Patient Collections Basics Part 3: Developing a Financial Assistance Program

by Mary Pat Whaley http://www.managemypractice.com/ If you’ve read parts 1 (Know Your Payers) and 2 (Implementing Your Financial Policy) of this series, you are ready to consider a financial assistance policy for those patients without insurance. Patients without insurance fall into one of three categories: Patients without insurance who have the ability to pay their medical bills but refuse to pay them. Patients without insurance who have the ability to pay their medical bills and are willing to do so. Patients without insurance who do not have the financial resources to pay their medical bills. Patients in category #1 are easy to identify.  We’ve all encountered them and we know that they do not value what the physician or care provider offers, or they believe that for some reason they should not be required to pay.  They will waste your valuable time and should be discharged from your service if possible. Patients in category #2 are also easy to identify.  They value the healthcare services provided to them and want to pay for them.  Depending on your fee schedule, you may want to offer two levels of discounts to patients without insurance. The first discount is for a patient who does not have insurance and can pay something at time of service, but cannot pay their bill in full.  The second discount is for a patient who does not have insurance and can pay their bill in full with a deep discount.  That deep discount can be justified by the significant reduction of overhead when no additional work is required to collect the account (e.g. file the insurance, post the payment, send the patient a statement, etc.)  If you know what providing services cost you, you are able to set these two discounts based on the unique cost of your services. A quick and dirty way to find out the cost of services in your group is to take the total expenses from your last fiscal year and divide them by the total RVUs produced during the same period, resulting in a cost per RVU.  (See Example A)  Once you know your cost per RVU, you can multiply it for each service/code and compare it to your retail fee schedule to determine what your discounts should be.  (See Example B)  It would not be unusual for a medical practice to give uninsured patients a 25% discount off the retail fee schedule, and uninsured patients paying in full a 50% discount, but as each healthcare entity sets its fees using a different methodology, every group should calculate their discounts individually. Example A Expenses YTD 2010 RVUs YTD 2010 Cost per RVU $1,500,000 30,000 $50.00 Example B Code RVUs Cost of service Fee 25% discount 50% discount Level 3 Est. Pt. 2.03 $101.50 $150.00 112.50 $75.00 The patients in category #3 are those that are unable to pay even when offered the discounted rates.   These patients will need a sliding scale financial assistance program, but there are philosophical and financial questions to be answered before you undertake the creation of a formal program. Questions to Be Answered By Your Group: Do patients in your service area have other care options?  Is there a Federally Qualified Health Clinic (FQHC) in your area that offers sliding scale payments?  Is there a Free Clinic, or a hospital-sponsored clinic or urgent care?  Is there a network of specialists that rotate the responsibility for providing care for uninsured, poverty level or indigent patients?  What is your group’s responsibility for providing care to uninsured people in the community? Can your group afford to give care for less than it costs? Will the group limit the number of patients it will see under your financial assistance plan to control the deficit? Does your group feel that it is already providing charity care service by accepting Medicare or Medicaid? Would your providers rather provide charity care by volunteering at a local free clinic or going on medical missions? If your group decides to implement a financial assistance program, here are the steps to take. Determine the objective of the program, which might be something like: The goal of the ABC Clinic’s Financial Assistance Program is to provide healthcare services at no charge or at a nominal charge to patients whose annual income is at or below the Federal Poverty Guidelines, and to provide healthcare services at discounted fees to patients whose income is above the Federal Poverty Guidelines but does not exceed ___% of the Guidelines.  Create a financial assistance application that the patient will complete.  Your local hospital or social service office may be able to offer their application for you to tweak. Check your state to see if there is a program for patients where insurance is available for a fee that your group might be willing to pay on behalf of the patient. This is typically only worthwhile for large hospital, procedure or surgery fees.  Determine what services will and will not be eligible for the program.  Visits? Labs? Procedures? Tests? Vaccines? Surgery? Therapy? Determine for what period of time you will grant financial assistance to patients. One month? Six months? One year?  Determine what information you will require patients to supply so you can decide upon the appropriate discount. Some standard information to require on a Financial Assistance Application is: Photo Identification Check stubs from previous three months Check stubs from Social Security Check stubs from Disability Most recent tax return or W-2s Most recent copy of bank statement If no income, description of how lodging, meals and utilities are paid If federal assistance, copy of paperwork If assistance from family or friend, letter describing circumstances Check Medicaid status, or ask for copy of Medicaid denial Is the patient eligible for insurance at work or under COBRA?  Determine what discount you want to apply to what level of the Federal Poverty Guidelines, which you will find on the Internet. Note that the guidelines have not changed for several years. Calculate the discount as follows: Calculate yearly income of patient based on documents supplied (wages + other income) for 12 months + checking/savings amount. Calculation should compare generally to recent tax return or patient should explain any discrepancy. Place the patient in a column on the Federal Poverty Guideline based on their income to determine eligibility for financial assistance.  Decide upon the workflow for the financial assistance program – how will you let patients know it is available?  Once patients have been approved, how will you identify them and the note the applicable discount in the computer system? How will you keep track of which patients need to reapply to keep their financial assistance programs going? Write your financial assistance policy and follow the policy in the same way for every patient that applies for the program.  Keep clear and complete documentation on each patient who applies. Educate all staff and providers on the policy. Related posts: Collections Basics – Part 1: Know Your Payers In a traditional healthcare setting, the revenue cycle begins with... Collection Basics Part II: Implementing Your Financial Policy In Part 1 of this series we explored payers.  Now... Rethinking Your Back-End Patient Collections: Give Your Patients a SMAC Please welcome MMP’s newest sponsor: SmartFund Medical Acceptance Company, LLC...

