# Financial hardship



## ERINM (Jun 16, 2010)

Anyone know where I can find information on state or federal laws regarding Private and Medicare insured patients and our office performing financial hardship write offs? Or is it legal to charge the insured patient a cash price for services that would otherwise be to costly if billed to their insurance(due to the patient's high copay/coinsurance, etc)?


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## RebeccaWoodward* (Jun 16, 2010)

*80.8.1* -Waiver of Deductible and Coinsurance
(Rev. 1, 10-01-03)
B3-5220

Physicians or suppliers who routinely waive the collection of deductible or coinsurance from a beneficiary constitute a violation of the law pertaining to false claims and kickbacks. These situations should be referred to Program Integrity area for additional investigation according to the procedures in the Medicare Program Integrity Manual.
Deductible and coinsurance amounts are taken into account (included) in determining the reasonable charge for a service or item. In this regard, a billed amount that is not reasonably related to an expectation of payment is not considered the “actual” charge for the purpose of processing a claim or for the purpose of determining customary charges.
Where a physician/supplier makes a reasonable collection effort for the payment of coinsurance/deductibles, failure to collect payment is not considered a reduction in the physician's/supplier's charge. To be considered a reasonable collection effort, the effort to collect Medicare coinsurance/deductible amounts must be similar to the effort made to collect comparable amounts from non-Medicare patients. It must also involve the issuance of a bill to the beneficiary or to the party responsible for the patient's personal financial obligations. In addition, it may include other actions, such as subsequent billings, collection letters and telephone calls or personal contacts which constitute a genuine, rather than token, collection effort.

http://www.cms.gov/manuals/downloads/clm104c23.pdf

Additional comments from my local Medicare carrier:

"Where a physician/supplier makes a* reasonable *collection effort for the payment of coinsurance/deductibles, failure to collect payment is not considered a reduction in the physician's/supplier's charge. Physicians or suppliers who routinely waive the collection of deductible or coinsurance from a beneficiary constitute a violation of the law pertaining to false claims and kickbacks. When Medicare becomes aware that a provider routinely and consistently waives the collection of coinsurance or deductible amounts from or on the behalf of Medicare beneficiaries, we are required to review the circumstances to determine whether this constitutes a reduction of the provider's actual charges."


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## cyndeew (Jul 26, 2010)

You can indeed, waive charges for patients that have a financial hardship. You must document it, though.

First, you should review information about the 2010/2009 Federal Poverty Guidelines at http://www.workworld.org/wwwebhelp/pover...ederal.htm This basically gives you the income breakdown based on number of dependents. You can apply your own guidelines, say 20% above poverty, as long as you apply the same standards to all patients.

You could use a form such as this to document the hardship:

*APPLICATION FOR REDUCTION OF BILL OR EXTENDED PAYMENT PLAN*

​Patient Name:_________________________ 
Guarantor Name:____________________
Address:____________________________________________________________
Telephone:____________________________ 
Health Insurance: ________________
Patient Date of Birth:______________________

Gross Monthly Income:
Monthly Household Expenses:



Self:
______________________
Mortgage/Rent:
________________



Insurance: 
________________

Spouse:
______________________
Utilities: 
________________



Car Payment: 
________________

Other:
______________________
Food: 
________________



Medical: 
________________

Total:
______________________
Total: 
________________


Number of Dependents in Household (Including self): ________________

Medical Expenses:
Providers:
Amount Due:
__________________
__________________
__________________
__________________
__________________
__________________


Patient or Guarantor Signature:_________________________________ Date:________
Final approval will require a copy of your most recent income tax form accompanied by supporting W-2/ 1099/ SSA 1099 statements. If you do not file a tax return or if you have had significant financial changes, please explain on the reverse side of this form. Please return this form and all attachments to the attention of the Practice Manager at the address listed on this form. We appreciate the opportunity to work with you to resolve this outstanding balance.

As long as you don't "routinely" apply a hardship to everyone, then you shouldn't have any problems - hardships are meant for those that truly do not have the ability to pay. Just because someone doesn't pay doesn't mean they don't have the ability to pay. 

The OIG has said that if it is a true documented hardship, then it's okay to waive charges and you do not have to make a good faith effort to collect the money first.


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## sdeaton (Aug 24, 2010)

An update to HIPAA Privacy Rule resulting from last year's HITECH legislation gives the patient the right to request non-disclosure to his/her health plan for items/services paid for in full (out of pocket) by patient.  This became effective 2/17/2010.


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## cyndeew (Aug 25, 2010)

Susan - can you send me info on this? Thank you!


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## sdeaton (Sep 17, 2010)

Sorry Cyndee,

I haven't been in the forums since I posted this.  I'll send to you via email over the weekend.


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## cyndeew (Sep 21, 2010)

Thank you, Susan!


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