Thursday, November 30, 2006

Q. What should be included in a compliant financial hardship policy?
A. Any company that ever writes off a balance or offers a reduced price due to a patient's financial hardship should have a financial hardship policy.
Such a policy accomplishes three things: It protects profit margins, maintains compliance and offers consistency and fairness to patients who have legitimate needs.
* Maintaining compliance with a hardship policy often confuses providers because Medicare only vaguely defines what constitutes a valid hardship. But beware: Routine waivers of co-pays violate the supplier standards. Another taboo practice: Waiving co-pay amounts simply to extract business from a referral source. This violates Medicare guidelines. Not properly pursuing your co-pays and deductibles can result in losing your provider number and financial penalties.
* Consistency and fairness to your patients will never steer you wrong. Imagine if it were your parent who required your services and truly had a legitimate hardship situation. Would you want them to be turned away? Worse yet, what if some patient receives a free service that they could afford? This is not the type of identity you want for your company.
* Protecting profit margin is obvious. With shrinking reimbursement rates, can you really afford not to collect the 20% co-payments whenever possible? That could be your only profit margin on the services you provide. When building your policy, be reasonable. Simply having a form letter stating "I cannot afford to pay my co-pay" and having your patient sign it is not acceptable. You must develop an application and review process that is thorough enough to determine legitimate hardship. Have several criteria for approval. Use poverty guidelines and an evaluation of the patient's incomes and expenses, including other medical bills. Encourage and help patients apply for Medicaid. Also, deductibles should never be approved for write off; these policies apply only to co-pays. hme
Lisa Bargmann is president of Bargmann Management LLC and Homecare Collection Service. Reach her at 440-225-8299 or .