By Keith Pendleton, JD

A major shift is occurring in the health care industry. Deductibles are going up. Insurance is paying for less and less. The number of uninsured is on the rise. 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 the 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, 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 treat insured patients. The concern when it comes to discounting or even waiving the patient-portion-due is that "Hey, doesn't this essentially create a 'split-fee'?" You are wise to now be asking the same question.

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

"But other types of businesses get to offer discounts! Why can't I?" Small problem. Many other types of businesses do not entail payments coming from insurance companies. The point is that in the case of health care, YOUR discount practices can significantly affect the insurance company's pocket book. 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.

By the way, 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 that "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. Lack of participation in managed care is not one of the recognized exceptions.

OK, 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, for years the government has made it clear that health care providers can discount the patient-portion-due based on "financial hardship."

Let's call these "hardship discounts."

Bottom line is that we could sit here and talk about the basic principles of hardship discounts all day long. At the end of the day, you too will be asking – "Uh, so how do I offer a hardship discount?"

Funny you should ask. Recently, while researching this issue, I discovered a very cool resource on Hardship Discounts on the Internet site of the HRSA – Health Resources and Services Administration. See ftp://ftp.hrsa.gov/nhsc/applications/sliding_fee.pdf. According to the U.S. Department of Health and Human Services, 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 published a very specific set of guidelines for assessing, calculating and applying Hardship Discounts. Again, see ftp://ftp.hrsa.gov/nhsc/applications/sliding_fee.pdf. The resource promotes the use of a sliding scale which in turn is based on the Federal Poverty Guidelines. What's more, the resource includes additional resources related to assessing, calculating, and applying Hardship Discounts.

Is the Hardship Discount method safe? Hmmm ... Let me put the question back to you. The HRSA discount methodology and documents were created and published by a branch of the U.S. Department of Health and Human Services. Certainly this is something worth considering, don't you think?

Obviously, as you review the HRSA resource, many questions may arise. Nonetheless, I have to say that this resource is one of the coolest, non-automated resources on the web related to Hardship Discounts. What a great, definitive step forward in an arena which has been so murky for so many.

For those of you who are interested, I will be discussing the HRSA resource in my upcoming seminars – "Self-Pay Seminar (module 1): Step-by-Step Answers & Tools on Discount and Payment Issues." Seminars to commence on October 8th.