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Revenue cycleA coverage check from the visit can be stale by billing day in 2027. Here's a screening sequence your patient access team, business office and vendors can run before any patient gets a collection call.
Screen self-pay accounts at registration and again before the first statement goes out. Check Medicaid, Marketplace, Medicare and commercial coverage first, then financial assistance. From January 2027, expansion adults renew Medicaid every 6 months and their retroactive coverage shrinks to 1 month, so a coverage check from the visit can be out of date by billing day.
Where the rule stands
TSI (Transworld Systems Inc.) publishes it. TSI provides Accounts Receivable Management (ARM), Healthcare Revenue Cycle Management (RCM), CXBPO and Loan Servicing (via UAS). DebtNext, a TSI company, makes recovery management software for creditors. Some options this page describes compete with services TSI sells. Each figure names its publisher and date so you can check it yourself.
Three changes shorten the life of a coverage check. From January 1, 2027, expansion adults in most states renew Medicaid every 6 months instead of 12 (CMS, March 2026). For applications on or after that date, their retroactive coverage reaches back 1 month before the month they apply, down from up to 3 (CMS, November 2025).
Marketplace coverage has thinned too. Average Marketplace deductibles rose 37% to $3,786 in 2026, and plan sign-ups fell by over a million to 23.1 million (KFF, May 2026). More insured patients will owe a balance after insurance, and some who dropped coverage will show up as self-pay.
Medicaid renewals and work requirements has the full set of 2027 dates.
| Step | When | What it checks | Who usually owns it |
|---|---|---|---|
| 1. Coverage at registration | At the visit | Medicaid, Medicare, Marketplace and commercial coverage; Medicaid renewal month where the state shares it | Patient access |
| 2. Application help | During the stay or first counseling contact | Whether the patient may qualify for Medicaid; application filed in the month of service or the next | Financial counseling |
| 3. Second coverage check | Before the first statement | New, restored or missed coverage since the visit | Business office or early-out vendor |
| 4. Financial assistance screen | Before any collection step | Eligibility under your financial assistance policy, by application or presumptive scoring | Business office |
| 5. Check at placement | When an account moves to bad debt | Coverage and assistance flags one more time | Bad-debt vendor |
Keep a record of each step: the date, the source checked, the result and who acted on it. That record is what an auditor, a patient or your board will ask to see.
The section 501(r) rules apply to hospital facilities run by tax-exempt hospital organizations. A facility can't start extraordinary collection actions for at least 120 days after it gives the first post-discharge billing statement (26 CFR 1.501(r)-6). The application period for financial assistance runs at least until the 240th day after that statement (26 CFR 1.501(r)-1).
The IRS holds the hospital accountable for the extraordinary collection actions of agencies collecting on its behalf. So your vendor's screening and holds are part of your own compliance record.
Presumptive scoring uses the data already on an account, plus outside data sources, to flag patients likely to qualify for financial assistance without a full application. It's a good way to find people who never applied.
The score should flag and route. A person applies your policy and makes the final decision, and the inputs, score and decision are logged so the call can be checked later.
Stop patient billing on that account and send it back to you with the payer details, so it can be billed to the payer. The account shouldn't return to patient billing until the claim is settled. Log when the coverage was found and how.
In early-out self-pay follow-up, we check eligibility before the first statement, and accounts with coverage go back to you before a patient is billed.
Presumptive charity scoring flags likely financial assistance cases before collection begins. On tax-exempt clients' accounts, we hold collection steps until the 501(r) timelines are met, and we take legal action only with the client's approval.
Coverage findings come back to you through secure files or reports, and each finding is logged.
The early-out and bad-debt vendor RFP has the full list.
Run coverage checks at registration and before the first statement, screen for financial assistance before any collection step, and check once more at placement. Keep a dated record of each step. If you're a tax-exempt hospital, hold extraordinary collection actions for at least 120 days after the first post-discharge statement.
Yes. For applications on or after January 1, 2027, an expansion adult's coverage can reach back only 1 month before the month they apply. Helping a patient apply in the month of service or the next month keeps the visit inside that window. The 1-month limit walks through an example.
Map your current process against the screening sequence above, and mark where coverage checks stop.
Results vary by payer mix and client program.
General information, current as of Nov 5, 2026. It isn't legal advice. Rules change and differ by state, so check the sources linked here and talk to your own counsel before you act on it.
If eligibility denials are eating into your self-pay recovery, the Denials Economics Sprint looks at one payer and one denial class, with defined claim-value bands and a baseline, and returns overturn rate, paid yield, cash, time, human effort, cost per claim, the economic threshold and the expansion case.
