operationalizing hrsa’s sliding€¦ · –can combine certain services into single fee (such as...

Marcie H. Zakheim

Partner

Operationalizing HRSA’s Sliding

Fee Discount Program

Requirements

© 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. |

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DISCLAIMER

This training has been prepared by the attorneys of Feldesman Tucker Leifer Fidell LLP. The opinions expressed in these materials are solely their views and not the views of any other organization.

The materials are being issued with the understanding that the authors are not engaged in rendering legal, financial or other professional services. If legal or financial advice or other expert assistance is required, the services of a competent professional should be sought.


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PRESENTER: MARCIE ZAKHEIM

• Partner at Feldesman Tucker Leifer Fidell, specializing in, among other things, federal grants and grant-related requirements (in particular the requirements of and related to Section 330 of the Public Health Service Act) and nonprofit corporation law;

• Counsel to National Association of Community Health Centers, and numerous Primary Care Associations and health centers nationwide for 18 years; and

• Provides advice and technical assistance services on compliance with federal rules and requirements related to the operation, administration and governance of health centers and health center consortia; assists with development of federal grant applications; and analyzes and provides comments/advice on legislation, regulations and policies impacting health centers and the health care industry in general.

• Contact Information: [email protected] or 202.466.8960

mailto:[email protected]


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AGENDA

I. Overview and Introduction

II. Establishing Your Fee Schedule

III. Establishing Your Sliding Fee Discount

Schedule

IV. Show Me the Money – Establishing Your

Billing and Collection Policies


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Overview & Introduction


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WHERE DO THESE RULES COME

FROM?

• Health center statute [42 USC §254b(k)(3)(F) & G] and regulations [42 CFR §51c.303(f) & (g)]

– Schedule of fees consistent with locally prevailing

rates or charges and designed to cover reasonable

costs of operation

– Corresponding schedule of discounts

• Adjusted on the basis of the patient's ability to pay

• Full discount for individuals and families with annual incomes

at or below 100% of Federal Poverty Guidelines (nominal fee

as long as it is consistent with project goals)

• No discount for individuals and families with annual incomes

more than than twice FPG (i.e., greater than 200%)


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WHERE DO THESE RULES COME

FROM?

• Health center statute [42 USC §254b(k)(3)(F) & G] and regulations [42 CFR §51c.303(f) & (g)]

– Reasonable efforts (including systems for eligibility

determination, billing and collection) to collect:

• Payments from patients in accordance with fee and discount

schedules; and

• Appropriate reimbursement under Medicare, Medicaid, CHIP

and any other public assistance program or private health

insurance program without application of discounts

– Assure no patient will be denied health care services

due to an individual's inability to pay and reduce or

waive fees as necessary to ensure such access


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SFDP POLICY

• Final PIN 2014-02 issued September 22, 2014 – was effective upon issuance

– Primary resource for HRSA’s sliding fee discount

program (SFDP) policy, superseding all prior

guidance on the same subject

• Does not supersede billing requirements under

Medicaid, Medicare or other programs (including other

grant programs)

• Does not supersede any requirements specified in

applicable Funding Opportunity Announcements or

Notices of Awards


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SFDP POLICY

• Applies to all Section 330-funded health centers (including sub-recipients and special population only grantees) as well as FQHC look-alike entities, and to all patients served by the health center – Can consider target population’s unique

characteristics and specific barriers to care in establishing and evaluating operating procedures

– What’s the difference?? – policy reflects the board’s priorities and direction and procedure is how the policy is implemented

• Applies only to activities provided within the health center’s scope of project


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SFDP POLICY

• Main goal = improve access by minimizing financial barriers to care – BUT also have to maximize revenue – balance is key!

• SFDP is a total program with several elements including

– Structure of the fee and discount schedule, and nominal

fee

– Process to determine eligibility for the SFDP

– Application of SFDP to in-scope services, referral

arrangements, and service-related supplies and equipment

– Billing and collection policies (including reductions to

patient cost-sharing) – as applicable, payment incentive

policies and policies to discharge of patients for refusal to

pay


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DISTINCTION FROM PREVIOUS

GUIDANCE • Beyond basic structural requirements, SFDP

policy affords health centers a lot of flexibility to determine what’s best for the center and its patients and community

• CAUTION – with greater flexibility comes greater responsibility / accountability!!! – Document all decision-making

– Always be able to demonstrate that choices / decisions maintain/further patient access and do not result in barriers to care

– Involve the board to greatest extent possible


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OPERATIONAL IMPLICATIONS

• Increases depth and breadth of policies and procedures and expands level of detail

• Requires greater level of coordination among various health center functional areas (finance, administration, front desk operations)

• Potential practice management system limitations and configuration hurdles (interfaces, EMR templates)

• Must ensure appropriate training for providers and coders to accurately capture “visit”

• Increased staffing and/or enhanced systems?? Increased costs??


