Experience clarity // CPAs & ADVISORS Sliding Fee Discount: PIN 2014-02.

experience clarity //

CPAs & ADVISORS

Sliding Fee Discount: PIN 2014-02

SLIDING FEE DISCOUNT & RELATED BILLING & COLLECTIONS PROGRAM

REQUIREMENTS– PIN 2014-02

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APPLICABILITY OF PIN All health centers funded under Health Center

Program authorized in Section 330 of PHS

Federally Qualified Health Center (FQHC) Look-Alikes

Is PIN applicable to Health Care for the Homeless grantees? – Yes!!

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330 STATUTE REQUIREMENTS Health centers should

Assure no patient will be denied health care services due to inability to pay

Fees or payments required by center for such services will be reduced or waived to enable center is able to fulfill the assurance above

o Sliding Fee Discount Program

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SLIDING FEE DISCOUNT PROGRAM Health centers must establish a “sliding fee discount

program” that includes a “sliding fee discount schedule” that ensures financial barriers to care are minimized for patients who meet certain eligibility criteria

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SLIDING FEE DISCOUNT PROGRAM Comprised of

Schedule of fees for services

Corresponding schedule of discounts for eligible patients adjusted on basis of patient’s ability to pay

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SLIDING FEE DISCOUNT PROGRAM Governing board approved policies & procedures,

including those around billing, collections & waivers or reductions of any fees or payment required by center for services that support fee & discount schedules based on an individuals ability to pay

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SCHEDULE OF FEES FOR SERVICES Developing & maintaining

Can be complex & confusing More complex the health center = more complex fee

analysis processo And then there are the HRSA requirements??

Fee Schedules Philosophy Determine the MAP from payers Set fees above the MAP

o If it were only that easy???

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SCHEDULE OF FEES FOR SERVICES Steps for establishing fee schedule

1. Establish schedule of services that will have a distinct fee

o Should address all in-scope clinical services (required & additional) & be used as basis for third-party reimbursement

• Charge master, fee schedule, etc.o Can include non-clinical services, i.e., enabling as long as they are

typically reimbursed in local market

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SCHEDULE OF FEES FOR SERVICES HRSA FAQ: Can HC’s have a single line for bundled services

(think outside of MCR PPS)? Example – “Diabetes Visit – including Provider encounter, lab-work, mini-session with nutritionalist”

Yes, specific services along with associated laboratory services, and/or medically related supplies & equipment may be combined into a single fee, as long as this is consistent with both prevailing standards of care & locally prevailing charges

What about multiple visits – pre-natal? Yes - not req’d

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SCHEDULE OF FEES FOR SERVICES 2. Determine actual costs for providing both its

required & additional services to patientso Audito Cost reporto Relative value units

• Fees are tied to the assigned value of a procedure Three parts of the value

• Physician work• Time• Risk

• Is information always available?• How does your HC incorporate cost into analysis?

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SCHEDULE OF FEES FOR SERVICES 3. Locally Prevailing Charges

o Reviewing charges for other health care providers in community for same services• Medicare• Commercial Sources, i.e., Optum• Asking Others

Raises legal concerns Does not take into consideration the uniqueness of the health center No assurance of appropriate methodology originally utilized

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SCHEDULE OF FEES FOR SERVICES Health centers should regularly review & adjust their

charges based on analyses of their costs, productivity & local health care market

Need a policy

Analysis should be done annually

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SCHEDULE OF FEES FOR SERVICES Question: What consideration is more important in

developing a fee schedule – cost or locally prevailing charges? Depends on the situation of the health center

o Current emphasis seems to be on cost….• Young organization might use locally prevailing charges while

experienced organization might weight costs more heavily in the calculation

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SCHEDULE OF FEES FOR SERVICES Other considerations for supplies non-incident to

service Pharmaceuticals

o Prescription drugs can be priced at less than locally prevailing rates but charge should be set to cover expense – HC’s do not have to make available on a SFDS

Labs, Supplies & DME – ex. dentures/eye-glasseso Based on cost

Considerations regarding sliding fee discount schedule?

