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Q: What guidance can you give on patient discounts (i.e., waived copays to assist with chronic disease-management initiatives)?

Patient Financial Services Weekly Advisor, May 14, 2004

A: CMS stated in a February 17 guidance document that there is nothing in its regulations to prohibit a hospital from waiving the collection of charges to any patients, as long as it is done as part of the hospital's indigency policy. The Office of Inspector General (OIG) has also advised that it sees no issue with waivers for medically indigent patients, as long as the waiver is not linked in any manner to the generation of business payable by a federal healthcare program.

Likewise, if the hospital documents-using its customary methods-that the Medicare patient is medically indigent, then no further collection activity is required and the amounts may be claimed on the Medicare bad-debt report.

The hospital is free to determine its own indigency policy and criteria. However, the criteria must apply equally to Medicare and non-Medicare patients. Documentation must be uniformly obtained and filed for audit.

In sum, waiving of any portion of fees should be based on indigency determination, regardless of the payers involved. This allows the hospital to apply a standard policy and criteria, regardless of the specific program involved. Waivers linked to business incentives are clearly not permitted under the OIG rulings.

This question was answered by PFS Advisor editorial board member Sandra J. Wolfskill, FHFMA, president, Wolfskill & Associates, Inc. Chardon, OH.

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