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OIG's compliance guidance supports efforts in managing uninsured patients

Patient Financial Services Weekly Advisor, February 4, 2005

Discounts to the uninsured was covered in the OIG's final supplemental compliance guidance, revealing words of encouragement for providers who cover uninsured and underinsured patients. It was released in the January 31 Federal Register.

"They know providers are trying to give a break to the uninsured, and the guidance shows some willingness by OIG to facilitate such programs," says David Szabo, a partner at Nutter, McClennen & Fish, LLP in Boston. "They provide some assurance to hospitals in this area."

According to the guidance, the OIG recently proposed regulations that would define key terms, making clear that free or discounted charges to uninsured patients would not affect the calculation of a provider's ''usual'' charges, as the term ''usual charges'' is used in the exclusion provision.

The OIG is reviewing public comments to the proposed regulations. Until the rule is final, the OIG will continue to enforce that when calculating their "usual charges," individuals and entities do not need to consider free or substantially reduced charges to uninsured patients or underinsured patients who are self-paying patients for the items or services furnished.

"In offering such discounts, a hospital should report full uniform charges, rather than the discounted amounts, on its Medicare cost report and make the FI aware that it has reported its full charges," the guidance says.

The guidance also says that under CMS rules, Medicare generally reimburses a hospital for a percentage of its bad debt, but only if the hospital bills the Medicare patient for unpaid amounts first, and engages in "reasonable, good faith collection efforts that are consistent with the degree of effort applied to collecting similar debts from non-Medicare patients."

A hospital can forgo collection efforts aimed at a Medicare patient, according to the guidance, "if the hospital, using its customary methods, documents that the patient is indigent or medically indigent-and that no source other than the patient is legally responsible for the unpaid deductibles and coinsurance."

To read the OIG's supplemental compliance guidance, click here.

To read CMS' Q&A on hospital pricing for the uninsured, click here.

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