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IT ALL STARTS WITH THE BOARD

• Full board approval (and periodic review) of all required SFDP policies is primary mechanism to ensure that the SFDP remains patient centered, improves access to care and assures that no patient is denied services due to inability to pay – Eligibility criteria, including definitions of

family/income and frequency of re-evaluation

– Documentation and verification requirements

– Structure of the Sliding Fee Discount Schedule (SFDS) and as applicable, nominal fee

– Billing and collection policies

– Policies to waive/reduce fees


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IT ALL STARTS WITH THE BOARD

• Board does not have to approve supporting operating procedures that implement these policies, but should get feedback as part of the board’s evaluation responsibility

• Board should review evaluations of the SFDP (e.g., patient satisfaction surveys, focus groups, collection rates) and update policies or direct the CEO as appropriate


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Establishing Your Fee

Schedule


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STRUCTURE OF THE FEE

SCHEDULE

• Fee schedule must address all in-scope services (required and additional) and be used as the basis for seeking payment from patients as well as third party payers

• Fees must be set to cover reasonable costs and must be consistent with locally prevailing rates or charges for the service

– Key question – how do we do balance both?


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HOW TO DEVELOP YOUR FEE

SCHEDULE

• Step #1: Determine services that will have distinct fees – Can combine certain services into single fee

(such as services with related supplies, lab), if consistent with prevailing standards of care

– Can use global fee for services that require multiple visits (such as prenatal care)

– May include distinct fees for non-service in-scope elements (such as outreach) if they are typically reimbursed separately

– Third Party and Commercial Payers – review contracts and set charge schedule to align with costs mindful of contract reimbursement terms


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HOW TO DEVELOP YOUR FEE

SCHEDULE

• Step #2: Determine actual costs of providing required and additional services included in scope

• Step #3: Consider “locally prevailing rates” for these services – Look at charges of other community providers for

the same or similar services (can use similarly situated communities if no comparable providers in center’s community)

– Sources may include Medicare, Medicaid, private providers, or commercial sources

– Document that you have conducted this review!


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COSTS V. PREVAILING CHARGES

• Relative weight given to reasonable costs and locally prevailing charges may vary depending on the situation of the health center – For example, new health centers may rely

more heavily on locally prevailing charges until they have a reliable determination of their own actual costs of operations

– On the other hand, if prevailing charges/rates are lower than costs, to remain competitive may need to put greater weight on prevailing rates than costs


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COSTS V. PREVAILING CHARGES

• General “rule of thumb”: except under exceptional circumstances, should always look at and try to cover costs first

– All health centers must adjust fees, as appropriate, based on regular cost analyses, as well as changes in the local health care market

– Be creative – may be able to bundle certain services to balance costs and competition


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Establishing Your Sliding

Fee Discount Schedule


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SLIDING FEE DISCOUNT SCHEDULE

• After developing fee schedule, time to establish the sliding fee discount schedule (SFDS) based on ability to pay – Purpose – to address financial barriers (as

opposed to fee schedule, which covers costs)

– Goal – ensure that uniform and reasonable fees and discounts are consistently applied to all patients

– Frequency – should be reviewed/revised at least annually to reflect annual update to the Federal Poverty Guidelines (FPG) and to ensure effectiveness


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STRUCTURE OF THE SFDS

• SFDS must have at least three discount pay classes between 101% - 200% of Federal Poverty Level (FPL) that are tied to “gradations” in income levels – Flexibility to determine number of pay classes

and types of discounts (i.e., can be % of fee or flat / fixed fee for each class) as long as not barrier to care

– If using different SFDS for distinct types/categories of services (e,g,, medical, behavioral health, dental), can have different # of pay classes / types of discounts for each

– Multiple SFDS among different sites? NO


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STRUCTURE OF THE SFDS

• No discounts for patients with annual incomes above 200% FPL

– If receiving non-330 funds that require discounts above 200%, may reduce patient payments accordingly and apply those other funds to make the center “whole”

– Query – what if the terms and conditions of other funds do not require discounts above 200%?

– Query – what about excess program income? Can you use EPI to subsidize care?


