HRSA Issues Much Anticipated Sliding Fee Discount Program Policy

On September 22, 2014, HRSA issued the much anticipated final policy on “Sliding Fee Discount and Related Billing and Collection Program Requirements” (Policy Information Notice #2014-02). The new policy, which applies to grantees and FQHC Look-Alike entities, clarifies various aspects of the Sliding Fee Discount Program (SFDP), as described below in detail, and was effective upon publication. In addition to the new PIN, HRSA also issued a document in which it responds to the comments submitted on the draft PIN. With this issuance, the PIN is now the primary policy resource for health centers for the development and application of the SFDP. Thus, it supersedes all prior guidance issued with respect to this specific matter.

In general, the PIN clarifies that the main focus of the SFDP is to minimize financial barriers to care; thus, neither the fee & discount schedules nor the operational procedures (including eligibility verification and billing & collection) should create barriers. As an element of the Board of Director’s responsibility to ensure access to care, the full board must approve the policies upon which all components of the health center’s SFDP are based and must periodically review the entire program (not just the sliding fee discount schedule). This includes:

  • Required (“must’) components of the SFDP (e.g., eligibility and verification requirements; the structure of the sliding fee discount schedule; billing and collection policies; policies to waive/reduce fees to ensure access); and
  • Discretionary (“may”) components (e.g., alternative mechanisms for determining eligibility such as self-declaration; nominal charges rather than full discount; multiple discount schedules; application of discounts to treatment-related supplies & equipment; “alternative” collection policies such as cash & prompt payment discounts and payment plans; discharge for refusal to pay).

Policy clarifications addressed in the new PIN include (but are not limited to) the following:

Sliding Fee Discount Schedule (SFDS)

  • Each health center must establish a sliding fee discount schedule(s) that applies to all services furnished within the center’s federally-approved scope of project for which a charge has been established, whether the services are required or additional and regardless of the type of service or mode of delivery.
  • Income and family size are the sole factors to be considered when determining eligibility for the SFDS. While the board has discretion in defining “family” and “income,” additional factors such as population type and insurance status, cannot be considered. In particular, health centers cannot require patients to apply and be turned down for insurance prior to accessing the SFDS, nor can health centers provide a “blanket” waiver of fees for all individuals who belong to a special population such as homeless individuals and families. Rather, the applicable SFDS must be applied uniformly to all patients who qualify based on income and family size.
  • The structure of the SFDS must include at least three graduated “pay classes” between 101% – 200% of the then current Federal Poverty Guidelines (FPG). Health centers have discretion to determine whether the charge for each discount pay class will be based on a percentage of the fee schedule or a flat fee.
  • While individuals and families whose annual incomes exceed 200% of FPG are not eligible for SFDS, health centers receiving or having access to other non-330 funding sources that include discounts for patients above 200% (such as Ryan White funds) may reduce such patients’ payments accordingly by allocating all or some of the charge to such other source.
  • Health centers may charge a nominal fee (rather than offer a full discount) to individuals and families whose annual incomes are at or below 100% of FPG. Nominal fee is defined as a fixed flat rate fee that should not reflect the value of the service provided and should be considered nominal from the patient’s perspective. The PIN explicitly states that the nominal fee is not a threshold for receiving care and thus, is not a minimum fee or co-payment.
  • If a patient is informed about the availability of the SFDS and chooses not to provide the required eligibility verification information, health centers may choose to deem the patient ineligible and charge them full fee (provided this policy is applied uniformly).

Referral Arrangements, Cost Sharing and Supplies &Equipment

  • Services provided by formal written referral arrangements that are considered “in-scope” (i.e., are included on Form 5A under Column III) must include discount schedules that conform to the structural requirements outlined in the PIN and nominal charges that meet the definition in the PIN.
  • If a patient’s cost-sharing amount (for individuals whose insurance does not fully cover the fees for certain services) is more than the amount he/she would have been charged as an uninsured patient on the SFDS, at a minimum, the health center must reduce the cost-sharing amount for such patient to the applicable SFDS level (subject to any contractual limitations). Health centers may provide further discounts in their discretion.
  • Health centers that provide treatment-related supplies and equipment that are charged separate from the actual service (such as dentures, crowns, eyeglasses, prescription drugs, etc.) should discount such items but may do so based on a structure that is different from the SFDS. In particular, health centers can set prices to recoup their costs, even if greater than the “regular” discount rate, provided that patient access is supported and the center has provisions in place to waive or reduce fess as necessary to ensure such access.

