File Code Number: 09.01

USF College of Medicine/USF Physicians Group

Policy on Adjustment of Charges, Professional Courtesy and Discounts

Introduction

This policy statement has three parts. Part I contains the rationale for the policy. Part II contains a general statement of USF College of Medicine/USF Physicians Group policy regarding the adjustment of charges, professional courtesy and discounts. Part III contains the procedures to be used by all COM/USFPG physicians and staff to implement the policy.

1.Rationale for Policy.

The USF College of Medicine (COM) is a unit of USF, an institution in the State University System of Florida. The clinical practice of USF COM faculty physicians is an integral part of their assigned duties as COM employees. The USF COM Faculty Practice Plan organization, University Medical Service Association, Inc. (UMSA), which has been authorized by the Florida Board of Regents to perform the billing, collection, and administration of funds generated by the clinical practice of COM faculty physicians, is a Florida non-profit corporation exempt from federal income taxation under Section 501 (c) (3) of the Internal Revenue Code. USF COM assets, including facilities, supplies, human resources, and UMSA funds and accounts receivable, must be used exclusively for purposes supportive of the mission of the COM, and must not be used to provide impermissible benefits to private individuals.

In addition, the traditional prerogative of physicians to provide medical care to their physician colleagues and other patients free of charge or at a reduced rate has been curtailed significantly by federal and state laws. In summary, these pertinent legal requirements include the following:

  • Under Florida law, it is a criminal offense and grounds for disciplinary action by the Board of Medicine for a physician to present to an insurer, health maintenance organization, or other third party payor a “false claim” for payment. The law defines “false claim” to include any claim or bill which does not specifically disclose any agreement made or understood to exist in advance of the provision of health care services between the health care provider and the patient to waive in whole or in part that patient’s payment of the co-payment or deductible amount or to give the patient a discount for the payment of fees for services rendered. The third party payor may consider such disclosed agreement in determining the actual or usual and customary charge for reimbursement purposes.
  • Under federal fraud and abuse (“Anti-Kickback”) laws pertinent to the Medicare/Medicaid programs, it is a criminal offense and grounds for civil sanctions including monetary penalties and exclusion from participation in the Medicare/Medicaid programs for a physician to waive coinsurance or deductible amounts, or to transfer items or services for free or other than fair market value, for Medicare/Medicaid patients, except under narrowly defined circumstances such as where there is a failure to collect after making reasonable collection efforts or there is a good faith determination that the patient is in financial need. In addition, the presentation of a claim for payment by Medicare/Medicaid where there is a concomitant waiver of coinsurance and/or deductible amounts may subject a physician to civil and criminal penalties under the Federal Civil False Claims Act.
  • Under the federal laws pertinent to physician self-referral (“Stark II”), it is grounds for civil sanctions including monetary penalties and exclusion from participation in the Medicare/Medicaid programs for a physician to refer Medicare/Medicaid patients to another physician, or to bill Medicare/Medicaid for services rendered to patients who have been referred by another physician, where is a “compensation arrangement” between the physicians, except under certain narrowly defined circumstances. The broad definition of “compensation arrangement” to include any remuneration, direct or indirect, overt or covert, in cash or in kind, between a physician (or an immediate family member of such physician) and another physician, would encompass the provision of care to physicians and their immediate family members free of charge or at a discounted rate.
  • The provision of medical services by USF Physicians to other USF Physicians and other USF employees free of charge or at a reduced rate may constitute the provision of a taxable fringe benefit subject to reporting and withholding requirements of the Internal Revenue Code.
  • The waiver of coinsurance and deductible amounts is frequently prohibited by the terms of insurance policies and contracts between third party payors and health service providers. The violation of such provisions can result in various actions by the payor (such as claim denial, contract termination, and civil suit for monetary damages), and may also give rise to criminal fraud liability under federal and state laws.

The USF College of Medicine/Faculty Practice Plan Compliance Plan reaffirms the COM’s commitment to ensure compliance, by the COM, COM affiliated support entities, USF Physicians, and other responsible personnel, with all laws, rules, and standards of conduct which are applicable to official duties and acts, including the delivery of health care services and the billing and collection of revenue derived from such services. Accordingly, the purpose of this policy statement is to implement the requirements of federal and state laws relevant to the waiver or reduction of professional charges for patient services provided by USF physicians.

2.General Policy.

A charge should be posted for every service. COM/USFPG policy is that all USF Physicians will complete a charge document for every service rendered, which will result in the generation of charges based upon the uniform USFPG Fee Schedule. No service should be rendered without completing the charge document, and no adjustments to charges should be made except as described in section 2.1 below.

2.1.Adjustment to charges. The following adjustments to charges are permitted by COM/USFPG policy:

2.1.1.Financial Hardship. The Patient Accounts Department may adjust patient accounts in accordance with the USFPG/UMSA Policy on Financial Hardship.

2.1.1.1.Charity - pre-billing. The code “AB-C” (adjust bill, charity) may be indicated on the charge document by the physician, departmental business manager, or other appropriate clinical department personnel only when a determination has been made prior to billing that the patient is in financial need. When the AB-C code is indicated on the charge document, the Patient Accounts Department will review the account for adjustment in accordance with the USFPG/UMSA Policy on Financial Hardship.

2.1.2.Administrative - pre-billing. The code “NB-A” (non-billable, administrative) may be indicated by the physician, departmental business manager, or other appropriate clinical department personnel only when deemed appropriate for risk management purposes. Such adjustments for risk management purposes require the concurrence of the department chair or chief of service, and will include consultation with the USF HSC Self-Insurance Program.

