ARM Industry Gets Face Time with Lawmakers on Health Care Reform Proposals

Accounts receivable management industry advocates had several face-to-face meetings in Washington Thursday with Capitol Hill lawmakers working on health care reform.

ACA International executives and members were in the capital to rally around the not-for-profit hospital industry that could be harmed by proposed legislation to toughen standards affecting their tax-exempt status eligibility.

Specifically, Senate Finance Committee leaders Max Baucus (D-Mont.) and Chuck Grassley (R-Iowa) have proposed mandating that not-for-profits provide a minimum amount of charity care to qualify for the federal tax credit. They also are considering proposals that would affect how not-for-profit hospitals engage collections agencies.

“Our position now is against any punitive measures that would restrict any use of collection companies or outsourcing,” said ACA President Jay Gonsalves, who met with lawmakers.

Earlier this week, ACA issued a news release alerting members that the proposals could be devastating to the medical ARM industry and called on its members to help educate their representatives in the House and Senate. In the release, Adam Peterman, ACA’s government affairs director, said that his chief concern is discussion on restricting the ability of non-profit hospitals to seek payment for services, including making it difficult for providers to outsource collection activity to third party vendors.

After the meetings on Thursday, Peterman told insideARM that he doesn’t believe lawmakers are considering delaying when not-for-profit hospitals can outsource a bad debt for collection.  However, when asked if lawmakers have similar views about early out billing and collections before an account is classified as bad debt, Peterman said, “We are continuing discussions on a whole host of issues. I’ll have a lot more to say once we have a bill introduced.”

An aide to Sen. Baucus told insideARM that legislation detailing the proposals that would affect non-profit hospitals’ tax-exemption eligibility and their use of collections agencies is tentatively scheduled to be released next week.

Peterman said ACA representatives in their meetings Thursday focused more on educating lawmakers about the nuts and bolts of what health care providers do and what services collection agencies provide on their behalf.

“I would stay the meeting was helpful to both parties and the dialogue will continue,” he said.

Kaulkin Ginsberg Analyst Michael Klozotsky said he applauds the ACA for staying out in front of issues affecting the ARM industry and its clients. However, he is concerned that the organization may have rushed to judgment about what the health care reform bills will contain.

Klozotsky said revisions to Form 990 that tax-exempt organizations must file with the Internal Revenue Service already put the spotlight on not-for-profit hospitals’ free care practices. He said some of the proposed legislation on the issue is in tandem with the new IRS mandates and would not hurt the ARM industry.

“Those accounts (charity care) are expensive and difficult to collect,” Klozotsky said. “They’re asking that you get people in the right bucket before you start collecting on those accounts.”

Klozotsky cautioned that reacting without adequate information could foster an adversarial relation between Congress and the ARM industry, which he said isn’t viewed as a friend to many consumers in this economy. Nonetheless, he said new legislation that places additional requirements on hospitals may not be bad for health care collections agencies.

“There may be opportunities for collections agencies to develop new business lines,” such as patient counseling, scoring or analytics, to help hospitals meet the new legislative requirements, he said.