Hospital Asset Checks: Protecting Your Wealth During Treatment

Hospitals and medical facilities can request financial information from patients to determine their eligibility for financial assistance programs or to collect on medical debts. This may include information about a patient's assets, such as bank statements, pay stubs, tax returns, or other documentation. In the case of Medicaid, applicants must provide proof of their income and assets, including current pay stubs, award letters, pension statements, and account statements. To protect their assets from medical bills, individuals can establish a living trust, such as a revocable or irrevocable trust, which can provide stronger asset protection in the event of catastrophic medical expenses.

Hospitals may request financial documentation to determine eligibility for financial assistance

Federal law and some state laws require hospitals to have written policies outlining eligibility criteria and application requirements for financial assistance. These policies must be widely publicized and include eligibility criteria for financial assistance, as well as whether the policy applies to all emergency and other medically necessary care provided by the hospital. The policies must also describe how individuals can apply for financial assistance and what information or documentation they may be required to provide as part of their application.

Hospitals may request financial documentation such as pay stubs and bank statements to assess a patient's income and determine whether they qualify for financial assistance. They may also offer payment discounts or other discounts outside of their financial assistance policies (FAPs) to individuals who are not FAP-eligible.

Some state laws have additional requirements regarding financial assistance. For example, all hospitals in Washington State are required to inform patients about financial assistance options verbally and in writing and must screen patients for eligibility before attempting to collect payments. Washington State requires hospitals to develop financial assistance policies that allow patients with family incomes below 100% of the federal poverty level (FPL) to receive free care and those with incomes up to 200% of the FPL to receive discounted care. In some states, such as New Jersey and Massachusetts, the income threshold for free care eligibility is 200% of the FPL.

However, not all patients who are eligible for financial assistance receive it. Many patients do not receive legally mandated information about their potential eligibility, and there may be a gender imbalance among those who do receive financial assistance.

They may also require proof of assets for Medicaid eligibility

Hospitals may need to check on your assets to determine your eligibility for Medicaid. Medicaid is a state-run program, so the rules can vary from state to state, but in general, applicants are not eligible for Medicaid benefits if their income exceeds a certain amount per month. In most states, applicants can also have no more than $2,000 in assets.

To verify income and assets for Medicaid eligibility, states may use electronic verification systems or require beneficiaries to provide documentation of proof. Required documentation may include checking, savings, money market, credit union, and certificate of deposit (CD) account statements, life insurance policies, deeds or appraisals for one's home and other real estate, copies of stocks and bonds, deeds to burial plots, and copies of prepaid funeral arrangements, annuities, and IRAs, and 401(k) retirement accounts.

Additionally, there is a Medicaid Look-Back Period of 60 months immediately preceding the date of one's long-term care Medicaid application, during which a state's Medicaid agency scrutinizes all asset transfers to ensure none were gifted or sold for less than fair market value. This may require applicants to provide bank statements for the 60-month period prior to their application to verify that they haven't transferred any assets to bring their assets below the limit.

It's important to note that not all assets are counted towards Medicaid's asset limit. Exempt assets generally include an applicant's primary home, household items and appliances, personal effects, a motor vehicle, burial plots, term life insurance, and in some cases, IRA / 401(k) retirement benefits.

Hospitals can't inquire about debt that isn't yours

Hospitals cannot inquire about debt that isn't yours. If you receive a bill that you believe isn't yours, you can ask the debt collector to verify the debt and provide information about the collector and the bill being collected. You can also request details such as the name of the business claiming you owe them money and the amount you owe.

Debt collectors are not allowed to harass or pressure you into paying a debt that isn't yours. They must follow specific laws and regulations when attempting to collect a debt, such as avoiding harassing or abusive calls and complying with requirements when reporting the debt to consumer reporting companies.

If you believe that a debt collector is violating your rights or engaging in illegal practices, you can take action to enforce your rights and seek help from the Consumer Financial Protection Board (CFPB). You have the right to dispute the information and request verification of the debt. Additionally, you can file a complaint with the CFPB, which can lead to a swift resolution and create a record of abusive practices by collection companies.

To avoid confusion and ensure accuracy, it is important to closely examine your medical bills and confirm that the items listed are correct and reflect the treatments you received. You can also inquire about financial assistance policies or charity care programs offered by hospitals, as nonprofit hospitals are legally required to provide such assistance. Furthermore, understanding your insurance coverage and seeking a good faith estimate of the treatment costs before receiving care can help prevent unexpected financial burdens.

You can protect your assets from medical bills with a living trust

A living trust can be an effective way to protect your assets from medical bills, especially in the case of catastrophic debt due to illness or injury. While medical costs can quickly spiral out of control, a living trust can safeguard your savings and assets.

There are different types of trusts, each serving a unique purpose. A living trust is a specific type of trust that can help protect your assets while you are alive and after your passing. Trusts can pay an unlimited amount of medical expenses as long as the trust pays the bill directly to the medical provider. However, if the payment is made to the patient, there are limits to how much can be paid annually before a gift tax is applied.

Special needs trusts are another type of trust that can be set up to assist with life expenses, including certain medical costs. These trusts must be outlined in detail, and their value does not affect the beneficiary's asset limits, allowing them to continue qualifying for need-based programs.

Irrevocable trusts offer stronger asset protection by preventing any modifications to the terms once established. In the case of a lawsuit, creditors cannot make claims against the assets in an irrevocable trust. This ensures that your assets are preserved and can be passed down as intended.

When creating a living trust, it is essential to work with a lawyer who understands your specific goals and can guide you in establishing the necessary legal protections. They can advise you on organizing your assets, determining the amount to add to the trust, and addressing any applicable taxes. It is recommended to gather relevant documents, such as property deeds, financial statements, and business interests, before consulting a lawyer.

Hospitals may request bank statements to determine a patient's ability to pay

Hospitals and medical billing authorities may request bank statements, pay stubs, and gross income details from patients to determine their ability to pay. This is often done under the guise of offering financial assistance to patients who may be struggling to pay their medical bills. While this can be a legitimate request, patients should be cautious as, in some cases, it may be a scam by collection agents to gather financial information for debt collection purposes.

In the United States, patients have certain rights and protections when it comes to medical bills and collections. For example, nonprofit hospitals are required by law to offer financial assistance programs, and many other providers are willing to negotiate payment arrangements. Patients can also request a plain-language explanation of unclear items on their medical bills and verify the accuracy of the charges. Additionally, under the No Surprises Act, patients should not receive unexpected bills for emergency services from out-of-network providers. If a patient doesn't have insurance, healthcare providers must provide a good-faith estimate of the treatment cost before administering care.

It is important to note that patients are not obligated to provide their bank statements if they feel uncomfortable doing so. However, withholding this information may result in a denial of financial assistance from the hospital. Patients should carefully review the hospital's financial assistance policies and their rights regarding medical billing to make informed decisions about disclosing their financial information.

To protect themselves, patients should closely examine their medical bills to ensure they are accurate and reflect the treatments received. If there are discrepancies or issues with billing, patients can take steps to dispute the charges through the patient-provider dispute resolution process or seek help from relevant authorities, such as the Centers for Medicare and Medicaid Services or the Consumer Financial Protection Bureau.

Frequently asked questions