AHA releases guidelines on fair billing and collection

Government asked to clarify Medicare regulations

The American Hospital Association (AHA) in Chicago has announced it would provide guidelines for hospitals on billing and collection practices to ensure that poor patients and patients who lack health insurance are treated in a "fair-and-balanced" manner.

"Providing the patients and communities we serve with quality health care is our top priority," AHA president Dick Davidson said in a statement accompanying the release of the guidance.

"Hospitals see every day the stark reality that not all patients have insurance to help cover the cost of their care. In the absence of health care coverage for all, we are working on a number of ways to assist these patients and to ensure that hospitals are there when their communities need them," he added

The new AHA guidelines stipulate that hospitals should:

  • help patients with payment for their hospital care by helping them qualify for existing coverage options, and communicate more effectively about available payment programs;
  • ensure that hospital policies are applied accurately and consistently;
  • make care more affordable for patients with limited means;
  • implement fair and balanced billing and collection practices.

As part of this effort at improving hospital billing practices, however, the AHA also urged the federal government to clarify Medicare regulations that many hospitals perceive as a barrier to providing discounted services to indigent patients.

Medicare regulations require hospitals and other providers to maintain a uniform list of established charges for each product and service provided. Medicare bases its payments to hospitals on these rates, but it, and other third-party payers, typically negotiates discounts for goods and services provided to their members.

However, Medicare regulations and most third-party payer contracts stipulate that charging different rates for the same services is fraudulent.

So while covered patients pay for goods and services at a discount of the established charge, many providers have interpreted the regulations to mean that uninsured patients must be charged the full amount.

In a Dec. 16 letter to Health and Human Services Secretary Tommy Thompson, Davidson urged that Medicare regulations be re-examined.

"Hospitals believe that patients of limited means should not have to pay full charges simply because they have no coverage," he wrote. "But federal Medicare regulations, as written today, constitute a string of barriers that discourage hospitals from reducing charges or forgiving debt for these patients without potentially running afoul of the law."

(Editor’s note: For copies of the letter and the new AHA guidelines for hospitals, go to: www.aha.org.)