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New Rules For Non-profit Hospitals in the US Who Sue Patients
Non-profit hospitals in the US get big tax breaks for providing care for patients who can't afford it. Under new IRS rules these hospitals must take extra steps to inform poor patients they may qualify for financial assistance
 
Last month, ProPublica and NPR detailed how one nonprofit hospital in Missouri sued thousands of lower income workers who couldn't pay their bills, then seized their wages, all while enjoying a big break on its taxes.
 
Since then, the IRS has released long-awaited rules designed to address such aggressive debt collection against the poor. Largely because these new rules fill a void — there were hardly any rules at all — patient advocates agree they are a major step forward.
 
Even so, they have easily exploitable gaps. It remains up to each hospital, for example, to decide which patients the new rules should apply to. And because the rules only apply to hospitals that have been granted tax-exempt status by the IRS, they don't apply to for-profit hospitals or most public hospitals. ProPublica reported last month that public hospitals can be even more aggressive in collecting debt than nonprofits.
 
Most hospitals in the U.S. are charitable organizations. They don't pay taxes because they are supposed to be a key part of the safety net for the nation's poor patients. In theory, patients who aren't covered by Medicaid and can't afford insurance — or who are underinsured and can't afford their out-of-pocket costs — can receive necessary care from a nonprofit hospital without facing financial ruin. Each hospital is required to offer services to lower-income patients at a reduced cost and to have a financial assistance policy that states who qualifies for aid, known as "charity care."
 
But while hospitals are required to have this policy, there have been very few rules on how they publicize it or how they treat patients who qualify. That's where the new rules, which go into effect in 2016, will make the biggest difference. The rules were required as part of the 2010 Affordable Care Act.
 
At Heartland Regional Medical Center in St. Joseph, the hospital featured in our story, many patients had been sued despite apparently qualifying for financial assistance. In interviews, patients either didn't know the hospital had charity care or wrongly believed they didn't qualify.
 
Under the new rules, all nonprofit hospitals will be required to post their financial assistance policies on their websites and offer a written, "plain language summary" of them to patients when they're in the hospital. If patients don't apply for assistance or pay their bills, then the hospitals are required to send at least one more summary of the policy, along with mentioning it on billing statements.
 
And if hospitals plan to sue patients over unpaid bills, they must attempt to verbally tell the patients about their policies, as well as send notices that they are planning to sue and that the patients may qualify for financial assistance.
 
Hospitals that don't take these steps before suing patients could face the ultimate penalty of losing their tax-exempt status.
 
That sounds clear enough. But the first catch is that the IRS does not have a history of aggressive enforcement.
 
"That's always been the problem with the charitable hospital rules," said Corey Davis, an attorney with the National Health Law Program, a nonprofit patient advocacy organization. "The IRS doesn't enforce them and nobody else can enforce them."
 
The second catch is that hospitals are still responsible for setting their own financial assistance policies, and these protections are only helpful to patients who qualify for help.
 
"There's all sorts of discretion because [hospitals] just have to have a policy," said Chi Chi Wu of the National Consumer Law Center. The rules don't set a baseline for the type of assistance hospitals must provide, she said.
 
A hospital could limit aid to uninsured patients with income below the federal poverty line — $11,670 for a single person with no dependents. A hospital could also restrict aid to uninsured patients, excluding patients with bare-bones insurance policies who might face huge out-of-pocket payments.
 
For patients excluded by the policy, all these protections would be effectively moot. Even those covered by the policy might receive some reduction on cost, but still find themselves pursued over the outstanding balance.
 
The hospital industry's reaction to the new rules has been muted. A spokeswoman for the American Hospital Association said it had no comment. But best practices for the industry, set by the Healthcare Financial Management Association, urge hospitals to take steps beyond the new rules to ensure patients eligible for financial assistance aren't the target of lawsuits. For example, as we noted in our story, some hospitals automatically identify some patients as eligible without them having to apply.
 
Jessica Curtis, an attorney with Community Catalyst, a national nonprofit consumer organization, joined other advocates in stressing that the new rules were welcome. But, as before, she said, there will be large variation among hospitals in how generously they treat lower-income patients. "It will come down to: How seriously does the hospital take this issue?" she said.
 
Courtesy: ProPublica.org

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SEBI orders Vijay Kumar Gaba to cease and desist from acting as a portfolio manager

Vijay Kumar Gaba had persuaded an investor, Madan Mohan Sharma, to invest in shares and securities and assured a return of 30% per annum

 

In a SEBI Order, Vijay Kumar Gaba (VKG) has been directed to cease and desist from acting as a portfolio manager. Further,  the SEBI Order has said that steps have to be taken to prevent VKG from soliciting and collecting funds from investors and carrying on portfolio management services without due registration from SEBI. It becomes necessary for SEBI to take urgent preventive action. “In the light of the same, I find there is no other alternative but to take recourse through an ad interim ex-parte order against VKG for preventing him from collecting funds and offering portfolio management activities without obtaining registration from SEBI in accordance with the law,” said the SEBI Order.
 
SEBI has a statutory duty to protect the interests of investors in securities and promote the development of, and to regulate, the securities market. Section 11 of the SEBI Act has empowered it to take such measures as it deems fit for fulfilling its legislative mandate enshrined in SEBI Act read with PMS Regulations for the purpose of investor protection.
Regulation 2(cb) of PMS Regulations reads as: “portfolio manager” means any person who pursuant to a contract or arrangement with a client, advises or directs or undertakes on behalf of the client (whether as a discretionary portfolio manager or otherwise) the management or administration of a portfolio of securities or the funds of the client, as the case may be.
 
