Hospitals likely to need help with identity theft fight, IRS rules

Anne Zieger — Wed, 22 Oct 2008 03:36:42 -0400

Hospitals are groaning and accounts receivable management companies are cheering at the federal regulations going into effect at the beginning of next month. A handful of regulatory actions affecting how hospitals deal with their financial information are likely to push hospitals into calling in extra help from vendors and consultants, observers say.

As we've previously reported, starting November 1, hospitals will be required by the FTC to develop a written plan of how they will comply with new Red Flag Alert legislation, designed to force creditors to protect consumers from identity theft. Hospitals must make sure the monitoring is based on the facility's specific history with identity theft, updated annually and approved by its board. Also, at the beginning of 2009, hospitals will have to deal with revisions to IRS Form 990, which requires hospitals to document management policies, political campaigning and lobbying, non-cash contributions and information on tax-exempt bonds.

Tougher regulations like these are creating an opportunity for vendors like TransUnion and software vendor nTelagent, which offer software that verifies a patient's identity to fight identity theft. Tools like these offer providers methods for tracking down inaccurate Social Security numbers, doubtful age information, questionable insurance data and more. Some packages like these offer prompts to employees telling them how to handle the specific issue, too.

Meanwhile, hospitals are likely to need plenty of consulting help compiling information for their Form 990s, which will require information on governance and management, political campaigning and lobbying, non-cash contributions and tax-exempt bonds. Later, in the 2010 filing year, the ante will only be raised further, will hospitals being required to document bad debt expense and charitable giving.

To learn more about the changes:
- read this InsideARM piece

Related Articles:
FTC cracks down on medical identity theft
Trend: Identity thieves get better at stealing medical records
The growing problem of medical identity theft
IRS releases instructions for new Form 990

Study: Better records could boost self-pay collections

Wed, 16 Apr 2008 06:59:55 -0400

Struggling to manage your bad debt load? You're not alone--but some of the pain may not be necessary. According to a new study, a good percentage of the self-pay accounts hospitals write off could probably have been collected upon if hospitals tightened their financial screening procedures. The study, which was done by Nashville, TN-based vendor nTelagent, analyzed receivables between 90 and 180 days old from January 2007 to January 2008. They drew the records from 40 providers, some of which were existing clients.

Researchers found that 30 percent of the self-pay accounts were written off as bad debt because patient's incomes and net worths weren't obtained or verified. However, when nTelagent did the research, it found that more than 16 percent of the patients being studied could be classified as having high income and/or high net worth, while another 33 percent had moderate household income or net worth. nTelagent suggests that all of these accounts could have been re-billed or outsourced to collections. Meanwhile, another 17 percent of written-off accounts might have qualified for government assistance or charity care programs, the vendor reported.

To learn more about the study:
- read this InsideARM piece

Related Articles:
In 2007, bad debt rising for hospitals
Bad debt hits Health Management Assoc. earnings
FL hospital sued over sale of $1.9B in bad debt