MERCY MEDICAL CENTER CLINTON POLICY AND PROCEDURE GUIDE. CLASSIFICATION 7 pages DIRECTOR SIGNATURE. REVIEWED BY: Lisa Rogers

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1 MERCY MEDICAL CENTER CLINTON POLICY AND PROCEDURE GUIDE TITLE: POLICY: C - 5 May 2, 2012 April 11, 2012 February 29, 2012 February 3, 2012 November 21, 2011 October 30, 2009 June 28, 2011 January 20, 2011 October 1, 2010 April 2, 2010 CLASSIFICATION 7 pages DIRECTOR SIGNATURE REVIEWED BY: Lisa Rogers SUPERSEDES DATE: October 20, 2009 July 2, 2009 January 23, 2009 January 23, 2008 July 1, 2007 January 24, 2007 September 6, 2006 August 24, 2006 January 24, 2006 EFFECTIVE DATE: April 15, 2013 REVIEWED DATE: January 30, 2013 January 19, 2012 May 9, 2005 March 3, 2005 January 28, 2005 July 1, 2004 January 1, 1998 December 1, 1994 PURPOSE: Approximately forty-five million Americans lack basic health care coverage. In addition to the large number of uninsured, the number of underinsured has increased over the last decade. Studies have shown a strong link between lack of adequate health insurance coverage to inadequate health care received by individuals. Mercy Medical Center-Clinton is committed to: Providing access to quality healthcare services with compassion, dignity and respect for those we serve, particularly the poor and the underserved in our communities; Caring for all persons, regardless of their ability to pay for services; Assisting patients who cannot pay for part or all of the care they receive; Balancing needed financial assistance for some patients with broader fiscal responsibilities in order to sustain viability and provide the quality and quantity of services for all who may need care in a community.

2 Page 2 of 7 PROCEDURE: I. Assisting Patients Who May Qualify for Coverage A. Mercy Medical Center-Clinton will make affirmative efforts to help patients apply for public and private programs for which they may qualify and that may assist them in obtaining and paying for healthcare services. B. Mercy Medical Center-Clinton will have understandable, written procedures to help patients determine if they qualify for public assistance programs or hospital-based assistance programs. II. Affordability of Care for Patients with Limited Means Mercy Medical Center-Clinton will establish and maintain a policy to address the financial needs of all patients regardless of race, creed, sex, or age. Eligibility for assistance will be determined on an individual basis using specific criteria and evaluated on an assessment of the patient s and/or family s need, financial resources and obligations. A. Services eligible for financial support i. All medically necessary services, including medical and support services provided by Mercy Medical Center-Clinton, will be eligible for financial support. ii. Trauma and emergency care services will be provided to all patients, regardless of the patient s ability to pay. Such care will continue until the patient s condition has been stabilized prior to any determination of payment arrangements. B. Services not eligible for financial support i. Cosmetic services and other elective procedures not medically necessary will not be eligible for financial support. ii. Services not provided or billed by Mercy Medical Center-Clinton (e.g. independent physician services, ambulance transport, etc.) are not covered by this policy. iii. Deductible, co-pay and coinsurance amounts are not eligible for financial support unless the patient's financial circumstances meet the definition of medical indigency defined in this policy. iv. As provided in section I. Mercy Medical Center-Clinton will make affirmative efforts to help patients apply for public and private programs. Mercy Medical Center-Clinton may deny financial support to those individuals who do not cooperate in applying for programs that may pay for their healthcare services. v. Mercy Medical Center-Clinton may exclude services that are covered by an insurance program at another provider location but are not covered at Mercy Medical Center-Clinton after efforts are made to educate the patients and provided that EMTALA obligations are satisfied. C. Residency requirements