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STRUCTURE OF NOMINAL FEE

• No more than a nominal fee for patients at or below 100% FPG

– Nominal fee is not required – requirement is full discount but health center board can elect to charge nominal fee if not a barrier to care

– Nominal fee must be less than the fee paid by patient in lowest rung of SFDS


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STRUCTURE OF NOMINAL FEE

• Nominal is defined as a flat fee that does not reflect the true value of the service and is considered “nominal” from patients’ perspective – examples include – Patient surveys

– Patient board members

– Co-payments for public insurance program for low income individuals

• Nominal fee is not a payment threshold, minimum charge/fee or co-payment – language matters (do not refer to “minimum fee” in policy/procedure)


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ELIGIBILITY VERIFICATION

• Income and family size are the sole factors in determining eligibility for SFDP – no exceptions! – Must assess all patients (need this for UDS purposes)

– Cannot consider other factors (such as insurance status or population type) in eligibility determination,

– BUT can consider unique characteristics of target population (e.g., HCH) and service area (e.g., high cost of living) in developing supporting operating policies and procedures

– Cannot use asset or “net worth” (combining assets and income) tests


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• Board must define “income” and “family size” and the necessary documentation – include definitions in SFDP policy – Flexibility, as long as no barrier to care

– “Income” can be defined using / adapting definitions from other sources, such as Census Bureau, IRS, other federal programs

– “Family size” can include individuals not living with patient but supported by patient’s income

– Self-declaration? • Can have full self-attestation (no limitations) v. partial self-

attestation (only good for first visit) v. no self-attestation

• Up to individual health center and its board


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• Cannot require patient to apply and be turned down for insurance or related third party coverage before offering SFDP

• HOWEVER, If a patient is informed about availability of SFDS and chooses not to provide required eligibility verification information, may charge the patient full fee


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• Process must be efficient, respectful and culturally appropriate – eligibility verification process should not present a barrier – How much information do we need on the eligibility

verification form?

– Should we ask for social security # and/or insurance status? Why?

– When in doubt – simplify!

– And always document the process and assess periodically for compliance and effectiveness

• Patient’s eligibility should be updated at least annually or when patient’s circumstances change, whichever comes first


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SERVICES WITHIN SCOPE OF

PROJECT • Applies to all services furnished within scope

of project for which a charge has been established – All required and additional services listed on

Form 5A in any column (I, II, and III)

– Type of service or mode of delivery is irrelevant for application of the SFDP, provided that the service is in-scope

• Can have different SFDS / nominal fees for distinct services/modes of delivery, as long as each meets structural requirements and is applied uniformly to similarly situated patients


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REFERRAL ARRANGEMENTS

• Services provided through in-scope referral

arrangements (Form 5A, Column III)

– Must be offered based on discount schedule

consistent with SFDS / nominal fee

OR

– Health center supports the cost of care by paying

the referral provider the difference between the

provider’s charge and what the patients should

pay under discount schedule


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• Referral providers’ SFDS does not have to

mirror the center’s SFDS, provided that it:

– Meets the structural requirements in the PIN

– Is applied uniformly to similarly situated patients

– Takes into consideration patient access

• Referral provider can offer deeper discounts

DOES NOT APPLY TO REFERRAL ARRANGEMENTS NOT LISTED ON FORM 5A


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• Outstanding questions:

– In meet the “structural requirements” in the PIN, does the referral provider’s SFDS have to include at least 3 tiers, etc., or just conform to eligibility requirements set forth in regulation?

– What about referral providers with their own charity care / indigent care policies – if those policies apply equally to all individuals earning incomes at or below 200% FPL, is that sufficient?

– Same as above only the charity care policy is established by State law (such as indigent care pools) …?


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SERVICE-RELATED SUPPLIES &

EQUIPMENT

• Service-related supplies and equipment charged separate from the underlying service (e.g., dentures, crowns) can be discounted under a structure different from SFDP – Applies to supplies and equipment related to but not

included in the underlying service as part of prevailing standards of care

– Does not apply to general diagnostic lab services – only lab charges associated with supplies/equipment

– Charge should be less than prevailing charge (should offer some discount), but can be higher than normal discount (such as recoupment of costs)


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SERVICE-RELATED SUPPLIES &

EQUIPMENT

• Service-related supplies and equipment (cont.)

