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Benchmarks: Hospitals’ IRS Schedule H Community Benefit Reporting

Hospitals and systems allocated 12.3% of their total expenses toward community benefit in 2011, according to a new analysis of Schedule H filings. That’s up from 11.3% in 2009. [Tax-exempt hospitals report their community benefits to the IRS in a form called Schedule H.]

Community benefit expenditures covered charity care and financial assistance for patients, bad debt, absorption of underpayments from Medicaid and Medicare programs, community and population health improvement, underwriting of medical research and health professions education, and subsidization of high cost essential health services.

Benchmark community benefit costs are presented for systems and by hospital size, type, and location. Spending percentages are broken out for types of community benefits as well. Also benchmarked are practices on threshold use of federal poverty guidelines for determining free and discounted care for patients.

Source: Ernst & Young LLP. Results from 2011 tax-exempt hospitals’ schedule H community benefit reporting. American Hospital Association, Aug. 2014. http://www.aha.org/content/14/schedhreport.pdf

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

Another Update: Can Hospitals Pay Patient Health Insurance Premiums?

Here’s what’s new since the last update on whether or not a hospital can pay the health insurance premium for a patient:

Where federal regulators stand on third party payments of patient health insurance premiums has not been clearcut. Based on a letter from the Centers for Medicare & Medicaid Services on May 21, the American Hospital Association has advised members that “payments from private, not-for-profit foundations to qualified health plans (QHPs) on behalf of individuals who enroll in coverage via the Health Insurance Marketplaces are not prohibited.” However, AHA also points out there is no federal mandate that qualified health plans must accept premium subsidies from hospitals.

The insurance industry represented by America’s Health Insurance Plans wants premium support payments to be made only through independent foundations and not directly from hospitals or hospital-affiliated foundations. Insurers fear third-party premium payments for already sick patients could unfavorably skew the insurance pool and drive up costs.

Nonetheless, some hospitals are moving ahead to assist patients. The South Florida Hospital and Healthcare Association and the Healthcare Association of New York State are each looking at coordinating third party premium support options for their members.


HHS confirms payments from foundations to QHPs are not prohibited. American Hospital Association Legal Advisory, June 5, 2014. http://www.aha.org/advocacy-issues/tools-resources/advisory/2014/140605-legal-adv.pdf  [AHA members only]

Sebelius K. Letter to R. Umbdenstock, American Hospital Association, re: qualified health plan issuers accepting premium and cost-sharing payments from third parties. Secretary of Health and Human Services, May 21, 2014. http://www.aha.org/content/14/140521-sebelius-umbdenstock.pdf

Appleby J. Hospitals seek to help consumers with Obamacare premiums. Kaiser Health News, Aug. 14, 2014. http://www.kaiserhealthnews.org/Stories/2014/August/14/Hospitals–Seek-To-Help-Consumers-With-Obamacare-Premiums.aspx

Related sources:

Office of Inspector General, Dept. of Health and Human Services. Supplementary special advisory bulletin: independent charity patient assistance programs. Federal Register 79(104):31120, May 30, 2014. http://t.co/xyGQ6O86yt

Clark C. Hospitals begin subsidizing exchange premiums via third parties. HealthLeaders Media, May 28, 2014. http://www.healthleadersmedia.com/page-1/HEP-304974/Hospitals-Begin-Subsidizing-Exchange-Premiums-via-Third-Parties

Caramenico A. Sebelius OKs premium payments from third parties. FierceHealthPayer, May 23, 2014. http://www.fiercehealthpayer.com/story/sebelius-oks-premium-payments-third-parties/2014-05-23

Jost T. Implementing health reform: third-party payments and reference pricing. Health Affairs Blog, May 22, 2014. http://healthaffairs.org/blog/2014/05/22/implementing-health-reform-third-party-payments-and-reference-pricing/

Carlson J. HHS warns that premium-assistance charities must be independent. Modern Healthcare, May 22, 2014.  http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0CCIQFjAA&url=http%3A%2F%2Fwww.modernhealthcare.com%2Farticle%2F20140522%2FNEWS%2F305229964&ei=S26bU9i1HM6dyASf-ILIDA&usg=AFQjCNHyKUVKd2VEJYQmQWzExf3jDuwlNQ&bvm=bv.68911936,d.aWw

Miller JS. Letter to Marilyn Tavenner, Centers for Medicare & Medicaid Services, re: Patient Protection and Affordable Care Act; third party payment of qualified health plan premiums – (CMS-9943-IFC) AHIP comments. America’s Health Insurance Plans, May 13, 2014. http://www.regulations.gov/contentStreamer?objectId=09000064816f7ae5&disposition=attachment&contentType=pdf

CMS interim final rule: premium subsidies. American Hospital Association Legal Advisory, April 8, 2014. http://www.aha.org/advocacy-issues/tools-resources/advisory/2014/140408-legal-adv.pdf  [AHA members only]

Centers for Medicare and Medicaid Services. Patient protection and affordable care act: third party payment of qualified health plan premiums; interim final rule with comment period. Federal Register 79(53):15240, March 19, 2014. https://www.federalregister.gov/articles/2014/03/19/2014-06031/patient-protection-and-affordable-care-act-third-party-payment-of-qualified-health-plan-premiums

HHS issues interim final rule on premium subsidies; continues to discourage insurers from accepting premium support from hospitals. American Hospital Association Special Bulletin, March 14, 2014. http://www.aha.org/advocacy-issues/bulletin/2014/140314-bulletin.shtml [AHA members only]

Centers for Medicare and Medicaid Services. Third party payments of premiums for qualified health plans in the marketplaces. Feb. 7, 2014. http://www.aha.org/content/14/140604-aha-cms-faq.pdf

Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Updated AHA Guidelines & Principles for Hospital Billing and Collections

AHA has updated its principles and guidelines for hospital billing and collection practices. The 4 key principles endorsed in the statement are:

  • Treat all patients equitably, with dignity, respect and compassion
  • Serve the emergency health care needs of all, regardless of the ability to pay
  • Assist patients who cannot pay for part or any of the care they receive
  • Balance needed financial assistance for some patients with the broader fiscal responsibilities allowing the hospital to stay open and provide care to all within the community

The guidelines briefly address the need to help patients with payments for hospital care, make care more affordable for patients who qualify for financial assistance, and ensure fair billing and collection practices.

The following organizations have also endorsed these principles and guidelines:

  •  Association of American Medical Colleges
  • Catholic Health Association of the United States
  • Children’s Hospital Association
  • Federation of American Hospitals
  • Healthcare Financial Management Association
  • National Association of Public Hospitals and Health Systems

Hospital Billing and Collection Practices Statement of Principles and Guidelines. American Hospital Association, May 5, 2012. http://www.aha.org/presscenter/pressrel/2012/120530-pr-BillingPractices.pdf

Posted by the AHA Resource Center, (312) 422-2050, rc@aha.org