Practice Management Alert

Your collections efforts are an area that can come under scrutiny by the HHS Office of Inspector General.
 
The implication of an OIG guidance issued Feb. 19 is that you should outline your standard collections procedures as part of your office policy on discounts, write-offs and waivers, says Wayne J. Miller, an attorney with Los Angeles-based Compliance Law Group. Although the guidance responds to an inquiry by the hospital industry, the OIG makes many points that are "clearly applicable" to providers in all settings, Miller says.

Use your own discretion: OIG guidance indicates providers are free to implement whatever policy they choose on charity care, discounts, write-offs and collections, as long as it's applied consistently and the reasons for granting these are documented. Therefore, your practice can determine what qualifies a patient for assistance due to financial hardship based on what works best for you. The OIG specifies that "under the fraud and abuse laws, the 'financial need' criterion ... can include any reasonable measures of financial hardship." You need to give waivers or discounts to financially needy patients, and make sure that the charity is not tied to or conditioned upon referrals or use of your services. Also, you should document your efforts to determine a patient meets your criteria as being needy, Miller says.

In addition: The guidance states "no OIG rule or regulation requires a [provider] to engage in any particular collection practices." This means that, if you want to, your practice can agree in advance to accept patients who ask and qualify for "charity care." Your practice can also choose to engage in minimum collection efforts and then waive the obligations of patients who you find have financial need in accordance with your policy, while trying to collect more aggressively from other patients who are not financially needy, Miller says.

Always: Be sure to indicate in your policy the minimum effort you will apply in collecting debts, and make sure that effort is made across the board for all non-charity care patients, Miller says. A minimum collection effort could be as simple as one letter or phone call, he adds. Other than that, the law allows you to define your collections procedures as you please, just as long as they're done consistently in accordance with your written policy.

To read the full guidance, visit
www.oig.hhs.gov/fraud/docs/alertsandbulletins/2004/FA021904hospitaldiscounts.pdf or www.cms.hhs.gov/FAQ_Uninsured.pdf.