Owe Major Medical Debt?
Via the Affordable Care Act, Congress has now mandated that the IRS direct tax-exempt hospitals to ease up on medical debt collection. Currently, over 57% of hospitals are tax-exempt and will be required to observe the new regulations if passed.
The proposed rules would require that such hospitals inform their patients of charity care policies or reduced fee programs, a practice that has thus far not been obligated. Furthermore, these hospitals are not allowed to use “extraordinary collection actions” on low-income patients receiving financial assistance. Under the proposed guidelines, the following practices would be prohibited:
(1) Contacting credit reporting agencies to report on the patient;
(2) Placing liens or foreclosing on a patient’s property;
(3) Seizing bank accounts or garnishing wages;
(4) Filing civil suits or causing arrests or detainment.
These benefits come at a price, however, as the health reform goes into full effect by 2014, requiring all Americans to be insured, whether they have private insurance or opt into government provided health insurance, with limited exceptions. The public can comment on the IRS’s proposed rules until September 24, 2012, which could be implemented shortly thereafter.