The Sliding Fee Discount Program: Transitioning from Policy Guidance to Every Day Operations
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1 The Sliding Fee Discount Program: Transitioning from Policy Guidance to Every Day Operations Presented by: Marcie H. Zakheim, Partner 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved.
2 DISCLAIMER This training has been prepared by the attorneys of Feldesman Tucker Leifer Fidell LLP. The opinions expressed in these materials are solely their views and not necessarily the views of any other organization including the National Association of Community Health Centers. The training is designed to assist your health center in developing and implementing effective operations consistent with the requirements of the Bureau of Primary Health Care (BPHC) within the Health Resources and Services Administration (HRSA) of the U.S. Department of Health and Human Services (HHS). The materials are being issued with the understanding that the authors are not engaged in rendering legal or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought Feldesman Tucker Leifer Fidell LLP. All rights reserved. 2
3 PRESENTER: MARCIE ZAKHEIM Partner at Feldesman Tucker Leifer Fidell, specializing in, among other things, federal grants and grant-related requirements (in particular the requirements of and related to Section 330 of the Public Health Service Act) and nonprofit corporation law, Counsel to National Association of Community Health Centers, and numerous Primary Care Associations and health centers nationwide for 18 years Provides advice and technical assistance services on compliance with federal rules and requirements related to the operation, administration and governance of health centers and health center consortia; assists with development of federal grant applications; and analyzes and provides comments/advice on legislation, regulations and policies impacting health centers and the health care industry in general Contact Information: or Feldesman Tucker Leifer Fidell LLP. All rights reserved. 3
4 AGENDA I. Overview and Introduction II. Establishing Your Fee Schedule III. Establishing Your Sliding Fee Discount Schedule IV. Show Me the Money Establishing Your Billing and Collection Policies 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 4
5 Overview and Introduction 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 5
6 LEGAL AUTHORITY Health center statute [42 USC 254b(k)(3)(F) & G] and regulations [42 CFR 51c.303(f) & (g)] Schedule of fees Corresponding schedule of discounts Reasonable effort (including systems for eligibility determination, billing and collection) to collect payments from patients and third party payors Assure that no patient will be denied health care services due to an individual's inability to pay and reduce or waive fees as necessary to ensure such access Codified in Health Center Program Requirement # Feldesman Tucker Leifer Fidell LLP. All rights reserved. 6
7 SLIDING FEE DISCOUNT PROGRAM PIN Final Policy Information Notice (PIN) # issued September 22, 2014 Primary resource for HRSA s sliding fee discount program (SFDP) policy, superseding all prior guidance on the same subject Does not supersede billing requirements under Medicaid, Medicare or other programs Does not supersede any requirements specified in applicable Funding Opportunity Announcements or Notices of Awards 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 7
8 SLIDING FEE DISCOUNT PROGRAM PIN Applies equally to all Section 330-funded health centers (including sub-recipients and special population only grantees) and FQHC look-alike entities Applies to all patients served by the health center Can consider target population s unique characteristics and specific barriers to care in establishing and evaluating operating procedures What s the difference?? policy reflects the board s direction and procedure is how the policy is implemented Applies ONLY to activities provided within the health center s scope of project 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 8
9 SLIDING FEE DISCOUNT PROGRAM PIN Goal: Improve access by minimizing financial barriers to care BUT also have to maximize revenue balance is key! True access patients must be made aware of the SFDP (e.g., multiple methods to inform patients about SFDP in appropriate languages and literacy level) Beyond basic structural requirements, SFDP policy affords health centers a lot of flexibility to determine what s best for the center and its patients and community HOWEVER with greater flexibility comes greater responsibility / accountability!!! Document all decision-making, particularly Board approval of key policies Always be able to demonstrate that choices / decisions maintain/further patient access and do not result in barrier to care 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 9