SEBI received a complaint from Madan Mohan Sharma against  VKG and Master Capital Services Limited (MCSL) alleging inter alia that VKG persuaded Sharma to invest in shares and securities and assured a return of 30% per annum. Sharma has also alleged that VKG and MCSL connived and cheated Sharma to the tune of Rs6.60 crore.
 
Sharma in his complaint said, “Initially, I was not interested and was hesitant in making investment, but due to his representation and categorical assurance of giving 30% return on the principal amount irrespective of the fluctuation of the market and saying that he and his trading member would be liable as he is taking my money, I handed over different cheques of total Rs5.85 crore from 01.07.2006 to 22.09.2006 drawn on Syndicate Bank, Khan Market, New Delhi to Vijay Kumar Gaba. I had not filled the name of the payee in the cheques, only signed. Thereafter, Vijay Gaba took various signatures on various blank forms and on query replied that these are just formality. He further took Rs1 crore in the month of October 2007 which was also given through 2 cheques of Rs50 lakh each. The undersigned has paid Rs3,15,000/- to VKG in the first week of October 2006 as his fee through cheque. On demand of 30% return as promised by VKG, he started buying time and wrote me several letters and undertaking admitting his liability and promised to pay the amount. Ultimately on 10.12.2010 he executed a mutual agreement wherein he has again admitted his liability and promised to pay the amount in a time bound manner mentioned in the agreement."
 
In view of Sharma’s complaint, SEBI felt, “I find that these activities are in violation of various provisions of PMS Regulations and could put investors at great risk. Considering the facts and circumstances of the case, there is a likelihood that VKG may continue to carry out this business in contravention of PMS regulations, which may lead to his engaging with more investors in such a manner.”
 
Finally, SEBI took action on the portfolio manager on the complaint of an investor and did not feel that it was an isolated dispute.
 

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Nifty, Sensex may drift higher– Thursday closing report

Nifty will head higher subject to dips caused by global sell-offs

 

Market sentiments were boosted by the surprise rate cut from Reserve Bank of India (RBI) on Thursday, which resulted in the benchmarks recording strong gains. We had mentioned in Wednesday’s closing report that a close above yesterday’s high will support a bullish position although the indices were weakening. The big gap in opening on Thursday was followed by the indices progressively moving higher except for some volatility at the beginning and at the end of the session.
 
S&P BSE Sensex opened at 27,831 while CNX Nifty opened at 8,425. Sensex moved from the low of 27,704 to 28,195 and closed at 28,076 (up 729 points or 2.66%). The 50-share Nifty hit a low 8,381, moved to the level of 8,527, and closed at 8,494 (up 217 points or 2.62%). NSE recorded a volume of 107.84 crore shares. India VIX fell 6.31% to close at 16.1600.
 
Before the market opening today, RBI announced a surprise cut in repo rate under the liquidity adjustment facility by 25 basis points to 7.75%.
 
Finance Minister Arun Jaitley hailed the decision of RBI to cut the interest rate, saying it is a positive development for the Indian economy and will certainly help in reviving the investment cycle the government is trying to restore.
 
The RBI's unexpected 25 basis points rate cut does not change the country's sovereign credit profile, an analyst at Fitch Ratings told the media.
 
Interest rate sensitive stocks like HDIL (18.59%), Indiabulls Real Estate (10.55%) and DLF (10.39%) were among the top four gainers in the ‘A’ group on the BSE.
Pipavav Defence and Offshore (4.50%) was the top loser in ‘A’ group on the BSE. In it December 2014 ending shareholding pattern the FIIs holding were reduced from 2.28% in September 2014 to 1.36%, DIIs holding were also reduced from 14.03% to 13.56% while retail shareholding were increased from 39.19% to 40.58%.
 
Except for Hindalco (0.18%) and Hindustan Unilever (0.05%) all the other stocks in the Sensex 30 pack closed in the green. HDFC (7.16%) was the top gainer followed by SBI (5.02%) and ICICI Bank (4.60%).
 
On Wednesday, US indices closed in the red. US retail sales dropped 0.9% in December, the biggest slide since January 2014, following a 0.4% gain in November that was smaller than previously estimated, according to the Commerce Department.
 
Except for NZSE 50 (0.12%) and Taiwan Weighted (0.16%) all the other Asian indices closed in the green. Shanghai Composite (3.54%) was the top gainer.
 
In China, the latest data showed that Chinese banks issued 697.3 billion yuan ($112.5 billion) worth of new loans in December, down from 852.7 billion yuan in November. Total social financing, a broader measurement of credit in the economy, rose to 1.69 trillion yuan in December from 1.15 trillion yuan in November. China's foreign exchange reserves stood at $3.84 trillion at the end of December, down from $3.89 trillion at the end of September.
 
European indices and US premarket futures were extremely volatile in the afternoon (declining deeply into the red from a strong rally) after Swiss National Bank shocked investors by removing its currency ceiling against the Euro and slashing its deposit rate to negative 0.75%. This is what caused the sharp selloff later in the session in India.
 
However, at the time of writing, European markets had turned around strongly and US Futures were trading in the green.
 

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