Find the Right Balance
Too many home medical equipment companies still confess to me that they do not put much effort into seeking copays and deductibles from customers. With competitive bidding and other reimbursement programs belt-tightening, reducing the profit margin on many items of DME as well as services and supplies, it is more important than ever to implement efficient and effective procedures to maximize collection of all monies due.
I suspect one reason some companies fail to pursue these payments is because they perceive that customers will not utilize their services if they are forced to make copay or deductible payments. I question the accuracy of this perception. Many customers will complain about payment, and some of them may require repeat efforts for collection. But I am dubious that many customers would actually switch providers, particularly in those markets subject to competitive bidding.
Moreover, the routine waiver of federal program copayments and deductibles can land HME companies in hot water, the HHS Office of Inspector General signaled in a 1999 advisory opinion. Opinion No. 99-6 scrutinized the waiver of copays by a hospital and its affiliates, and the message of the opinion should ring loudly for all home care companies.
“Where remuneration is paid purposefully to induce referrals of items or services paid for by a federal health care program, the anti-kickback statue is violated,” warned the OIG. “Waivers of federal health care program coinsurance and deductible amounts implicate the anti-kickback statue because such waivers may constitute an inducement to customers to use services in exchange for something of value, i.e., the forgiveness of a financial obligation.”
This message is not new. The OIG told providers in a Special Fraud Alert back in 1991 that “providers who routinely waive Medicare Part B coinsurance and deductibles may be held liable under the anti-kickback statue.” The absence of these payment amounts make customers “less conscientious,” causing them to select services because they are free rather then medically necessary.
This warning doesn't mean you must give up waiving copays and deductibles altogether. It isn't a problem to waive copays if you establish and document the customer's financial hardship. But waivers must not be determined by using generalizations, such as discounting or waiving copays and deductibles a certain percentage across the board because that is the percentage of “hardship cases” the company handles. Nor may it be used whenever a customer pleads poverty, nor whenever a customer fails to respond to the first billing invoice. Waivers must be determined on a case-by-case basis.
Also, documentation of the financial troubles must be more concrete than just labeling cases as a “hardship” if the patients have trouble paying. You should create a form to determine patients' eligibility for waivers by requesting their income and expenses information, plus any unusual financial circumstances. Be sure that the form contains a sworn statement clause that requires the customer to supply true information.
In fact, Medicare has specific rules detailing what must be done to establish hardship. These rules are straightforward and, in my opinion, not unfair. If a Medicare customer wants to claim financial hardship, he or she should be prepared to offer information to support that contention. I even recommend that an HME supplier adopt the Medicare rules for all customers.
Regardless, if a federal beneficiary will not comply with these requirements, copays and deductibles should not be waived. If your company nonetheless offers waivers to these customers, well, just watch your back. At some point the feds will be heading your way.
I often advise gathering even more information about a hardship customer's financial status. I agree that HME companies tread a fine line between offering assistance with waivers and intruding on patients' lives and making the process of getting equipment or services too taxing. It is important to find the right balance.
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