Calls for help with rising deductibles
Melissa Lucarelli, MD, president and medical director of the Randolph Community Clinic in Randolph, Wisconsin, and member of the Medical Economics editorial advisory board has mostly avoided discounts for insured patients. In some cases, though, she has offered them to patients electing procedures not covered by their insurance.
Increasingly, she says, insured patients are asking for discounts as their deductibles have soared. “To them, it feels like they are paying the whole bill, but to me, I’ve already taken a 25% hit because the price has been negotiated down by the insurance company,” she says.
Some physicians give patients the option of paying a discounted self-pay rate, but the patient can’t have the charges count against his or her deductibles. Payers have challenged this practice, though it is typically difficult for them to discover it is happening, attorneys say.
Discounting has been growing over the last few years, experts say, and insurers are pushing back. Many of them now factor discounts into their utilization review process.
“It’s been getting enormous attention as insurance companies are waking up to the opportunity to deny payment on the basis of a provider’s discounting,” says Harry Nelson, JD, managing partner of Nelson Hardiman, a Los Angeles-based law firm.
Historically, reimbursements were strong enough so that some providers could forego copays and deductibles because doing so would increase patient volume and the high levels of reimbursement would in effect cover the discounts, Nelson says.
Today, however, both public and commercial payers are enforcing stricter utilization control, the practice of shifting greater financial responsibility onto patients in
order to discourage unnecessary services.
With reimbursement shrinking and revenue cycles lengthening, along with payers’ stricter standards, discounts are being scrutinized more than ever, he says.
“If you are giving out widespread discounts, or advertising them, you’re going to get into trouble, because it can be seen as constituting fraud and abuse,” Nelson warns.
Physicians can, however, take some steps to make sure their business practices are legal and effective, experts say.
Define financial hardship
First, adopt a specific, written policy covering financial hardship cases, and make sure patients are notified about the details, Nelson says.
Discounts can be set on a sliding scale. A family of four earning $24,300 a year is at the federal poverty line, so you may set price breaks for families earning more, up to a cap at a multiple of the poverty line, Nelson says. He also suggests creating application forms for patients who want to apply for financial hardship discounts and have them ready and available in the office.