Billing & Collection Policies

  • Health centers must establish policies and procedures that identify circumstances under which fees will be reduced or waived to ensure access.
  • Health centers may offer prompt payment or cash payment discounts as payment incentives, provided that these discounts are available to all patients regardless of income level or SFDS pay class, and are applied uniformly.
  • Health centers may establish policies to discharge patients for refusal to pay amounts owed, provided that discharge is the “last resort” after reasonable collection efforts are made. At a minimum, the policy should define “refusal to pay” and identify how determinations will be made and what collection actions will be taken prior to discharge.

Several sections of the new PIN still require additional clarification. For example, it is unclear whether a referral provider’s discount policy has to comply with the graduated pay class requirement or simply meet the regulatory eligibility requirements (as indicated in the current Scope of Project Policy – PIN #2008-01). Further, the section on treatment-related supplies and equipment requires additional clarification regarding the depth of required discounts. The requirement to apply prompt or cash payment incentives to all patients also requires further discussion regarding its application to individuals with low co-payment amounts (such as traditional Medicaid co-payments).

Also unclear is the extent to which health centers currently noncompliant with some of the new interpretations will receive grant conditions, given the immediate effectiveness of the PIN. Accordingly, all health centers are strongly urged to review the PIN and proceed with revisions necessary to come into compliance as soon as possible.

HRSA has indicated that it plans to address concerns and additional clarifications through the publication of “rolling” Frequently Asked Questions (FAQs). Health centers are encouraged to submit their concerns and questions to HRSA, either individually or through their respective Primary Care Association (PCA) or through NACHC. NACHC will be submitting requests for clarification within the upcoming weeks. Please do not hesitate to contact either your PCA or NACHC should you have any questions on this or any other issues.

HRSA’s September 3, 2014 Weekly Digest Includes Clarifications Regarding HRSA’s Role in Monitoring

On September 3, 2014, the weekly HRSA Primary Health Care Digest included two clarifications regarding HRSA’s role in financial and programmatic monitoring. With respect to the former, HRSA will no longer require submission of Financial Recovery Plans as the formal monitoring of financial performance. HRSA stressed that while it will continue to assess health center compliance with financial management requirements (including submission of an annual audit), it believes that financial viability is an individual health center responsibility. As for the latter, HRSA also addressed the reduction of health center grants for projects that fail to meet the proposed patient projections upon which the grant amounts were based. The reduction of funds was first addressed in the FY 2015 Service Area Competition (SAC) applications, as summarized in this Policy Shop blog from earlier this year. In this regard, HRSA will no longer impose grant conditions when health centers do not meet patient projections – going forward, a reduction in funds through the SAC process will be the remedy for failure to meet projections.

Effectively, these changes to internal policies indicate a shift by HRSA to hold health centers to a greater level of individual health center accountability by eliminating certain interim steps for non-compliance findings. Previously, both financial recovery plans and conditions for not meeting patient projections would have been considered interim measures that could be taken in lieu of and prior to more severe sanctions (potential de-funding / re-competition of existing grants and reduction of grant amounts, respectively). These actions appear to align with the approach taken by HRSA in Policy Information Notice (PIN) 2013-01: Health Center Budgeting and Accounting Requirements, in which HRSA indicated that use of non-grant funds was an individual health center responsibility (rather than subject to HRSA control), provided that expenditures comply with the statutory limitations set forth in Section 330. Further, these actions are consistent with an overall “hands-off” approach discussed by HRSA management during the recent NACHC Community Health Institute – shifting responsibility for individual projects from HRSA to the programs themselves.

To assist with best practices in financial planning and in establishing patient projections, HRSA suggests that health centers contact their State and Regional Primary Care Associations and National Cooperative Agreement organizations. Please do not hesitate to contact NACHC or your PCA is you have any questions regarding these issues.

HRSA issues PAL on Updated Change in Scope Process

On August 28, 2014, HRSA issued Program Assistance Letter #2014-10: Updated Process for Change in Scope Submission, Review and Approval Timelines. The PAL expands on clarifications in PAL 2013-03, issued last year, and applies to both grantees and FQHC look-alike entities. Specifically, the PAL clarifies the following timelines:

  • Submission of Complete Change in Scope (CIS) Requests. Health centers should submit complete CIS requests (i.e., requests that include all information requested by HRSA) at least sixty (60) days prior to the desired implementation date. HRSA will notify the health center of its final decision within sixty (60) days of receiving a complete request.
  • Requests for Additional Information. If necessary for evaluation of the CIS request, HRSA may request additional or clarifying information through a “Change Request” in the EHB. In those cases, HRSA may extend the review process beyond the sixty (60) day time frame to account for the time necessary for the health center to submit, and for HRSA to review, the additional information.
  • Other Review Process Extensions. HRSA also may extend the sixty (60) day review if additional analysis is necessary, regardless of whether additional information is submitted. Examples include situations that require a service area overlap analysis.
  • Deactivation of Inactive CIS Request. If a CIS submission is initiated but not completed by the grantee within sixty (60) days or if the health center does not respond to a request for additional information within sixty (60) days of the request, HRSA will “deactivate” the CIS request. If the health center wants to proceed with the request, it will be required to submit a new CIS request.