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ePrescribing Survivial Guide: Getting Your Ten Electronic Prescriptions Done in the Next 30 Days

by Mary Pat Whaley http://www.managemypractice.com/

This is a busy time for most practices. Managers are preparing for the annual juggling act of getting staff and physicians coordinated for summer vacations. Practices are ramping up for new doctors joining their practice at the traditional end of residency programs in the summer. Many practices are in the midst of shopping for, negotiating for or implementing EMRs. And most everyone without an existing EMR is struggling with the e-prescribing deadline looming in 30 days. Read my first post on this topic here.

As a reminder:

• Eligible professionals who are not successful e-prescribers, based on claims submitted between January 1, 2011 and June 30, 2011, may be subject to a “payment adjustment” (read payment cut) in their Medicare Part B Physician Fee Schedule (PFS) for covered professional services in 2012.
• Those that do not e-prescribe as a part of 10 Medicare patient encounters by June 30, 2011 will only receive 99% of their Medicare payment for all encounters in 2012.
• Those that do not e-prescribe as a part of 25 encounters by December 31, 2011, will only receive 98.5% of their Medicare payments for all encounters in 2013 and only 98% of their Medicare payments for encounters during 2014 and going forward.

Here are the problems practices have encountered trying to get their ten:

• Physicians seeing patients in facilities and using the codes that are eligible for eRx, but not having the ability to e-prescribe during the visit
• Physicians in specialties not prescribing many medications
• Physicians in specialties prescribing predominantly controlled drugs, which are not currently eligible for electronic prescribing

Today, the AMA released this announcement

May 31, 2011

On May 26 the Center for Medicare and Medicaid Services (CMS) responded to AMA concerns about the e-prescribing penalty program and issued a proposed rule that makes significant changes to it by adding more exemption categories. These changes will assure that physicians are not unfairly penalized for failing to meet the requirements under the 2012 e-prescribing penalty program.

Physicians are still required to e-prescribe using a qualifying e-prescribing system and report the G8553 code on at least 10 Medicare Part B claims from Jan. 1, 2011, through June 30, 2011, to avoid the 2012 e-prescribing penalty.

