Question

When, if ever, is it permissible for tax-exempt hospital to engage in aggressive collection activities, including formal collection (including lawsuits and liens) and credit reporting when patients fail to pay?

This is for a discussion post! Please provide at least 100 words with your response. Thanks in advance.

Answer 1

In order to obtain a tax-exempt, the hospital has to benefit the communities. Thus the tax-exemption plays a vital role in providing health services in the U.S. The ACA has made some of the legal changes in the year 2010. Before in 2008, the IRS compels the tax-exemption for the benefit of the communities. Later, Schedule H of new IRS advised filling tax process otherwise the tax-exemption is not possible. So the hospital must give the explanation of their financial aid and collection of debts from the patients.

The IRS decides to use a tax law to regulate the social policy in debt collection. The congress places the tax code to advantages the needed community. The hospitals must have written policies regarding the financial aid. The ACA also limits the hospital to charge at inflated rates for uninsured patients. Under tax-exempt, the hospital should not bill greater than general medical amount for insured patients. The patients should be eligible for financial aid before the collection of debts occur. The legal process should require for the collection of debts from an individual. The Extra-ordinary collection includes selling to the third party, refuse to care for the patient who does not pay, and turning to a collection agency. Thus the hospitals have their own policy in financial aid.