating community health improvement activities.

The AMA will also advocate for the government to be able to enact penalties or revoke a tax-exempt status for hospitals that don't comply.

The vote was taken by physicians and medical students at the Interim Meeting of the American Medical Association.

WHY THIS MATTERS

Hospitals are eligible for nonprofit status, which exempts them from income, property and sales taxes.

This results in billions of dollars of tax savings annually on the condition hospitals provide charity care and other community services.

According to a report by the Lown Institute, 80% of nonprofit hospitals give back less to their communities than they receive in tax breaks, the AMA said.

Nonprofit hospitals have broad flexibility in defining their own eligibility criteria for patients to qualify for financial assistance under the current legal and regulatory requirements in the Affordable Care Act, Internal Revenue Code and state laws, the AMA said.

"Failing to standardize the financial assistance process across all nonprofit hospitals makes the benefit inaccessible to many eligible people," said AMA president Dr. Bruce A. Scott. "A patient may qualify for aid at one hospital, but not at a hospital across town. Often the application process is not clear and requires patients to complete onerous paperwork requests, discouraging patients from completing financial aid applications. In some cases, patients are not screened for eligibility to ensure financial assistance reaches those in need."

AMA policymakers also discussed increased enforcement on nonprofit hospitals that provide little or no community benefit.

THE LARGER TREND

The AMA also voted to fight retrospective denial of payment for care after prior authorization has been given.

Prior authorization signifies that the health plan has reviewed the medical necessity of the treatment and deemed it appropriate for coverage, the AMA said. 

Physicians and medical students at the AMA Interim Meeting of House of Delegates voted to adopt a policy that deems the insurer-vetting process as more than adequate for payment after an authorized medical service is performed.

The AMA supports a federal prohibition on the inappropriate denial of payment for medically necessary care that has been pre-certified by an insurer. The AMA said it would also encourage legal action against insurers that engage in inappropriate post-service payment denials and payment recoupment.

The Centers for Medicare and Medicaid Services this year released final regulations on prior authorization.

Lawmakers this past June introduced an updated, bipartisan version of the Improving Seniors' Timely Access to Care Act in both the House (H.R. 8702) and Senate (S. 4532).

Over a dozen states enacted laws this year on prior authorization delays.

Email the writer: SMorse@himss.org