Corporate Compliance

Tip: How to apply charity-care criteria

Compliance Monitor, June 22, 2005

Because a number of factors are involved in making an appropriate charity determination, staff should have the flexibility to apply sound judgment to each case.

Providers are free to apply similar criteria in different ways. For example, one provider may establish a procedure to deem certain types of cases as automatically qualified for charity, while another provider may require case-by-case determinations.

Likewise, a provider may define medical indigence as a patient covered by Medicare and Medicaid and may allow charity processing based on the validity of this insurance coverage. Another provider may opt to require completed charity applications for this class of patients.

A similar situation exists in relationship to convertible/liquid assets, the patient's net worth, and a catastrophic medical situation. One provider may require that the patient apply a percentage of his or her assets to the outstanding medical bills, whereas another provider may execute the charity determination based on the catastrophic nature of the medical expenses.

Providers must also discuss two other issues regarding the criteria used to make charity determinations:

  • The availability of the information
  • The verification of the information

    The provider's procedures for charity-care determinations should also discuss how to process applications when the provider cannot determine eligibility for charity care due to insufficient information. Likewise, providers should base the verification process on the material value involved. For example, it is not sound business practice to expend four hours of staff time to verify eligibility for a $50 charity adjustment. Conversely, it is well worth spending four hours to determine charity eligibility for a patient with a bill of $35,000. The provider should identify the verification steps required to provide cost-effective process.

    This week's tip was excerpted from Charity Care: Tools to Manage the Uninsured Population by Sandra J. Wolfskill. Copyright 2005 by HCPro Inc.

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