Collecting those secondary payments and deductibles? Yes, it is that time again when we are receiving many deductibles being adjusted from our Explanation
by Jane Bunch

Collecting those secondary payments and deductibles?

Yes, it is that time again when we are receiving many
deductibles being adjusted from our Explanation of Benefits. And
this year, we are feeling the effect more than ever.

To make this process run smoothly, make sure to verify that you
have internal processes to get the bills out to your patients or
their secondary insurers in a timely manner. Remember, your
secondary payers have the same timely filing issues as all other
payers, and the last denial you want to see is one for untimely

Do you have a written policy and procedure internally for those
patients who cannot afford their secondary payment? This has become
a big issue with audit procedures, and providers are being asked
for their written policy on hardships by auditors.

What forms do you have in place? Who in your company can make
the decision to approve or deny a hardship form that has been
completed by a beneficiary? If it is denied, who sets up the
payment plan?

Accompanying this article, I am providing you with a sample
template of a policy you need to put in place if you do not have
one. You will need to complete it with your company information and
the selected personnel who will be verifying these forms.

I even suggest you obtain copies of patients' bills and any
“proof” you can obtain to validate the financial
hardship form. Writing off the 20 percent copay or deductible
without appropriate documentation is not allowed and should not be
tolerated within your operation.

Your policy should read as follows at a minimum:

Financial Disclosure Policy

________________(Name of company) utilizes a financial
disclosure form that meets compliance standards set forth by the
industry. It is not the practice of (name of company) to routinely
waive 20% co-insurance amounts for any patients that are on service
or have received services.

Patients are given the choice to complete a hardship form in
the event that the 20% will cost them financial hardship in meeting
their monthly expenses. (Name of company) will determine if the
patient meets the hardship guidelines by utilizing the national
poverty guidelines as a benchmark. (Name of person who will assume
responsibility to approve or deny form goes here) will be
responsible for reviewing the hardship forms and determining if the
patient meets these guidelines.

If the patient is accepted, then the 20% co-pay may be
written off. If the patient is declined, a payment plan will be set
up per the guidelines, on a monthly basis.

Please see the attached form that is currently being utilized
by (name of company). All employees have been educated on this
policy and our form. All sales reps and employees are aware that
advertising to write off the 20% co-pay for referrals is against
the law and will not be tolerated by (name of company).

The national poverty guidelines for 2008 are published in the
Federal Register as shown. You may use these as a baseline
for determining whether a patient meets the poverty/indigent
guidelines. I am not saying you have to go directly by these
figures, but you must develop guidelines and show in your policy
how you determine financial hardships.

I am also going to provide you with a financial hardship form
that has been developed for clients' internal use. Please feel free
to utilize this form or develop your own using this as a

As you can see, there is a lot to this. Many providers do not
have an appropriate policy in place to verify that they are not
routinely waiving the 20 percent copay or collecting the

With the reduction in reimbursement and all of the changes in
our industry, this may be your profit you are giving away. Get to
work and implement these policies and procedures, and educate your
staff accordingly.

2008 HHS Poverty Guidelines
Persons in Family or Household 48 Contiguous States and D.C. Alaska Hawaii
1 $ 10,000 $ 13,000 $ 11,960
2 14,000 17,500 16,100
3 17,600 22,000 20,240
4 21,200 26,500 24,380
5 24,800 31,000 28,520
6 28,400 35,500 32,660
7 32,000 40,000 36,800
8 35,600 44,500 40,940
For each additional person, add 3,600 4,500 4,140
Source: Federal Register, Vol.
73, No. 15, Jan. 23, 2008

Jane Bunch is owner of Jane's Healthcare Consulting based in
Marietta, Ga. A reimbursement specialist, Bunch delivers
educational seminars, helps develop corporate compliance plans and
serves as a consultant for fraud and abuse cases. She can be
reached at 770/366-0644 or by email at