However, to avoid the 2012 e-prescribing penalty, physicians now will have an opportunity to attest through an on-line web portal that they are eligible for one of the following penalty exemptions:

• Physician’s practice is located in a rural area without high speed internet access
• Physician’s practice is located in an area without sufficient available pharmacies for electronic prescribing
• Physician is registered to participate in the Medicare or Medicaid EHR Incentive Program and has adopted certified EHR technology (New)
• Physician is unable to electronically prescribe due to local, State, or Federal law or Regulation (e.g., prescribes controlled substances) (New)
• Physician infrequently prescribes (e.g., prescribe fewer than 10 prescriptions between January 1, 2011 –June 30, 2011) (New)
• There are insufficient opportunities to report the e-prescribing measure due to program limitations (e.g., surgeons) (New)

Physicians will have to apply for an exemption from the 2012 e-prescribing penalty via the web-portal tool by Oct. 1.

What if you don’t fall into one of these new categories?

It’s time to tap into one of the free electronic prescribing packages available. Here are two choices:

1. The National ePrescribing Patient Safety Initiative (NEPSI) – Free, Allscripts Software
2. Practice Fusion – Free, probably will have advertising and your data will be mined (all 10 prescriptions!) but you may be able to get it up and running very quickly

Some other thoughts on getting your ten done

1. Prescribe over-the-counter drugs including stool softeners and anti-emetics.
2. Prescribe Tylenol3 or another non-controlled pain reliever – patients do not need to pick these prescriptions up or pay for them.
3. Ask your Medicare patients if they have any prescriptions they would like you to refill while they are in the office. Over-the-phone refills do not count as there is no associated face-to-face service.

Related posts:

1. E-prescribing ”“ Use it 10 times for Medicare Patients Between Now and June 30, 2011 or Lose Money in 2012 Should I consider ePrescribing in 2011 if I’m not ready...
2. How Do You Get That Stimulus Money for Using an Electronic Medical Record? (You Register!) Image via Wikipedia Registration opens on January 3, 2011 for...

My Notes on the March 22, 2011 CMS Open Door Forum on Physician Quality Reporting System (PQRI) for the Beginner

Biohazardous Waste – What Is It and What Do I Do With It?

