Insurance premiums and deductibles are going up and coverage seems to be going down. Even with ObamaCare, there will be plenty of folks out there without insurance or coverage for chiropractic services. The shift, referred to by some as the “rise of the self-paying patient”, is creating nothing shy of a crisis for many health care providers.

One of these issues, for example, relates to discounts, i.e. discounting the patient-portion-due. A lot of providers are being tempted to discount, or even waive entirely, the patient-portion-due as a way of making care more affordable for their patients. Bear in mind that it has always been well understood in the community that providers who treat insured patients must be very careful not to offer “split-fee” schedules if they also treat uninsured patients. The concern is that discounting the patient-portion-due creates a “split-fee”.

Over the past decade another concern has arisen. Discounting the patient-portion-due can also cause a provider to run afoul of the “anti-inducement” law. What does this mean? It basically says that offering discounts to the patient can amount to a financial kickback, likely to induce the patient to receive a course of care which the insurance carrier must now pay for. In other words, the “split-fee” laws are not the only concern anymore. Anti-kickback and inducement laws take the issues of discounts and waivers to a whole new level.

"But other types of businesses get to offer discounts! Why can’t I?” It is a different matter. Many other types of businesses do not entail payment from insurance companies. In the case of health care, your discount practices can significantly affect the insurance company’s purse. For this reason, the insurance industry has lobbied (successfully, mind you) for the adoption of federal and state laws which regulate how and when you can discount your fees.

The concerns mentioned above apply to any health care provider who treats insured patients – even those who don’t participate in managed care plans. Put another way, the argument, “I don’t participate with insurance,” is no excuse. The minute you accept and treat insured patients, split-fee and anti-inducement laws kick in and you have opened the fabled Pandora’s box. Lack of participation in a managed care network is not one of the recognized exceptions.

Okay, enough of the negative stuff. Let’s talk solutions. Yes, the federal government has made it clear that there are safe ways to discount the patient-portion-due. For instance, the government has made it clear for years that health care providers can discount the patient-portion-due based on “financial hardship.” Let’s call these “hardship discounts.” We could discuss the basic principles of hardship discounts all day long, but at the end of the day you, too, will be asking, “So how do I offer a hardship discount?” Funny you should ask. According to the U.S. Department of Health and Human Services (HHS), the HRSA is the “primary Federal agency for improving access to health care services for people who are uninsured, isolated or medically vulnerable.”

To make a long story short, the HRSA has published a very specific set of guidelines for assessing, calculating and applying hardship discounts. The resource promotes the use of a sliding scale which, in turn, is based on the Federal Poverty Guidelines. Furthermore, it includes additional resources related to assessing, calculating, and applying hardship discounts. Is the hardship discount method safe? Let me put the question back to you. The HRSA discount methodology and documents were created and published by a branch of HHS.

Certainly this is a standard worth considering, don’t you think? Obviously, as you review the HRSA resource, many questions may arise, but I have to say that this is one of the best and free non-automated resources on the web related to hardship discounts. It is a great, definitive step forward in an arena which has been so murky for so many.

Originally written by Keith Pendleton JD for Hot Topics, August 2008. Updated by Evan Gwilliam DC.