By Doug AldeenDoug Aldeen• ERISA Healthcare Attorney and General Counsel
The Texas Hospital District statute requires a determination of ability to pay ( at cost) FIRST prior to initiating any extraordinary collection action (Texas Special District Laws Code 1053.111). In short, the burden is on the not for profit tax supported facility to prove the resources are available (subject to court review) to satisfy any outstanding obligation.
While no specific threshold exists, my best guess is that 400% of the FPL is completely free. As a reference, a family of four that earns <$120,000 (AGI) equals 400% of the FPL. Keep in mind that 62% of the US earns <$50,000 (350% of the FPL) and 40% of the US does not pay one nickel in income taxes. I have attached the Social Security Net Income report for your reference which further breaks down these statistics.
Practice Tips:
Policymakers: Flip the script: instead of the patient submitting the paperwork, make the facility prove ability to pay. This changes the entire dynamic. You can impact a 100mm market of folks that qualify either in whole or in part for financial assistance.
Plan Sponsors/Advisors: Either RBR these facility’s (zero threat of balance billing) or prospectively direct contract.
Food for thought.
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Earning <$58,320 = Free Health Care
58% of Americans earning less than 400% of the Federal Poverty Level qualify for free health care. Most plan sponsors have failed to recognize the impact this would have on their second most expensive business expense after salaries if they would simply transfer risk through IRC 501r hospital financial assistance policies.
