This is part one of a two-part article on compliance and your partners. You can find a link to part two, “The Two Pillars of Compliance,” at the end of this article.

Thanks to the Patient Protection and Affordable Care Act and a bevy of laws and legislation in Congress and state legislatures, healthcare providers find themselves in a swirling regulatory environment that can at times be confusing if not contradictory.

As hospitals and providers begin to feel their way through this new regulatory minefield, the responsibility for maintaining compliancy now must be shared with all partners.

While many providers must now worry about whether their partners and other third-party vendors are compliant, the very best partners are not reactive to the providers, but proactive, helping them achieve compliancy.

Minnesota, where our main offices are located, arguably has the most regulated healthcare provider industry in the nation, particularly as it pertains to patient finances. The attorney general’s office takes seriously its charge to protect healthcare consumers and as a result, every healthcare provider must “consent” to follow strict billing and collection guidelines that the rest of the country is now only beginning to catch up with.

Many of the regulations now enforced upon not-for-profit hospitals by the IRS under 501(r) have been in place in Minnesota for several years, and as a result, we are able to advise our clients outside Minnesota how to implement these billing and collection practices and to help them identify the risk to their revenue and bad debt as a result.

Patient Due Diligence

Compliance with the new IRS regulations requires healthcare providers to practice patient due diligence, which not only means following the regulations to the letter, but also documenting that the regulations were followed.

Every patient accounts receivable record should contain notes detailing when the first bill was sent, when the patient was contacted (by mail, by phone, etc.), and most importantly, was he or she fully informed about the hospital’s financial assistance policy and if so, did they receive an application?

At the same time, there should be documentation related to the effort to ascertain what third-party payers were investigated and the result of that investigation.

Finally this due diligence must be consistent, a process that must be applied to every patient.

Next: The Two Pillars of Compliance, Transparency and Information Security

Roberta Schultz, director of operations for ProSource, an Array Services company, has over 23 years of healthcare Revenue Cycle and A/R Management experience which includes managing various revenue cycle projects for multiple healthcare facilities including physician, hospital, and healthcare organizations.


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