10 OPERATIONAL IMPLICATIONS Increase depth and breadth of required policies and procedures and expands level of detail Requires greater level of coordination among various health center functional areas (finance, administration, front desk operations) Potential practice management system limitations and configuration hurdles (interfaces, EMR templates) Must ensure appropriate training for providers and coders to accurately capture visit coding is key!! Increased staffing and/or enhanced systems?? Increased costs?? AND, don t forget enhanced board responsibilities more on this later 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 10
11 Establishing Your Fee Schedule 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 11
12 STRUCTURE OF THE FEE SCHEDULE Fee schedule must address all in-scope services (required and additional) and be used as the basis for seeking payment from patients as well as third party payors Fees must be designed to cover reasonable costs and must be consistent with locally prevailing rates or charges for the service Key question how do we balance both? 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 12
13 DEVELOPING THE FEE SCHEDULE Step #1: Determine services that will have distinct fees Can combine certain services into single fee (such as combining services with related supplies, lab) must be consistent with prevailing standards of care and locally prevailing charges Can use global fee for services that require multiple visits (such as prenatal care) but check various payor rules and contracts May include distinct fees for non-service in-scope elements (such as enabling services, outreach) if they are typically reimbursed separately within the marketplace 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 13
14 DEVELOPING THE FEE SCHEDULE Step #2: Determine actual costs of providing required and additional services included in scope Step #3: Consider locally prevailing rates for these services Look at charges of other community providers for the same or similar services (can use similarly situated communities if no comparable providers in center s community) But be aware of potential antitrust issues don t set charged in concert with other providers Sources may include Medicare, Medicaid, private providers, or commercial sources Document that you have conducted this review! 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 14
15 COSTS VERSUS PREVAILING CHARGES Relative weight given to reasonable costs and locally prevailing charges may vary depending on the situation of the health center General rule of thumb : except under exceptional circumstances, should always look at and try to cover costs first however: New health centers with little history of cost may rely more heavily on locally prevailing charges until they have a reliable determination of their own costs If prevailing charges/rates are lower than costs, to remain competitive may need to put greater weight on prevailing rates than costs (and make up the difference somewhere else) All health centers must adjust fees, as appropriate, based on regular cost analyses, as well as changes in the local health care market 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 15
16 Establishing Your Sliding Fee Discount Schedule 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 16
17 SLIDING FEE DISCOUNT SCHEDULE After developing the fee schedule, establish the sliding fee discount schedule (SFDS) based on patient s ability to pay Purpose to address financial barriers (as opposed to fee schedule, which covers costs) Goal ensure that uniform and reasonable fees and discounts are consistently applied to all patients Frequency should be reviewed/revised at least annually to reflect annual update to the Federal Poverty Guidelines (FPG) NOTE: the entire SFDP should be reviewed periodically (at least every 3 years) to ensure effectiveness in eliminating / minimizing financial barriers to care 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 17
18 STRUCTURE OF THE SFDS SFDS must have at least three discount pay classes between 101% - 200% of Federal Poverty Level (FPL) that are tied to gradations in income levels Flexibility to determine number of pay classes and types of discounts (i.e. can be % of fee or flat / fixed fee for each class) as long as not creating barriers to care If using multiple SFDS for distinct types/ categories of services (e.g. medical, behavioral health, dental), each one can have different # of pay classes and different types of discounts, as long as they meet the structural rules Query what about procedures? 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 18
19 STRUCTURE OF THE SFDS No discounts for patients with annual incomes above 200% FPL If receiving non-330 funds that require discounts above 200%, may reduce patient payments accordingly and apply those other funds to make the center whole Query what if the terms and conditions of other funds do not require discounts above 200%? Query what about excess program income? Can you use EPI to subsidize care? 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 19
