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December 30, 2014

IRS Takes Aim at Nonprofit Hospitals' Collection Practices

The Internal Revenue Service announced newly finalized regulations Monday aimed at cracking down on nonprofit medical centers that levy steep charges on uninsured patients and deploy aggressive tactics to collect payment, The Hill reports. The rules, instituted under the Affordable Care Act, will require tax-exempt hospitals to make payment methods more fair and costs more transparent.

Among other provisions, nonprofit hospitals will not be allowed to ask patients for money in their rooms, or to sell debt to third parties unless they have made a "reasonable effort" to offer a patient financial assistance. Violators risk losing their tax exemptions. Some not-for-profit centers have come under fire for aggressive collection practices, including pressing for payments in emergency rooms, methods the IRS said "highlighted the need for clear rules to protect patients."