– Should include availability of waivers / payment reductions / payment plans to ensure access (even if requiring a portion of payment in advance of service)

– Must inform patient prior to providing service that the supplies / equipment will be charged separately and what that charge will be (and if payment plans are available, what those are)


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SERVICE-RELATED SUPPLIES & EQUIPMENT:

RESTORATIVE DENTAL EXAMPLE

• Professional services charged based on “regular” SFDS and nominal fee for that service – SFDS and nominal fee can be different from medical

services and preventive dental services as long as they meet all structural requirements, are applied to all patients uniformly, and do not create barriers to care

• Supplies/equipment (dentures, crowns) can be charged based on cost recoupment – Price should reflect a discount from locally prevailing

charges

– Must establish procedures to reduce payments or provide payment plans as necessary to ensure access

– Query – can you require payment in advance of service? (see billing and collection slides)


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Show Me the Money:

Billing and Collection

Policies


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BILLING AND COLLECTION

POLICIES

• Must maximize revenue from public and private third party payers – must make every reasonable effort to collect such payments without application of discounts

– Must fully charge all third-party payors

– Cannot require patients to enroll in insurance – but educate them of benefits!!

– Ensure compliance with FQHC Medicare and Medicaid guidelines and maximizing rates


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POLICIES

• Must make reasonable efforts to bill and collect payments from patients

– Billing and collection policies and procedures cannot become barrier to care or result in denial of care due to inability to pay

– “Reasonable efforts” may vary based on elements unique to the health center (such as its target population and location)

• General community versus transient populations

• Rural / sparsely populated versus city / urban


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POLICIES • Collection procedures can include

– Encouraging up-front payment (partial or for costs of supplies / equipment, full) at time of service (but cannot deny care if patient does not have payment at time of service)

– Follow-up letters and phone calls

– Requiring patients with overdue balances to speak with financial counselor prior to next visit (as long as care is not denied)

– Establishing grace periods and / or payment plans

• Query – should collection procedures be different for nominal fee patients??


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PATIENT COST-SHARING

• Patients in plans with high deductible and co-pay

that were previously uninsured and meet poverty

guidelines – what kind of discount should you offer?

• Not required to offer full slide to insured patients;

however, if patient cost-sharing amount is more than

he/she would have paid as an uninsured individual

(based on his/her SFDS pay class), at a minimum,

must reduce cost-sharing amount to applicable

SFDS pay class amount (subject to legal/contractual

limitations)


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• Permitted but not required to:

– Discount if cost-sharing does not exceed

SFDS pay class

– Apply a full slide to cost-sharing

Provided that all similarly situated

patients are treated uniformly


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• Example:

– Patient X has a co-payment of $50

– The fee schedule indicates that the charge for the

service received by Patient X is $100

– Based on eligibility process, Patient X would

qualify for SFDP and Patient X’s SFDS pay class

would provide for 75% discount (in this case,

$100 - $75 = $25 payment)

– Since Patient X’s payment under SFDS would be

$25, at a minimum, co-payment must be reduced

to $25 (subject to contractual / legal limitations)


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• Outstanding questions

– If a particular plan prohibits discounting cost-sharing, can you offer discounts on the cost-sharing amounts charged by other plans? How is this fair?

– How do account for this discount? Is it included under SFDS amounts or other adjustments?

– Does your current practice management system have the capacity for these determinations?

– Can you use EPI or other funds to subsidize cost-sharing for patients earing above 200% FPL?


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WAIVING PATIENT CHARGES

• Must establish board-approved policies and procedures that identify circumstances to waive or reduce fees to ensure access – Must apply consistently and uniformly based on the

defined objective criteria (such as documentation of financial need that does not fit into the SFDS)

– To avoid inconsistency and arbitrary decision, define who has authority to make determinations and do not deviate

– Apply to patient balances under both SFDP and full fee (no distinction)


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PAYMENT INCENTIVES

• May establish board-approved policies to incentive payment (such as cash/prompt pay discounts)

– Must be available to all patients equally regardless of SFDS pay class

– Query – does this include patients charged based on SFDS / nominal fee?

• PIN indicates “yes” … need further clarification


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DISCHARGING PATIENTS

• May discharge patients for refusal to pay only after reasonable efforts have been made to secure payments and/or bill for amounts owed to the health center for services provided – must establish – What constitutes refusal to pay – objective criteria

only and “appearances” should not count – Individual considerations in making such

determinations – Collection efforts to be taken, including grace

periods, payment plans, meetings with financial counselors – and document all such efforts

• Board must approve patient discharge policies


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DISCHARGING PATIENTS

• May establish related policies for determining how and when patients may be permitted to rejoin the regular practice at a future date

• Remember to consult private counsel regarding state requirements (such as patient abandonment laws) and other obligations (contracts, professional licensure) that may arise

PATIENT DISCHARGE SHOULD BE LAST RESORT!


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Marcie H. Zakheim, Esq.

[email protected]

Feldesman Tucker Leifer Fidell LLP

1129 20th Street N.W. – Suite 400

Washington, D.C. 20036

(202) 466-8960

www.ftlf.com

mailto:[email protected]

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