No matter where my conversations start with most doctors, they eventually end up in discussions of declining reimbursements and diminishing revenue in their practices. It is easy for us to quickly put blame on third-party payers, but the reality is that much of the burden we face from declining revenue falls on us.
We all have patients in our practices who come in regularly for treatment but cannot pay for the services we provide. We continue to send bills knowing they won’t be paid, yet we continue to provide the services they need. Why? Because the Chiropractor in us wants to help all the patients in our communities regardless of their ability to pay. However, the business owner in us loses sleep at night wondering why we are working more but making less.
It is important for practices to establish policies to determine who is able to pay for chiropractic services. As charitable as chiropractors may want to be, the law does not allow routine write-offs of co-pays and deductibles without risk of violating payer contracts or federal and state laws. If patients have insurance, the practice must document that financial hardship actually exists and should record any fees that are waived. Also, hardship should be assessed regularly, as a patient’s financial condition may change.
Now is the time to review your hardship policy and make sure that it will stand up to scrutiny in an audit situation. Many consultants agree that hardship should be granted to patients who fall within state or federal poverty guidelines. Additionally, taking your patient’s word for it won’t cut it in an audit situation. When documenting financial hardship, the questions are not always easy or comfortable, but it is recommended that the practice gather income tax returns, 1099s, W-2s, as well as the following information:
- The patient’s household income and any garnishments that affect their wages;
- Income from other sources, such as Social Security, unemployment, pension, rental income, investment income or family support;
- Assets such as investment(s), property ownership, cash in bank accounts, and other personal property (cars, expensive jewelry or valuable art); and
- Expenses such as: housing, utilities, food, child support payments, etc. Expenses related to credit cards and nonessential items should not be taken into consideration in this assessment.
Patients who meet the criteria for hardship should be monitored on a regular basis. Hardship should be granted for 30, 60, or 90 days. At the end of the hardship period, the patient will need to reapply for hardship status.
When it comes to uninsured patients, or those with phantom insurance (high deductibles, copays, etc.) that can pay for services, but not at your UCR rates, discounts are possible if done the right way. Having a dual fee schedule (charging UCR to insurance and a lower fee to cash patients) can get you in hot water with third-party payers. This practice can also drive third-party payers to diminish reimbursements to the lowest fee schedule amount.
Offering your patients prompt payment discounts that fall in the range of actual bookkeeping cost can help offset your patients’ out-of-pocket expenses. The caveat here is to keep it reasonable and defensible. If you are offering a 50% discount, yet your billing costs are 10-15%, then you really have a dual fee schedule. If your patients need more help, consider using a Discount Medical Plan Organization (DMPO), such as ChiroHealthUSA, that will allow you to set up discounts as part of a contractual agreement, similar to insurance companies. This allows you the flexibility of offering larger discounts while still abiding by federal and state laws.
Our current healthcare system is not geared toward allowing chiropractors to provide free or highly discounted care to our patients. And as a business owner, free care doesn’t make good sense. A good chiropractor and business owner should have options in place to remain profitable and still give their patients access to affordable care. If it is in your heart to help everyone regardless of ability to pay, then partner with other local providers that may offer services 1 day a week at a local shelter or charitable organization.
When you become a participating provider with ChiroHealthUSA, you may receive a Hardship Policy template at no charge from KMC University. What better way to start the year than with a rock-solid financial policy, options for affordable patient care, and a solid hardship policy. Sounds like the first step to a successful 2019.