20 STRUCTURE OF NOMINAL FEE No more than a nominal fee for patients earning annual incomes at or below 100% FPL Nominal fee is not required requirement is full discount but health center board can elect to charge nominal fee if not a barrier to care Nominal fee must be less than the fee paid by patient in lowest rung of SFDS Nominal fee is not a payment threshold, minimum charge/fee or co-payment Language matters do not refer to minimum fee in policy/procedure Nominal fee versus nominal charge is there a difference? PIN uses both terms 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 20
21 STRUCTURE OF NOMINAL FEE Nominal is defined as a flat fee that does not reflect the true value of the service and is considered nominal from patients perspective examples of ways to assess and document nominal include Conducting patient surveys Asking patient board members Reviewing and assessing co-payments for public insurance program for low income individuals Reviewing and assessing collection rates 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 21
22 ELIGIBILITY VERIFICATION Income and family size are the sole factors in determining eligibility for SFDP no exceptions! Must assess all patients (need this for UDS purposes) Cannot consider other factors (such as insurance status or population type) in eligibility determination, BUT can consider unique population characteristics in developing supporting operating policies and procedures Cannot use asset or net worth (combining assets and income) tests Cannot require patient to apply and be turned down for insurance or related third party coverage before offering opportunity to apply for SFDP 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 22
23 ELIGIBILITY VERIFICATION Board must define income and family size and the necessary documentation TIP: include the board-approved definitions in SFDP policy Flexibility, as long as no barrier to care and applied uniformly to all patients Income can be defined using / adapting definitions from other sources, such as Census Bureau, IRS, other federal programs Family size can include individuals not living with patient but supported by patient s income 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 23
24 ELIGIBILITY VERIFICATION Self-declaration? Can have full self-attestation (no limitations) v. partial self-attestation (only good for first visit) v. no selfattestation Up to individual health center and its Board Must all patients apply for the SFDP? NO but income must be assessed and all patients must be offered the opportunity to apply If a patient is informed about availability of SFDS and chooses not to provide required eligibility verification information, may charge the patient full fee 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 24
25 ELIGIBILITY VERIFICATION PROCESS: must be efficient, respectful and culturally appropriate eligibility verification process and documentation requirements should not create a barrier to care How much information do we need on the eligibility verification form? Should we ask for social security # and/or Insurance status? Why? When in doubt simplify! And always document the process and assess periodically for compliance and effectiveness 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 25
26 ELIGIBILITY VERIFICATION FREQUENCY: Patient s eligibility should be updated at least annually and more often if patient s circumstances change mid-year What happens if you don t re-assess? Could be leaving money on the table Higher bad debt write-offs (versus sliding fee schedule discounts) if patients are placed in the wrong payment level or not placed in any payment level (but they should be) 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 26
27 APPLICATION TO SCOPE OF SERVICES Applies to all services furnished within scope of project for which a charge has been established, regardless of All required and additional services listed on Form 5A in any column (I, II, and III) Type of service or mode of delivery is irrelevant for application of the SFDP BUT may be relevant for the development of the actual SFDS (see next slides for what this means) 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 27
28 APPLICATION TO SCOPE OF SERVICES Can elect to have multiple SFDS / nominal fees based on services/mode of delivery, provided that Each SFDS / nominal fee meets the structural requirements in the PIN Different SFDS / nominal fees are applied uniformly to similarly situated patients Patient access is considered NOTE: THIS APPLIES TO IN-SCOPE REFERRAL AGREEMENTS (REFERRALS LISTED ON FORM 5A) 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 28
29 REFERRAL ARRANGEMENTS Services provided through in-scope referral arrangements (Form 5A, Column III) Referral provider must offer a discount schedule that, at a minimum, is consistent with SFDS / nominal fee requirements OR Health center supports the cost of care by paying the referral provider the difference between the provider s charge and what the patients should pay under discount schedule Referral provider can offer deeper discounts Not having appropriate discounts included in in-scope referral arrangements is a big pitfall among health centers 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 29