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SCHEDULE OF FEES FOR SERVICES Summary

Developing & maintaining correct fee schedule is crucial Team approach is recommended Health center should assign a knowledgeable employee to

monitor fee schedule updates Consider having a secondary approval

o Addition or deletion of codeso Changes in reimbursemento Should check for updates at least quarterly

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SLIDING FEE DISCOUNT SCHEDULE Enables provision of services are consistently &

appropriately applied to all patients consistent with their ability to pay for such services

Establishment & implementation regarding SFDS should be based on governing board-approved policy that are continually monitored for effectiveness in minimizing financial barriers to care

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SLIDING FEE DISCOUNT SCHEDULE Awareness of Sliding Fee Discount Schedule

Appropriate for language & literacy levels of patientso Language – Individuals experiencing blindness?

• Greek? • Refer to UDS & languages most spoken by the patients the

health center is servingo Literacy levels – Is schedule explained by staff during

initial visit? Should it be? o Schedule must be prominently displayed in health

center – Front desk, bathrooms, brochures, etc.

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SLIDING FEE DISCOUNT SCHEDULE Eligibility for Sliding Fee Discount Schedule

Must based on annual income & family size under DHHS FPG which are adjusted annually for changes in Consumer Price Index

o And no other factors …

• Insurance status?

• Refusal to be assessed = FULL CHARGE

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SLIDING FEE DISCOUNT SCHEDULE Definitions of Income & Family Size

Incomeo Is there standard definition? No. Why?

• Unique characteristics of target populations Homelessness, other considerations

• Service areas High cost of living?

o HC’s can use standard definitions of Census Bureau & IRSo Assets and/or “Net Worth” tests are disallowed in inclusion of

calculation of income

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SLIDING FEE DISCOUNT SCHEDULE Definitions of Income & Family Size

Incomeo Governing board approved policy should also include

documentation needed to assess income• Pay check stubs?• Tax return?• Self declaration?

o Family Size• There is A LOT of flexibility• Can use standard definitions but consideration must be made for

patients being served by the health center

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SLIDING FEE DISCOUNT SCHEDULE Eligibility for Sliding Fee Discounts

Health centers are required to apply a discount to fees charged to uninsured or underinsured with annual incomes above 100% AND at or below 200% of FPG

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SLIDING FEE DISCOUNT SCHEDULE No discounts for families over 200%

Unless…o Health center has access to other funding sources & can allocate

charges to this other funding source (Federal, state, local, etc.?)• Local charities & churches• Ryan White• BCCS (in some states)

o Health center must comply with terms of grantors when using these types of funding sources

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SLIDING FEE DISCOUNT SCHEDULE Sliding Fee Discount Structure

Discount pay classes

o Must have at least three classes above 100 % tied to gradations in income levels

• i.e., lowest income receives highest discount

• Patients between 100% - 200% of FPG should not receive full discount – inconsistent with authorizing regulations of 330 grant program

• Fixed fee or percentage of fee

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HOW MANY DISCOUNT PAY CLASSES?

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SLIDING FEE DISCOUNT SCHEDULE If at or below 100% of FPG, patient should receive full

discount or pay “nominal” charge nominal fee is fixed, small fee that does not reflect true value of a service provided

o % of charge/cost not allowed for nominal charge

o Considered to be of token value

Allow patients to participate in supporting cost of service & may prevent inappropriate utilization but is it required? - No

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SLIDING FEE DISCOUNT SCHEDULE Nominal charges

Nominal from the perspective of the patiento How is this determined?

• Input from patient focus groups?• Patient surveys?• CHC patients on Board of Directors?• Review of Medicare & Medicaid co-payments??

o Can not be more than the fee paid by a patient in the 1st SFDS pay class above 100 % of FPG• Challenges with percentage based fee schedules?

