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January 12, 2015

New Rules for Nonprofit Hospitals Could Have Wider Impact

Sweeping regulations adopted by the Obama administration to crack down on nonprofit hospitals that charge low-income patients more for treatment and deploy aggressive tactics to collect payment could influence for-profit medical centers' practices, writes The New York Times. The finalized rules, developed under the Affordable Care Act, were announced by the Internal Revenue Service and the Treasury Department late last month.

Among other restrictions, the new rules require hospitals to determine if a patient is eligible for financial assistance before referring a case to a debt collector or taking legal action to secure payment. They also bar institutions from charging patients eligible for such aid more than "the amounts generally billed" to insured people, as is commonly done.

The measures have been endorsed by the federal Consumer Financial Protection Bureau, leading some health care lawyers to predict they could affect standards among commercial hospitals. Republican Sen. Charles Grassley, a frequent critic of nonprofit medical centers' financial practices, also welcomed the rules, saying they "make clear that tax-exempt hospitals have to earn their tax exemption."