3 Page 3 of 7 i. Mercy Medical Center-Clinton will provide financial support to patients who qualify for the program and who reside within their service areas. ii. Mercy Medical Center-Clinton has identified the service area to include some counties in Iowa. Eligibility will be determined using the patient's zip code. iii. Mercy Medical Center-Clinton will provide financial support to patients from outside the service area who qualify for the program and who present with an urgent, emergent or life-threatening condition. iv. Mercy Medical Center-Clinton will provide financial support to patients identified as needing service by physician foreign mission programs conducted by active medical staff for which prior approval has been obtained. D. Establishing patient income i. Mercy Medical Center-Clinton will utilize an assessment process for the purpose of evaluating the patient s financial resources. ii. Information provided to Mercy Medical Center-Clinton by the patient and/or family should include earned income, including monthly gross wages, salary and self-employment income; unearned income including alimony, child support, retirement benefits, dividends, interest and income from any other source; number of dependents in household; number of dependents in household based on the Federal tax return; and other information to determine the patient s financial status, including assets and liabilities. E. Documentation for Establishing Income i. As defined by Mercy Medical Center-Clinton s policy, supporting documents such as payroll stubs, tax returns, credit history may be requested to support information reported and shall be maintained with the completed assessment. ii. Mercy Medical Center-Clinton also recognizes that not all patients are able to provide complete financial and/or social information. Therefore, approval for financial support may be determined based on available information. Examples of presumptive cases include deceased patients with no known estate, homeless or unemployed patients, and members of religious organizations who have taken a vow of poverty and have no resources individually or through the religious order. iii. Presumptive Charity: Mercy Medical Center-Clinton recognizes that not all patients are able to complete the financial assistance application or provide requisite documentation. For patients unable to provide required documentation (for example, deceased patients with no known estate, homeless or unemployed patients, non-covered medically necessary services provided to patients qualifying for public assistance programs, patient bankruptcies, and members of religious organizations who have taken a vow of poverty and have no resources individually or through the religious), the Ministry Organization may grant financial assistance. For patients who are non-responsive to the application process, other sources of information may be used to make an individual assessment of financial need. This information will enable Mercy Medical Center-Clinton to make an informed decision on the financial need of non-responsive patients.

4 Page 4 of 7 For the purpose of helping financially needy patients with no insurance coverage, a third-party may be utilized to conduct a review of patient information to assess financial need. This review utilizes a healthcare industry-recognized, predictive model that is based on public record databases. These public records enable Mercy Medical Center-Clinton to assess whether the patient is characteristic of other patients who have historically qualified for financial assistance under the traditional application process. In cases where there is an absence of information provided directly by the patient, and after efforts to confirm coverage availability, the predictive model provides a systematic method to grant presumptive eligibility to financially needy patients. In the event a patient does not qualify under the presumptive rule set, the patient may still provide requisite information and be considered under the traditional financial assistance application process. Patient accounts granted presumptive eligibility status will be adjusted according to Mercy Medical Center-Clinton s policy. The discount granted will be classified as financial assistance; it will not be sent to collection and will not be included in the bad debt expense. The presumptive screening intervention is one of the reasonable efforts that will be utilized by Mercy Medical Center-Clinton to identify patients who may qualify for financial assistance. This safeguard will enable Mercy Medical Center- Clinton to systematically identify financially needy patients from among those who have not been responsive to the financial assistance application process. F. Consideration for Patient Assets Mercy Medical Center-Clinton will establish a threshold level of assets above which the excess assets will be utilized for payment of medical expenses. Protection of certain types of assets and protection of certain levels of assets will be provided in this policy. Protected Assets: i. Equity in primary residence up to $50,000. ii. Business use vehicles, iii. Tools or equipment used for business; reasonable equipment required to remain in business. iv. Personal use property (clothing, household items, furniture), v. IRAs, 401K, cash value retirement plans, vi. Financial awards received from non-medical catastrophic emergencies, vii. Irrevocable trusts for burial purposes, and/or viii. Federal/State administered college savings plans.