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SLIDING FEE DISCOUNT SCHEDULE Nominal charges

Should not be referred to as minimum fees, minimum charges or co-pays

Not intended to create a payment threshold

Should be reasonably related to patient’s ability to pay

Cannot be set at a level or administered in such a way which would create a barrier to access of care

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SLIDING FEE DISCOUNT SCHEDULE Patients with Third-Party Coverage

Underinsured individuals may not pay more than uninsured patients in same income category

o SFDS charge is the maximum amount an eligible patient in pay class is required to pay for service

• SFDS is applicable to patient fees not covered by third- party payers, i.e., co-insurance, co-payments & deductibles

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SLIDING FEE DISCOUNT SCHEDULE Patients with Third-Party Coverage

Documentation required if SFD’s are limited due to applicable Federal & state laws related Medicare & Medicaid and/or terms & conditions of private payer contracts

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SLIDING FEE DISCOUNT SCHEDULE Medicaid Managed Care considerations

Health center can provide assistance to re-assign or re-enroll patient to the health center

Health center must then assess for income & family sizeo Can you deny services for patients who do not wish to re-assign?o Can health centers require any patient to apply for any insurance

program?• No, health center must serve patient & charge patient in accordance

with Sliding Fee Discount Schedule

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SLIDING FEE DISCOUNT SCHEDULE Multiple SFDS for service categories

Medical, dental (Tier 1 & 3), behavioral health

o SFDS is applicable for required & additional services, clinical or non-clinical

Health centers must ensure written referral arrangements address SFDS & monitor relationships - What are criteria?

Same Sliding Fee Discount Schedule required?

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SLIDING FEE DISCOUNT SCHEDULE Supplies & services “incident to” service (supplies for

cast when setting bone)

Single fee should be charge for service inclusive of associated supplies/materials

Related charges “not incident to” service (eyeglasses, dentures, pharmaceuticals)

Not required to apply SFDS but should be noted

o How should HC’s price these supplies?

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SLIDING FEE DISCOUNT SCHEDULE

Health center staff may not independently waive charges for a patient Provisions for waiving charges that identify circumstances

with specific criteria for when charges will be waived must be board approved & identify staff with authority

Policies must be applied to all patients equally

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SLIDING FEE DISCOUNT SCHEDULE Policies should be applied consistently & uniformly to

all patients

Grace periods or self declaration

Emergency fees or discounts/waivers

Temporary eligibility – insurance coverage waiting periods

Frequency of re-evaluation of patient eligibility

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SLIDING FEE DISCOUNT SCHEDULE How frequently should a health center update the

Sliding Fee discount programo Analyze at least every three years from the perspective of the

patient & reducing financial barriers to care • Patient Surveys? Discussions with consumer board members?

SFD Scheduleo Annually with FPG Updates

• Needs to be board approved Patient Eligibility: At least annually

o Processes for new & existing patients can be different

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BILLING & COLLECTIONS Health centers are required to maximize revenue

from public & private third-party payers & participate in the following

Medicare

Medicaid

CHIP (if applicable)

Private & other health insurance programs

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BILLING & COLLECTIONS Health centers are required to make reasonable

efforts to collect from third-party payers & patients

Billing & collections should be done in a efficient, respectful, culturally appropriate manner

Payment plans can be made available to patients

Billing fees are not allowable if patients are under 200% of FPG

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BILLING & COLLECTIONS Health centers can not turn away patients with third-party

insurance

Health centers can not require patients to enroll in Medicaid/Medicare. If a patient chooses not to enroll, a health center should put the patient on the SFDS if the patient is eligible

Payment incentives for prompt payment may be offered to patients if accessible to all patients (including those below 200% of FPG receiving SFDS)

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BILLING & COLLECTIONS Refusal to pay

Established policies should define “refusal to pay” & steps to be followed

Patient discharge should be reviewed as last resort & re-admittance policy should also be in place

Collection efforts/enforcement steps should be taken first

o Grace periods, payment plans, meetings with financial counselor, etc.

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910 E. St. Louis St.

Springfield, MO 65806

David Fields, CPA, CMA, [email protected]

Office: 417.865.8701Fax: 417.865.0682www.bkd.com

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Some of the content contained in this PowerPoint was extracted from the following source:

HRSA BPHC

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The information in BKD seminars is presented by BKD professionals, but applying specific information to your situation requires careful consideration of facts & circumstances. Consult your BKD advisor before acting on any matters covered in these seminars.

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