2.1.3.Administrative - post-billing. The code “WO-A” (write-off, administrative), with associated IDX paycodes, may be indicated by the physician, departmental business manager, Patient Accounts Department management staff, or other appropriate clinical department personnel only where either (i) reasonable collection efforts have failed to produce a reasonable prospect of payment. That which constitutes “reasonable collection efforts” will vary depending upon the amount due and other factors, but for amounts in excess of $5.00 includes the passage of a least 90 days since the date of the original statement; or (ii) the physician, departmental business manager, or other appropriate clinical department personnel has determined non-collection to be appropriate for risk management purposes only. Such adjustments for risk management purposes require the concurrence of the department chair or chief of service, and will include consultation with the USF HSC Self-Insurance Program.

2.1.4.Administrative -contractual adjustments. Medicare, other public health benefit programs, and many private managed care plans pay for services provided by COM/USFPG on a pre-determined or negotiated fee schedule basis. Adjustments to charges to such public and private payers are made post-billing by Patient Accounts Department payment posting staff, using the appropriate contractual adjustment paycode.

2.1.5.Small Balance Adjustments. The Patient Accounts Department may adjust small account balances in accordance with the USFPG/UMSA Policy on Small Balance Adjustments.

2.2.Other adjustments are not permitted. The following practices are not permitted by COM/USFPG:

2.2.1.“Professional Courtesy.” The practice of granting professional courtesy (waiver or reduction of charges) to physicians, their families, employees, other professionals or friends is against COM/USFPG policy and should not be used. As described in Section 2.1 above, adjustments to charges may be used to accommodate cases of true financial need.

2.2.2.“Insurance Only” and “Insurance Only Including Deductible and Co-Payment”. Waiver of collection of deductibles, coinsurance, or co-payments is against COM/USFPG policy and should not be used.

3.Procedures.

3.1.A charge based upon the uniform USFPG Fee Schedule should be posted for every service rendered. The charge for certain services included within a global fee, e.g., post-operative office visits, will be zero.

3.2.No service should be rendered without posting a charge based upon the uniform USFPG Fee Schedule, and no adjustments should be made except as described in Section 3.3 below.

3.3.Enter the following primary adjustment codes only as described below:

3.3.1.Financial Hardship. The Patient Accounts Department will enter the appropriate adjustment codes for patient accounts which are adjusted in accordance with the USFPG/UMSA Policy on Financial Hardship.

3.3.2.Non-billable-code “NB” or Adjust Bill code “AB”: may be entered by the physician, departmental business manager, or other appropriate clinical department personnel only when a determination has been made prior to billing that either a charitable or administrative adjustment should be requested to be made in the circumstances described in Section 2.1 of this policy.

3.3.3.Write-off-code “WO”: may be entered by the physician, departmental business manager, or other appropriate clinical department personnel only when a determination has been made after a charge has been billed that either a charitable or administrative adjustment should be requested to be made in the circumstances described in Section 2.1 of this policy.

3.3.4.Contractual adjustment: the appropriate contractual adjustment paycode will be entered by Patient Accounts Department payment posting staff after billing and payment by Medicare and other public and private health benefit programs with which COM/USFPG had agreed to accept payment on a fee schedule or other discounted basis. The contractual adjustment code may not be used to adjust or write off co-payment or deductible amounts.

3.4.Primary adjustment codes NB, AB, and WO must be accompanied by one of the following modifiers:

3.4.1.Charitable adjustment-modifier “-C”: To be used only where the patient has no health insurance or other third-party coverage and/or is in financial need. When the “C” modifier is indicated, the Patient Accounts Department will review the account for adjustment in accordance with the USFPG/UMSA Policy on Financial Hardship.

3.4.2.Administrative adjustment - modifier “-A”: To be used only where either:

(i)Reasonable collection efforts have failed to produce a reasonable prospect of payment. What constitutes “reasonable collection efforts” will vary depending upon the amount due and other factors, but for amounts in excess of $5.00 includes the passage of at least 90 days since the date of the original statement; or

(ii)The physician, departmental business manager, or other appropriate clinical department personnel has determined non-billing or non-collection to be appropriate for risk management purposes only. Such adjustments for risk management purposes require the concurrence of the department chair or chief of service, and will involve consultation with the USF HSC Self-Insurance Program.

3.5.Failure to complete the charge document for every service rendered or adjustment of a charge for any reason other than as described above is against COM/USFPG policy.

4.Pre-Collection Referral Review.

When a self-pay patient balance reaches the age of 90 days since the date of the original statement, it will be considered for referral to an outside collection agency. COM/USFPG policy is to notify the physician(s) of such patients prior to collection referral in order to afford the physician(s) the opportunity to request the administrative adjustment of the account as permitted by Section 3.4.2. (i) above. Concurrent with the issuance of the third statement to the patient by UMSA Patient Accounts, UMSA Patient Accounts will send the physician a report including the following information: patient name; patient account number; date of service; amount of original charge; balance owed on original charge; total aged balance owed to UMSA (including balances owed for services provided by other physicians). The physician will have a period of ten days to respond to this report; the “respond by” date will be indicated on the report. The physician must respond to the report only if he/she wishes to request the administrative adjustment of the balance owed for services provided by such physician. If the physician does not respond to the report, the balance will be referred to an outside collection agency.

1

G:\COM\Compliance\POLICIES and PROCEDURES\PandP USFPG\Approved COM USFPG Policies\Policy on Adj of Chgs Prof Courtesy and Discounts\POLICY 09.01 Adj of chgs Prof Court and Discounts.doc

Approved at the 9/27/99 Executive Committee/Boards