30 REFERRAL ARRANGEMENTS Outstanding questions In meet the structural requirements in the PIN, does the referral provider s SFDS have to include at least 3 tiers, etc., or just conform to eligibility requirements? What about referral providers with their own charity care / indigent care policies as long as those policies apply equally to all individuals earning incomes at or below 200% FPL, would that be sufficient? Same as above, only the charity care policy is established by State law (such as indigent care pools)? 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 30
31 SERVICE-RELATED SUPPLIES & EQUIPMENT Service-related supplies and equipment charged separate from the underlying service (e.g., dentures, crowns, prescription drugs) can be discounted under a structure different from SFDP Applies to supplies and equipment related to but not included in the underlying service as part of prevailing standards of care Does not apply to general diagnostic lab services only lab charges associated with supplies/equipment Charge should be less than prevailing charge, but can be higher than normal discount Should include availability of waivers / payment reductions to ensure access cannot deny care if patient cannot pay Must inform patient prior to providing service that the supplies / equipment will be charged separately and what that charge will be (and if payment plans are available, what those are) 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 31
32 SUPPLIES & EQUIPMENT: RESTORATIVE DENTAL EXAMPLE Underlying professional services charged based on regular SFDS and nominal fee for that service Remember, SFDS and nominal fee for restorative dental services can be different than SFDS and nominal fee for medical services (or even preventive dental services) as long as each SFDS and nominal fee meets structural requirements in PIN # , is applied to all patients uniformly, and does not create barriers to care Supplies/equipment (dentures, crowns) can be charged based on cost recoupment Price should reflect a discount from locally prevailing charges Must establish procedures to reduce payments or provide payment plans as necessary to ensure access Query can you require payment in full for the supplies/ equipment in advance of service? (see billing and collection slides) 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 32
33 SUPPLIES & EQUIPMENT: PRESCRIPTION DRUGS EXAMPLE Underlying pharmaceutical (professional) services charged based on regular SFDS and nominal fee for that service HRSA Service Descriptor Guide: Pharmaceutical services provide access to prescribed medications may include a broad spectrum of functions ranging from the dispensing and tracking of medications to pharmacist-delivered patient care services (e.g., disease state management, medication reconciliation, therapeutic monitoring, wellness promotion, and disease prevention) Supplies/equipment (prescription drugs) can be charged at cost or higher, as long as the drug costs (not the pharmacy services) is the same for all patients Price should reflect a discount from locally prevailing charges Must establish procedures to reduce payments or provide payment plans as necessary to ensure access 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 33
34 Show Me the Money Billing and Collection Policies 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 34
35 BILLING AND COLLECTION POLICIES Must maximize revenue from public and private third party payers must make every reasonable effort to collect such payments without application of discounts Must fully charge all third-party payors Cannot require patients to enroll in insurance but can and should educate them of benefits!! Ensure compliance with FQHC Medicare and Medicaid guidelines and maximizing rates 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 35
36 BILLING AND COLLECTION POLICIES Must make reasonable efforts to bill and collect payments from patients Billing and collection policies and procedures cannot become barrier to care or result in denial of care due to inability to pay Reasonable efforts may vary based on elements unique to the health center (such as its target population and location) General community versus transient populations Rural / sparsely populated versus city / urban 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 36
37 BILLING AND COLLECTION POLICIES Collection procedures can include Encouraging some up-front payment at time of service (but cannot deny care if patient does not have payment at time of service) Follow-up letters and phone calls Requiring patients with overdue balances to speak with financial counselor prior to next visit (as long as care is not denied) Establishing grace periods and / or payment plans Query should collection procedures be different for nominal fee patients who are at or below FPL?? 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 37