5 Page 5 of 7 All other assets will be considered available for payment of healthcare expenditures. $5000 equity in personal property is exempt. G. Timeline for Establishing Financial Eligibility i. Every effort should be made to determine a patient s eligibility prior to or at the time of admission or service. Financial assistance applications will be accepted until 1 year after the first billing statement to the patient. ii. Determination for financial support will be made after all efforts to qualify the patient for governmental financial assistance or other programs have been exhausted. iii. Mercy Medical Center-Clinton will make every effort to make a financial support determination in a timely fashion. If other avenues of financial support are being pursued they will communicate with the patient regarding the process and expected timeline for determination and shall not attempt collection efforts while such determination is being made. iv. Once qualification for financial support has been determined, subsequent reviews for continued eligibility for subsequent services will be made for six months. H. Level of Financial Support i. Mercy Medical Center-Clinton has established written income guidelines used to evaluate a patient s eligibility for financial support. Federal poverty guidelines, which are updated on an annual basis, are used for determining a patient s eligibility for financial support. However, other factors, as identified above, should also be considered such as the patient s financial status and/or ability to pay as determined through the assessment process. ii. A full write-off of hospital charges will be provided for patients whose families income is at or below 200% of the most recent Federal Poverty Income Guidelines. iii. For patients whose family income is between 201% and 300% of Federal Poverty Income write-off amounts will be equal to 59%. iv. Patients who present for services with insurance who have nominal, if any coverage for services may also be eligible for the uninsured discount. Nominal coverage is defined as less than 5% coverage for total charges. v. Uninsured patients that don't meet the above guidelines may be eligible for financial assistance based upon the Medical Indigence criteria outlined in this policy. vi. Medical Indigent support: Financial Support is also provided for Medical Indigent patients. Medical Indigence occurs when a person is unable to pay some or all of their medical bills because their medical bills exceed a certain percentage of their family or household income or assets (for example, due to catastrophic cost or conditions), even though they have income or assets that otherwise exceed the generally applicable eligibility requirements for free or discounted care under the organization's financial assistance policy. Medical indigence will be evaluated on a case by case basis that includes a review of the patient s income, expenses and assets. Discounted rates shall not be greater than the amounts generally billed to patients with commercial insurance.

6 Page 6 of 7 vii. While financial support should be made in accordance with the written criteria established, it is recognized that occasionally there will be a need for granting additional support to patients based upon individual considerations. Such individual considerations may include very high health care bills from other providers or other extraordinary daily living expenses. I. Accounting and Reporting for Financial Support i. In accordance with the Generally Accepted Accounting Principles, financial support provided by Trinity Health is recorded in the financial statements at full charges in the category. For the purposes of Community Benefit Ministry reporting, charity care is reported at estimated cost associated with the provision of services. ii. Financial support must be systematically accounted for so that this component of community benefits for the Ministry Organization is accurately recorded. iii. The following guidelines are provided for the financial statement recording for financial support: a. Financial support provided to patients under the provisions of Billing, Collection and Support for Patients with Payment Obligations, including the adjustment for amounts generally accepted as payment for patients with insurance, will be recorded under Allowance. b. Write-off of charges for patients who have not qualified for financial support under this policy and who are unwilling to pay will be recorded as Bad Debt. c. Prompt pay discounts will be recorded under Operational Adjustments- Administrative. iv. Under the following circumstances, it can be assumed that the patient qualifies for charity care and associated services recorded as such: a. Non-covered medically necessary services provided to patients qualifying for state, or county assistance programs. b. Patient bankruptcies. c. Accounts initially written-off to bad debt and subsequently returned from collection agencies where the patient was determined to have met the financial support criteria based on information obtained by the collection agency. J. Uninsured Patients: A discount of 20% will be granted to uninsured patients upon request.

7 Page 7 of 7 New Procedure Applicable to Uninsured* % of FPL Recommended Level of Support 0% - 100% 100% Write-Off 100% - 150% 100% Write-Off 150% - 200% 100% Write-Off 201% - 300% 41% Write-Off * Patients who present for services with insurance who have nominal, if any coverage for services may also be eligible for the uninsured discount. Nominal coverage is defined as less than 5% coverage for total charges. ** The nominal charge shall not exceed $10 for outpatient or emergency department services; $50 for outpatient surgery or interventional services; and $100 for inpatient services. Uninsured patients that don't meet the above guidelines may be eligible for financial assistance based upon the Medical Indigence criteria outlined in this procedure Poverty Guidelines for the 48 Contiguous States and the District of Columbia Poverty Persons in Family Guideline $11, $15, $19, $23, $27, $31, $35, $39,630 For families with more than 8 persons, add $4,020 for each additional person. Source: Federal Register, Vol. 78, No. 16, January 24, 2013