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Financial Assistance Policy (FAP)

What does FAP stand for in healthcare compliance?
Concerning healthcare compliance, FAP is a term that means Financial Assistance Policy. 


What is the Financial Assistance Policy (FAP)?
Financial assistance policies were created as a result of the Affordable Care Act, signed into law by President Barack Obama in 2010, which sought to lower costs of healthcare services, allow more people access to affordable healthcare, and cover more people under the Medicare program. Policies that require non-profit or tax-exempt hospitals to provide financial assistance programs to eligible patients are known as financial assistance policies. The provided financial assistance programs help patients who cannot afford to pay for medical treatments by providing free medical services or by reducing the cost of medical services. The rules regarding these financial assistance policies are looked after by the Internal Revenue Service. 

Each non-profit hospital provides varying programs and services regarding their financial assistance policy. There’s no specific requirement regarding how much assistance is to be provided to the patient by the hospital. The Internal Revenue Code only requires that non-profit hospitals create a financial assistance policy and make applications and information readily available to patients. According to the Internal Revenue Service, financial assistance policies must include the following:

    • Criteria for patient eligibility

    • The calculation basis for costs

    • The method by which financial assistance is applied

    • Actions to be taken when nonpayment occurs

    • Information from other sources used by the hospital

    • List of providers covered by the financial assistance policy that deliver emergency care

The Internal Revenue Service also states that financial assistance policies must be easily accessible by the public. The FAPs may be made public by doing the following:

    • Using a website to make the financial assistance policy, the summary of the information covered in the financial assistance policy, and the financial assistance policy application available

    • Using mailing services and public areas to distribute paper copies of the financial assistance policy, the summary of the information covered in the financial assistance policy, and financial assistance policy application 

    • Ensuring that the patients who are served by the hospital and who are most likely to require financial assistance are informed about the financial assistance policy

    • Ensuring that the new patients served by the hospital are informed about the financial assistance policy

In addition to requiring certain details to be included in a financial assistance policy and requiring that the financial assistance policy be made public, the Internal Revenue Service also requires non-profit hospitals to apply their financial assistance policy to emergency care provided by the hospital. 

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