Patient Protection and Affordable Care Act : Internal Revenue Code section 501R Statement of Compliance with AGB (Amounts Generally Billed) Requirements

IRC Section 501(r)(5) requires that hospitals limit charges for emergency and other medically necessary care provided to individuals eligible for financial assistance to be no more than amounts generally billed (AGB) to insured individuals.

Our facility uses the “look back” method to calculate AGB. Under this method, we reviewed all paid insurance, Medicare fee for service and Medicaid claims for a 12 month period ending 11/30/2018. The “look back” review determined that the average discount totaled 82.65% of hospital charges.

The uninsured discount rate of 89% is applied to all uninsured patient accounts. The minimum amount that we charge uninsured patients is lower than the amount generally billed (AGB) to insurance. Additional discounts for patients who receive financial assistance under our policy would be greater than or equal to the uninsured rate. We test this threshold annually to ensure ongoing compliance with this requirement.