501r Compliance and Regulations

Information to ensure you retain 501r status

501r Compliance and Regulations

Nonprofit health systems and hospitals are required to comply with section 501r of the Internal Revenue Code. It imposes four requirements for nonprofit hospitals and health systems in order to maintain their tax-exempt, nonprofit status. Three of these requirements relate directly to a hospital’s revenue cycle operations. Failure to comply could result in substantial penalties or the loss of nonprofit status. Americollect has put together 501r Compliance and Regulations information that will help ensure your facility retains its 501r status.

The Affordable Care Act (ACA) added new requirements that hospitals must comply with to keep their tax-exempt status under 501r. Americollect is here to help with 501r compliance and regulations information! On this page you will find a sample Billing and Collection Policy, a compliance check list, and links to our recorded webinars on 501r (4) Financial Assistance Policy and 501r (6) Extraordinary Collection Actions.

Click here to view a sample Billing and Collection Policy.

    • Click here to view a Collection Policy checklist.
    • Click here to view a 501r Financial Assistance Policy checklist.
    • Click here to view a 501r Reasonable Efforts checklist.
    • Click here to view a widely publicized 501r checklist.
    • Click here to view a 501r addendum to a Collection Services agreement. 

Click here to view recorded webinar on 501r (4) Financial Assistance Policy.

Click here to view recorded webinar on 501r(6) Extraordinary Collection Actions.

Click here to view Americollect’s newsletter on 501r Reasonable Efforts.

  1.  At Least Three Statement: Send billing statements with conspicuous written notice about financial assistance.
  2.  Plain Language Summary: Mail a plain language summary with only one post-discharge communication.
  3.  Final Notice – Written notice to state a deadline after which the identified ECA(s) (extraordinary collection actions) may be initiated.
  4.  Oral Notification – Orally notify patients about financial assistance at least 30 days before ECAs.

These “reasonable efforts” are to be spelled out in the billing and collection policy as well as the timeline for usage by the health system.

This article will go into detail on how to accomplish the reasonable efforts.

Americollect is offering FREE Financial Assistance and Billing and Collection policy reviews. To take advantage of these free reviews, just email your policies to Shawn@americollect.com