by Mary Pat Whaley http://www.managemypractice.com/ The terms “biohazardous material,” “biohazardous waste,” “medical waste,” “regulated waste,” and “regulated medical waste” are used somewhat interchangeably, but they all have different definitions, and the definitions can change depending on the state in which you are located. Biohazardous Material - refers to materials that present a risk or potential risk to the health of humans, animals, or the environment. They can be infectious agents or chemicals or other products that can damage the environment. Certain chemotherapy drugs and most laboratory reagents fall into the biohazardous material category. Biohazardous Waste - refers to waste (e.g. body fluids or tissues) which has the risk of carrying human pathogens. Biohazardous Waste is usually generated at health care facilities or research facilities, and the term is used interchangeably with Medical Waste. Regulated Waste – is the term OSHA uses to describe blood and body fluids and “OPIM” (other potentially infectious material) as defined in the Bloodborne Pathogens regulation (BBP). Regulated Medical Waste - refers to biohazardous waste whose handling is regulated by state or federal laws. In a medical practice or laboratory we are most often concerned with the BBP-defined Regulated Waste and the state-defined Regulated Medical Waste which we must discard per state and federal regulations. The failure to understand the difference in the definitions can lead to unnecessary expenses for disposing of regulated medical waste. The Bloodborne Pathogens Standard uses the term “regulated waste” to refer to the following categories of waste: Liquid or semi-liquid blood or other potentially infectious materials (OPIM) Items contaminated with blood or OPIM and which would release these substances in a liquid or semi-liquid state if compressed Items that are caked with dried blood or OPIM and are capable of releasing these materials during handling Contaminated sharps Pathological and microbiological waste containing blood or OPIM In order to avoid some confusion, I’m going to refer to the BBP-defined regulated waste as “medical waste” or “biohazardous waste” to more easily differentiate it from “regulated medical waste” as administered by the state. Biohazardous Medical Waste: must be discarded in containers that are clearly marked with a biohazard symbol or in a red bag, which is universally accepted as a symbol of biohazardous waste. sharps must be disposed of in hard-sided containers which cannot be penetrated by the sharp material and marked as biohazardous if the container has potentially infectious material within. Almost all sharps generated in a medical practice contain potentially infectious materials. “Regulated Medical Waste” generally refers to waste whose disposal is regulated by state and/or federal laws. In North Carolina, regulated medical waste is defined in general as “blood and body fluids in individual containers in volumes greater than 20 ml, microbiological waste, and pathological waste that have not been treated pursuant to specific standards.” Therefore, a 10 ml tube of blood is medical (biohazardous) waste, but is not regulated medical waste — it doesn’t meet the 20 ml individual container specification. Table paper contaminated with blood or vaginal secretions is medical (biohazardous) waste but not regulated medical waste—it doesn’t meet the expressible blood specification. Regulated medical waste: is generally handled by contracting with a waste management company to take the waste offsite and bury it or decontaminate it or otherwise destroy the potential for harm from it the big square boxes with the red liners and biohazard signs on all sides that you have picked up by waste disposal companies contain regulated medical waste you pay (per box) to have these removed you get a receipt when a box is picked up, and eventually a certificate with proof of destruction or decontamination. (This information must be saved for at least 3 years in NC.) Technically, most medical practices do not generate any state-defined regulated medical waste. Individual tubes of blood or body fluids are almost always smaller than 20 ml. Urine, which is not considered medical waste unless it is visibly contaminated with blood or pus, may be disposed of by pouring it down the sink. Contaminated table paper doesn’t fit the “expressible blood” definition required for “regulated medical waste.” Gloves which do not have visible blood on them are not considered medical waste. OK, so why are we paying so much to have the big square boxes with the red liners picked up and taken offsite? Because most landfills won’t accept the red biohazardous bags in which we discard the biohazardous waste that is not regulated. Therefore the practice is left with little choice but to pack it up and send it with the waste management people as regulated medical waste. I would recommend checking with the municipal authorities to see if it is allowable to discard red biohazard bags (that don’t contain regulated medical waste) in the landfill. If your municipality does allow this, there is no need to put these red bags in the large boxes dedicated to regulated medical waste. Whether or not you are allowed to dispose of biohazardous waste that isn’t regulated in the community landfill, you can limit the amount of regulated medical waste you have picked up by educating your staff as to what qualifies for the big square boxes or a biohazard bag disposal, and what can be put in ordinary trash. Table paper that isn’t visibly contaminated does not qualify as medical waste – put it in the regular trash. Gloves that are not contaminated with blood can go in the regular trash. And make sure the staff isn’t putting paper waste into a big square box just because it is conveniently located! Pearls of Wisdom from OSHA…per OSHA, it is the employer’s responsibility to determine the existence of medical waste. This determination, according to OSHA, should not be made based on the volume of blood, but rather on the potential to release blood (e.g. when compacted in a waste container). OSHA states that bandages which are not saturated to the point of releasing blood or OPIM if compressed is not considered biohazardous waste. Likewise, discarded feminine hygiene products do not normally meet the criteria for medical waste as defined by the BBP standard. Beyond these guidelines, it is the employer’s responsibility to determine the existence of medical waste. Here is a link to a website where you can get to the state regulated medical waste regulations by state. Consultant Elizabeth Knollmeyer, B.S., MT (ASCP) has over 40 years experience in the laboratory industry. She specializes in financial, operational management and compliance issues for both hospital and physician office laboratories. Libby has a wide variety of experience with her areas of special expertise including financial review and management, Quality Management protocols, Outreach development, compliance and regulatory assistance, lab design and up fitting, lab remodeling, and market research for IVD manufacturers. She works independently and with large consulting groups to provide interim management for hospitals, and serves as adviser to lab equipment and supply distributors. She can be reached at (336) 288-5823 or at eknollmeyer@triad.rr.com.

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