We have a long way to go before the world returns to normal (or some semblance of normal), but we have come a long way. According to this report unemployment fell to about 8.4% in August, according to the Bureau of Labor Statistics. This is significantly better than the 14.7% unemployment rate reported in April– but there is still a large number of unemployed (and therefore uninsured) in the United States. For the 8.4% of working adults who are unemployed, money is limited and health care coverage is often non-existent, but that doesn’t mean their need for care is gone. These patients could theoretically seek health services for a fee in cash, but many of them are chargeable.
So how can you, as a supplier, establish a cash fee schedule that both serves a struggling community and pays the bills? Keep reading to find out.
1. Calculate your treatment costs.
The first step in creating a cash fee schedule (especially one that serves patients who are struggling financially) is to calculate the bare minimum cost of providing treatment in your clinic. (Yeah, you gotta do some math. Sorry about that!)
Start by accounting for all your annual, fixed and flexible expenses. Factor in rent, loans, salaries, employee health costs, taxes, equipment purchases (eg, masks and TheraBands), and any other business expenses you can think of. Remember to include a small cushion for emergencies. Heidi Jannenga actually recommends that every “business, whatever its size, should have an emergency cash reserve of three to six months”.
Now that you know your need minimum gross income, “Divide that by the number of weeks you expect to work in a year, including vacation and personal time off.” The number you get is your gross weekly income. Then divide that amount by the number of patients you can realistically see in a week. “If you have other therapists in your clinic, remember to consider the carrying capacity of their patients.
You should end up with an average dollar amount per visit that, at a minimum, will keep your clinic doors open. So that’s your minimum visit fee paid in cash.
In this step, allow time to research what other vendors are in your local market billing for cash services. Finding a range of what they charge (say, between $ 80 and $ 140) will help keep your fee schedule competitive and in line with demand. Additionally, your competitors may have already made their own plans for dealing with financially insecure patients, and they could give you some ideas on how to manage your clinic’s fee structure.
2. Create and stick to a financial hardship policy.
Now that you have an idea of what you need to charge to keep your clinic open while remaining competitive in your market, it’s time to set some prices and, more importantly, create a policy of financial hardship. Now keep in mind that I am not a lawyer, but to my understanding, you are generally allowed to provide health services at reduced or different prices to uninsured patients if you create a uniform method of billing these patients (for example, a clear policy on financial hardship).
It’s up to you to decide what this hardship policy looks like. You could offer:
- a flat-rate reduction for unemployed patients;
- a reduction for patients who pay in full on the date of service;
- discounts for a fixed period (for example, two months), such as this supplier suggests; or
- a more flexible pricing system (ie a mobile pricing schedule).
Sliding fee schedules
A mobile price list is more or less what it sounds like: a fee schedule that changes based on the patient’s current income. Many vendors use the U.S. Federal Poverty Guidelines to define their scale. For example, patients who are at or below the federal poverty guideline in their state would pay the lowest rate you are willing to offer. Patients earning more than double the guideline would pay the next highest rate, those earning more than three times the guideline would pay the next highest rate, and so on, until you hit your mark. regular rate of pay in cash the amount that would cover your expenses and allow you to profit).
Now, while a mobile price plan can be an excellent financial tool, it is far from perfect. Meredith Castin warns that Sliding-scale payment systems “are difficult to apply and can cause serious billing problems. Additionally, patients may talk to each other and begin to feel what they perceive to be unfair treatment. ”
Request for financial hardship
Regardless of how you choose to craft your financial hardship policy, you will want to include a financial hardship claim that patients must complete to confirm they are eligible. This application must include:
- a quick overview of the financial hardship policy,
- an explanation of how to qualify,
- a list of documents required to qualify (e.g. proof of income, family household or size, etc.), and
- your price list.
Presenting everything in simple, easy-to-understand terms will help streamline the process and avoid misunderstandings. Keep in mind that while it is a good idea to verify that patients are eligible for your services at a discount or different prices, you don’t want to make the process too cumbersome.
3. Check your legal boxes.
I spoke about this before in section two, but it bears repeating: to my knowledge (and again, I’m not a lawyer), offering services at reduced or different prices to uninsured patients is generally acceptable, provided that a uniform discount model is created.
That being said, be careful not to inadvertently offer a discounted or different price service to an insured patient without first reviewing the insurance rules. Insured patients (especially Medicare beneficiaries) are subject to different guidelines. Some payer contracts prohibit providers from undercutting their reimbursement rates, and Medicare has its own set of strict cash payment rules. In addition, some states have laws to provide services at reduced or different prices to patients. While these rules generally apply to insured patients, it is always a good idea to consult a legal expert who is familiar with the laws in your area to make sure you are in the green.
And yes, I get it: handing out a lot of money to talk to a lawyer might seem like a frivolous expense right now, but it’s a lot cheaper than ending up in a costly lawsuit due to fraud or pot violations. -of-wine.
Money is limited right now for many people, but the need for medical care continues. By creating a fee schedule that takes into account financial hardship, your practice can help meet this need during a very difficult time. I think it’s worth it; not you?