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ED Coding and Reimbursement Alert

The 411 on Patient Discounts

Published on Wed Jan 01, 2003

The emergency department must see and treat every patient until they are stabilized even the ones who can't pay the medical fee. Consequently, EDs must offer discounts to patients on a regular basis.

If you don't follow the rules, your discounts could put your practice in hot water with your contract payers or federal regulators. Even coders should be aware of these billing tips and how they impact their department.

Emergency departments can avoid raising eyebrows by using these six pointers:

  • When you give discounts to uninsured patients, don't push the OIG's buttons: Avoid regularly discounting uninsured patients below the Medicare allowable, says Bill Sarraille, an attorney at Arent, Fox, Kintner, Plotkin & Kahn in Washington, D.C.
  • If the patient is a Medicare beneficiary, again don't price discounts below the Medicare allowable unless you note the reduced charges on your claim. If you don't note the reduced claim, your claim is false, Sarraille says. The allowable no longer applies when you charge below it, so Medicare can penalize you for receiving a payment based on the allowable's higher fee schedule and not the lower actual charge.

    In other words, you will be penalized for receiving an "overpayment," explains a recent alert from the Arent Fox firm. You may have to return the overpayment, or you might even face charges.
  • When you offer a financial break to patients with insurance other than Medicare, you should eliminate their entire bill. Avoid offering a partial charge, especially if it falls under the Medicare allowable. The days of charging their insurance company only as a professional courtesy are long gone.

    Routine waiving of copays, deductibles and patient balances is not usually acceptable, Sarraille says. Some authorities, including Sarraille, feel that if you want to extend an insured patient a discount you are better off, from a compliance point of view, waiving the entire bill.
  • Be consistent when you dole out discounts for financial hardship. Apply an office standard, such as 200 percent of the federal poverty guidelines, for what financial conditions exactly qualify as good-faith need, Sarraille says.
  • If you can, obtain some form of written proof that the patient is indeed in financial hardship, says Catherine Brink, CMM, CPC, president of Healthcare Resource Management Inc., in Spring Lake, N.J. "It's very easy for people to say that they have a financial hardship," Brink warns. "A patient might tell you she earns $200 a week, but sitting in the bank is $2 million to her name," Brink warns.

    To make sure a patient isn't taking advantage of your generosity, it benefits your department to expend the effort to try to get proof that validates the discount. Ask for any tax returns, W2 forms, even bank statements, Brink says. Find that backup, and put the documents in the patient's financial files, she adds. Granted, this documentation standard is unrealistic for the ED, but obtaining written proof when possible can't hurt.

    Recognize, however, that it may take too much time to track down these documents. Obtaining this proof of financial need is a goal, not an absolutely necessary requirement for the ED, where patients of all financial circumstance necessitate care.

    Check out your state insurance laws. Some states prohibit giving discounts to entities that arent also given to insurance companies. Basic cash discounts to non-insured patients can pose a problem in these states, Sarraille warns.

     

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