Senate reviewing new law that will severely restrict hospital debt collections
July 12, 2021
If you’re a hospital administrator or consult with hospital finance, you need to be aware of “The Comprehensive Debt Collection Improvement Act”, also known as H.R. 2547.
What is it?
It’s a Bill that narrowly passed the House of Representatives on 5/13/21 on strictly party lines. This bill currently sits in the Senate Committee on Banking, Housing and Urban Affairs and could pass the Senate next month. President Biden has signaled that he will sign the Bill into law.
What does this mean for hospitals?
In short, a LOT. Once this bill becomes law, here's what will happen:
(1) A debt collector is prohibited from collecting a medical debt less than two years old;
(2) Medical debt may not be reported to a credit reporting agency that is less than 1 year old;
(3) A hospital reporting medical debt to a credit reporting agency must first provide notice to the patient regarding the restrictions on including medical debt on credit reports
Bottom line: If passed, The Comprehensive Debt Collection Improvement Act would be a significant downward pressure on hospital cash flow.
What can a hospital do to offset decreased cash flow?
1. Manage Costs
HPS offers a dashboard-based cost benchmarking system that analyzes both inpatient and outpatient clinical cost efficiency. Performance targets are set to local market cost levels achieved by direct competitor hospitals. Inpatient and Outpatient cost savings targets are detailed by achieving market percentiles efficiency levels.
2. Transparent Pricing
HPS reviews all of your current prices and contract terms to suggest the best market-defensible prices. In nearly all of our Transparent Pricing Review projects, we decrease the number of line-item codes priced above market while maintaining or increasing net patient revenues. In addition, our pricing model factors how the new prices will impact Medicare outlier payments.
If you would like more information on any of HPS's products and services, feel free to schedule a time to talk on my private calendar: go.oncehub.com/ricklouie