38 REDUCING PATIENT COST-SHARING Not required to offer full slide to insured patients; however, if patient cost-sharing amount is more than he/she would have paid based on his/her SFDS pay class, at a minimum, must reduce costsharing amount to applicable SFDS pay class amount (subject to legal/contractual limitations) Permitted but not required to: Discount if cost-sharing does not exceed SFDS pay class Apply a full slide to cost-sharing Provided that all similarly situated patients are treated uniformly 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 38
39 REDUCING PATIENT COST-SHARING Example: Patient X has a co-payment of $50 The fee schedule indicates that the charge for the service received by Patient X is $100 Based on eligibility process, Patient X would qualify for SFDP and Patient X s SFDS pay class would provide for 75% discount (in this case, $100 - $75 = $25 payment) Since Patient X s payment under SFDS would be $25, at a minimum, co-payment must be reduced to $25 (subject to contractual / legal limitations) 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 39
40 REDUCING PATIENT COST-SHARING Outstanding questions If a particular plan prohibits discounting cost-sharing, can you offer discounts on the cost-sharing amounts charged by other plans? How is this fair? How do you account for this discount? Is it included under SFDS amounts or general adjustments? Does your current practice management system have the capabilities to make these determinations at time of service? Can you use EPI or other funds to subsidize costsharing for patients earning above 200% FPL? 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 40
41 WAIVING PATIENT CHARGES Must establish policies and procedures that identify circumstances to waive or reduce fees to ensure access Secure board approval Apply consistently and uniformly based on defined, boardapproved criteria (financial need that does not fit into the SFDS; unusual temporary circumstances that don t rise to the level of re-assessment of eligibility) Define who has authority to make determinations and do not deviate Apply to patient balances under both SFDP and full fee (no distinction) May establish board-approved policies to incentive payment (such as cash/prompt pay discounts) Must be available to all patients equally regardless of SFDS pay class 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 41
42 DISCHARGING PATIENTS May discharge patients for refusal to pay as a last resort only after reasonable efforts have been made to secure payments and/or bill for amounts owed to the health center for services provided Board must approve patient discharge policies that include What constitutes refusal to pay objective criteria only appearances do not count Individual considerations in making such determinations Collection efforts to be taken, including grace periods, payment plans, meetings with financial counselors and document all such efforts May establish related policies for determining how and when patients may be permitted to rejoin the regular practice at a future date Consult local counsel regarding state requirements 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 42
43 AND DON T FORGET THE BOARD Full board approval of all required SFDP policies is primary mechanism to ensure that the SFDP remains patient centered, improves access to care and assures that no patient is denied services due to inability to pay Eligibility criteria, including definitions of family/income and frequency of re-evaluation Documentation and income verification requirements Structure of the Sliding Fee Discount Schedule (SFDS) and nominal fee (as applicable) Billing and collection policies Policies to waive/reduce fees, etc Feldesman Tucker Leifer Fidell LLP. All rights reserved. 43
44 AND DON T FORGET THE BOARD Board does not have to approve supporting operating procedures that implement these policies, but should get feedback as part of the board s evaluation responsibility Two types of Board reviews Annual review SFDS when new federal poverty guidelines are issued Periodic (not necessarily annual) review of effectiveness of the SFDP (e.g., patient satisfaction surveys, focus groups, collection rates) and update policies or direct the CEO as appropriate 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 44
45 GENERAL PITFALLS IN DEVELOPING SFDP Not including all elements set forth in PIN # and Program Requirement #7 in the SFDP policy and procedure If some elements are included in other corresponding policies and procedures (such as billing and collection), missing references / linkages to such other policies and procedures Not assessing effectiveness of entire SFDP only revising the schedules/tables based on new annual Federal Poverty Guidelines Not coordinating among different functional areas and/or training staff in the new SFDP Does the policy and procedure have to include exact language from PIN ? NO must meet the intent What about signage? Same, as long as the signage is clear and accurate regarding eligibility and availability AND is sufficiently visible to and understood by the patients 2015 Feldesman Tucker Leifer Fidell LLP. All rights reserved. 45
46 QUESTIONS? Marcie H. Zakheim, Esq. Feldesman Tucker Leifer Fidell LLP th Street N.W. Suite 400 Washington, D.C (202)
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