In a change from existing policy, the effective date for a CIS will no longer reflect the date that a complete request was received by HRSA. Rather, the effective date will be the date that BPHC recommends approval of the CIS request. Grantees will receive a Notice of Award approving the CIS, while FQHC look-alikes will receive notification of the approval via the EHB. If the request is not approved, HRSA will inform the health enter via EHB notification.

Finally, the PAL reflects existing policy regarding implementation – health centers are required to implement an approved CIS after the effective date but within 120-days of receiving approval and must verify through the EHB that such implementation took place. HRSA emphasizes that the verification step must be completes to be officially documented in the health center’s scope of project.

Please do not hesitate to contact us should you have any questions on this or any other issues.

Are You Ready? NACHC Offering Trainings on Medicare FQHC PPS

As you all know, CMS published a final rule on the Medicare Prospective Payment System for Federally Qualified Health Centers (FQHCs) as mandated by the Affordable Care Act. The final rule is estimated to increase the ability and capacity of FQHCs to provide essential and affordable services by increasing Medicare payments.

The new payment system will be implemented beginning on October 1, 2014. FQHCs will be transitioned to the new payment system throughout 2015.

Are you ready for these changes? It is essential that you implement these changes correctly the first time as the stakes are extremely high!

Have you considered these factors for the implementation process?

  1. If you implement the new Medicare PPS rule correctly, your health center stands to increase its revenue substantially.
  2. If you implement incorrectly, you risk not only leaving money on the table, but also scrutiny from CMS for setting your rates too high (or too low).
  3. This rule has significant impact on your grant – particularly as to how your sliding fee scale is applied to patients. All Health Centers must understand and prepare for these changes.

It is important to implement the new Medicare PPS rule correctly the FIRST time!

To assist you with this process, NACHC has developed a one-day hands-on training that will assist you with this process with the first training scheduled for September 3 and 4 in Chicago, IL.

It is not too late to register for the September 3 or 4 session in Chicago, IL and implement correctly on October 1!


HRSA Issues Revised and Updated FTCA Manual

On July 21, 2014, HRSA issued a new Federal Tort Claims Act: Health Center Policy Manual – which updates and supersedes the prior manual (PIN 2011-01), as well as a Program Assistance Letter (PAL) explaining the updates and modifications (PAL 2014-09). The new updated manual reflects an expansion in Federal Tort Claims Act (FTCA) coverage for certain services provided to non-health center patients, which was published as a final rule in the Federal Register on September 23, 2013.

Specifically, Sub-section I.C.4 of the manual expands FTCA coverage to include services provided to non-health center patients experiencing certain individual emergencies, provided that the health center provider is furnishing (or is about to furnish) FTCA covered services within the center’s scope of project and is asked to temporarily assist in an individual emergency situation at or near the provider’s location. This could include, for example, situations under which a health center provider is rounding a hospitalized health center patient and asked to assist with an emergency occurring with another inpatient who is not a health center patient. To be eligible for coverage, HRSA requires the health center to have documentation verifying that the provision of such individual emergency treatment is a condition of the provider’s employment at the health center. According to the manual, documentation could include “employee manual provisions, health center bylaws, or an employee contract.”

Sub-section I.C.4 also clarifies that: (1) FTCA coverage is available when, on behalf of the health center, a health center provider conducts or participates in health fairs and immunization campaigns (previously, coverage was available when the health center conducted those activities directly but it was unclear whether FTCA extended to participation in a health fair or immunization campaign conducted by another organization); and (2) the covered immunization campaigns include immunizations provided to both children / adolescents and adults. Both of these clarifications were published in the September 2013 final rule and update prior policy published in the Federal Register in 1995.

Finally, the new manual updates certain links and contact information. Specific updates include the following:

Sub-section I.G. The Deeming Application Process: provides an updated link to information on deeming applications.
Sub-section II.J. Overview of Claims Filings & Section III Appendix: provides updated contact information for the General Law Division within the Office of the General Counsel of the Department of Health and Human Services.
Endnotes 6 and 9: provide updated links to the Bureau of Primary Health Care Policy Website