Meeting Section 501(r) Regulations

Finalized Internal Revenue Code (IRS) Section 501(r) will require tax-exempt hospitals to have certain policies and procedures in place for taxable years beginning after Dec. 29, 2015.

Hospitals will be required to meet the following summarized regulations:

  1.  Conduct a community health needs assessment (CHNA) every three years and adopt an implementation strategy to meet the community health needs identified through the CHNA.
  2. Establish a written financial assistance policy (FAP) that includes eligibility criteria and the method for applying for financial assistance, and is widely publicized.
  3. Establish a written emergency medical care policy (EMCP) that requires the provision of care to individuals for emergency medical conditions regardless of their eligibility for financial assistance.
  4. Limit amounts charged for emergency or other medically necessary care provided to FAP eligible individuals to not more than amounts generally billed (AGB) to patients with insurance.
  5. Refrain from engaging in extraordinary collection actions (ECAs) before making “reasonable efforts” to determine whether individuals are FAP-eligible.

​As part of our Private Pay Service (PPS), TruBridge will act as an extension of your hospital and ensure it is in compliance with all 501(r) regulations that are applicable to the service. We will tailor our actions to your hospital’s specific billing and collection policies and procedures to ensure compliance with the new 501(r) regulations.

TruBridge will assist PPS customers in meeting these regulations by:

  1. Work with each customer to ensure all current policies and procedures are on file and also update any necessary call scripting.
  2. Work with your staff to ensure the below requirements are met on billing statements:
    1. Hospital billing statements should contain information about:
      1. The availability of the FAP.
      2. Contact information for hospital staff (or TruBridge staff) that can provide more information about the FAP and application process.
      3. Provide patients with a website address where copies of the FAP, FAP application form and plain language summary can be obtained.
  3. Share knowledge about your FAP and application process and answer any questions from your patients.
  4. Ensure that all statement and collection letter dates are notated in account detail as well as phone calls and any additional correspondence sent to the patient to communicate FAP availability.

The PPS department will ensure all applicable customers have the necessary information present on their billing statements and that we have a current FAP on file.

If you have any questions regarding the 501(r) regulations, please contact us today.

Section 501(r); Additional Requirements for Charitable Hospitals, 79 Fed. Reg. 250; Dec. 31, 2014