Medicare Compliance & Reimbursement

HHS offers guidance, but hospitals still unclear on some points.

Hospitals hoping for the Department of Health and Human Services to signal a definitive path through the murky regulatory terrain surrounding the billing of uninsured patients now have some guidance from HHS Secretary Tommy Thompson.

Thompson on Feb. 19 responded to a request from American Hospital Association president Dick Davidson to help lift the "string of barriers" HHS has in place that make reducing charges incurred by uninsured and underinsured patients a tricky legal tightrope that few hospitals risk walking. The result, Davidson says, is poor patients saddled with astronomical charges not even powerful insurance carriers have to pay.

"That suggestion is not correct and certainly does not accurately reflect my policy," Thompson retorts. "The advice you have been given ... is not consistent with my understanding of Medicare's billing rules."

A related summary released by the HHS Office of Inspector General Feb. 2 clarifies existing policy -- but it's possible that clearer regulations may be the only measure that will ease hospitals' confusion.

Here are some key points from the OIG : The federal anti-kickback statute does not prohibit discounts or waivers to uninsured patients who are unable to pay their hospital bills, as long as the discounts are not intended to generate business. Provisions in the Social Security Act that allow the OIG to exclude providers and suppliers for submitting claims substantially higher than their "usual charges" do not apply to discounts given to uninsured or underinsured patients. In fact, according to upcoming regulations, providers need not consider free or reduced charges to uninsured patients when calculating their "usual charges." Despite misperceptions, the OIG does not require vigorous collection efforts against uninsured patients for unpaid bills.

Waivers of all or portions of Medicare cost-sharing amounts, as well as waivers of deductibles or coinsurance, are permitted with some exceptions, for all patients who demonstrate any reasonable measure of financial hardship.

"The OIG has never brought a case based on a hospital's bona fide discounting of its bill for an uninsured underinsured patient," the summary reads. To see the complete policy summary, go to http://oig.hhs.gov/fraud/docs/alertsandbulletins/2004/FA021904hospitaldiscounts.pdf. To see a related Centers for Medicare & Medicaid Services frequently asked questions document, go to www.cms.hhs.gov/FAQ_Uninsured.pdf. Lesson Learned: As the issue of the uninsured gains traction during the election year, now is the time to re-examine policies.