Corporate Compliance

Discount policies for noncharity patients

Compliance Monitor, June 16, 2005

Q: I'm looking for some creative ways to administer a discount policy for patients who do not meet our charity guidelines (which is 200% of federal poverty levels with allowances for assets such as home and car) but have legitimate expenses that take up most of their net income in such a way that they cannot pay their hospital bills.

For instance, their income exceeds the federal poverty level but they say their medicine costs so much that they have little to nothing left at the end of each month.

A: Each provider is able to customize the charity policy to best serve the needs of the patient population served. So in addition to using the 200% of the federal poverty guidelines, the provider could add a clause allowing additional credit for certain medical expenses-and define which medical expenses would be included in very specific terms. The credit could be applied to the patient's income number which in theory would help the patient qualify for charity, or a higher level of charity if the provider uses a sliding scale.

Another option would be to develop a medically indigent category of charity care. Rather than tie medical indigency to just the federal poverty guidelines, the provider could base the declaration of medical indigency on a combination of income and amount of total medical-related bills and debt. Once declared medically indigent, the patient would qualify for charity for the term of the declaration.

This question was answered by Sandra J. Wolfskill, president of Wolfskill & Associates, Chardon, OH. She can be reached at swolfskill@cs.com.

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