<aside> 📅 Last updated February 26, 2024.

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About IRS Section 501(r)

IRS Section 501(r) requires that non-profit 501(c)(3) hospitals offer financial assistance. It also requires that when an individual is eligible, charged amounts cannot exceed “amounts generally billed (AGB).”

AGB is generally defined by law in one of two ways: the ratio of a hospital’s allowed amounts divided by billed amounts for a 12-month period across all public and private payers (called the look-back method), or as the Medicare or Medicaid price (called the prospective method).

With carefully crafted SPD language, plans can leverage a member’s 501(r) eligibility to reprice the claim to AGB, saving not only members money, but also plans money.

1. Set up plan configurations

1. Log into your Goodbill account and go to Configurations.

2. Configure the relevant settings:

   

   1. Set how many days Goodbill has to engage members before a claim is returned. This is set by default to 15 days.
   2. Set 501(r) / financial assistance to pre-payment.
   3. Set any claim-related thresholds to narrow which claims will be eligible for pre-payment 501(r) and, thus, plan savings.

   <aside> ⚠️ IMPORTANT

   👉 When will claims be engaged for 501(r) / financial assistance? MUST be set to Pre-payment in order to capture plan savings.

   👉 Any claims that are not eligible for pre-payment 501(r) plan savings due to your plan configuration will, by default, still be eligible for member savings. In other words, a member will always have the ability to screen themselves and apply through Goodbill at any time to capture member savings unless you explicitly set When will claims be engaged for 501(r) / financial assistance? to Never.

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2. Modify Summary Plan Documents (SPD)

3. Set up CARCs and RARCs

Our goal is to automate claim workflows by communicating through the 837i claim via CARCs and RARCs. See the Technical Implementation Guide for a detailed look at the claim flow.

These codes serve 2 purposes:

1. When an individual has a third-party payer, many hospitals will not process 501(r) applications until the claim has been at least initially adjudicated. In the event a member screens themselves in the Goodbill product, is initially eligible, and submits an application, denying the claim pending further review enables the hospital to process the member’s application.
2. When the hospital approves a member’s application, communicating the claim’s AGB repricing.

<aside> 👍 BEFORE READING

We propose these as starting places, as we realize administrators may have different claim setups or 837i layouts. We will ultimately work with you to adhere to your preferred flow and format.

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Identification of repricer

This is used to identify Goodbill as the repricer.