If "Yes," does the organization's collection policy contain provisions on the collection practices to be followed for patients who are known to qualify for charity care or financial assistance?

This question and instructions would benefit from further clarification by the IRS. Hospitals often don't know whether patients qualify for financial assistance until some effort at collection is made and, even then, it may be difficult to determine whether a patient qualifies if no information is provided in response to the hospital's request. In addition, there is a lack of congruence between the form and the instructions.

DISCUSSION: IRS instructions indicate a "yes" answer and some explanation is appropriate even if the collections policy applies "more broadly to cover other types of patients" and is not limited to patients who qualify for financial assistance.

Because the question and instructions are confusing, it will almost always be useful to provide a narrative answer. Note that the narrative requested focuses on the practices hospitals follow for patients who qualify for financial assistance.

NARRATIVE REQUIRED: Yes. Part VI, line 1, to describe the collection practices followed.


Collection policies are the same for all patients. Patients are screened for eligibility for financial assistance before collection procedures begin. If at any point in the collection process, documentation is received that indicates the patient is potentially eligible for financial assistance but has not applied for it, the account is referred back for a financial assistance review.

Our hospital does not pursue collection of amounts from patients determined to qualify for charity care.

All patients having difficulty paying their bills are directed to financial counselors. The financial counselors will attempt to qualify a patient for charity care.

Our collection policies are the same for all of our patients. After a patient meets the qualifications for financial assistance, the account balance is either partially or entirely written off. Any remaining balance would be collected under the existing debt collection policy.

If a patient has requested and/or filled out a financial aid application, all debt collection activities stop until eligibility for financial assistance can be determined.

Our policy provides that we will not refer any accounts for collection until we can determine whether the individual is insured and not eligible for financial assistance.

If there is an indication that a patient may be unable to pay their bill a financial questionnaire is sent or given to the patient. On receipt of the information, we will determine eligibility for financial assistance and notify the patient within 20 days.

To access the instructions for Schedule H click here.

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