IRS Announces It Will Enforce Proposed Medical Debt Collection Regs

The IRS quietly announced over the holidays that not-for-profit hospitals should “rely” on 501(c)3 regulations dealing with collecting patient debt that were proposed  in 2012 but have yet to be finalized.

Over at Forbes.com, I write at length about the non-decision decision by the IRS that requires charitable hospitals to cease “extraordinary collection actions” of patients for up to 120 days until it can be determined whether or not the patient qualifies for financial assistance. The proposed regulations allow for another 120-day window for patients to subsequently file an application.

“As we reach the end of the year, we want to remind charitable hospitals that they must also take important steps to protect patients – including protecting them from hidden and high prices, and unreasonable collection actions,” wrote IRS spokesman Betsy Bourassa in a blog post published Dec. 30.

“Charitable hospitals are prohibited from engaging in certain collection methods (for example, sending a debt to a credit agency or garnishing wages) until they make reasonable efforts to determine whether an individual is eligible for assistance under the hospital’s financial assistance policy,” she wrote.