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

2. SLIDING FEE DISCOUNT & RELATED BILLING & COLLECTIONS PROGRAM REQUIREMENTS– PIN 2014-02 2

3. 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!! 3

4. 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 4

5. 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 5

6. 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 6

7. 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 7

8. SCHEDULE OF FEES FOR SERVICES  Developing & maintaining  Can be complex & confusing  More complex the health center = more complex fee analysis process o 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??? 8

9. 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 9

10. 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 10

11. SCHEDULE OF FEES FOR SERVICES  2.Determine actual costs for providing both its required & additional services to patients o Audit o Cost report o 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? 11

12. 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 12

13. 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 13

14. 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 14

15. 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-glasses o Based on cost  Considerations regarding sliding fee discount schedule? 15

16. 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 codes o Changes in reimbursement o Should check for updates at least quarterly 16

17. 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 17

18. SLIDING FEE DISCOUNT SCHEDULE  Awareness of Sliding Fee Discount Schedule  Appropriate for language & literacy levels of patients o Language – Individuals experiencing blindness? Greek? Refer to UDS & languages most spoken by the patients the health center is serving o 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. 18

19. 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 19

20. SLIDING FEE DISCOUNT SCHEDULE  Definitions of Income & Family Size  Income o 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 & IRS o Assets and/or “Net Worth” tests are disallowed in inclusion of calculation of income 20

21. SLIDING FEE DISCOUNT SCHEDULE  Definitions of Income & Family Size  Income o 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 21

22. 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 22

23. 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 23

24. 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 24

25. HOW MANY DISCOUNT PAY CLASSES? 25

26. 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 v alue  Allow patients to participate in supporting cost of service & may prevent inappropriate utilization but is it required? - No 26

27. SLIDING FEE DISCOUNT SCHEDULE  Nominal charges  Nominal from the perspective of the patient o 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 1 st SFDS pay class above 100 % of FPG Challenges with percentage based fee schedules? 27

28. 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 28

29. 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 29

30. 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 30

31. 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 size o 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 31

32. 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? 32

33. 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? 33

34. 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 34

35. 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 35

36. SLIDING FEE DISCOUNT SCHEDULE  How frequently should a health center update the  Sliding Fee discount program o 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 Schedule o Annually with FPG Updates Needs to be board approved  Patient Eligibility: At least annually o Processes for new & existing patients can be different 36

37. 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 37

38. 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 38

39. 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) 39

40. 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. 40

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42. 910 E. St. Louis St. Springfield, MO 65806 David Fields, CPA, CMA, CFM Director dfields@bkd.com Office: 417.865.8701 Fax: 417.865.0682 www.bkd.com 42

43. Some of the content contained in this PowerPoint was extracted from the following source: HRSA BPHC 43

44. 44 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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