Submitted on Tue, 2014-11-18
By Bonnie Lu

Every public health billing department should take a close look at their fee schedules to make sure they are collecting the maximum amount of revenue.

3 Key Steps to Setting Up a Hardship Policy

In part 1 of this series, we discussed how private health insurance companies often reimburse public health departments at a higher rate than Medicare and Medicaid. Every public health billing department should take a close look at their fee schedules to make sure they are collecting the maximum amount of revenue.

But what can safety-net providers do about patients who cannot afford the new fees?

The best way to address this is to create a hardship policy with a sliding fee schedule. The sliding schedule is a set of discounts applied to the health department’s fee schedule. The discounted fee schedule is up to the individual health department but must be in writing, be a uniform policy, and non-discriminatory.

If a policy already exists at your health department, now is a great time to review it and make sure it’s working correctly for your organization.

There are 3 key steps in setting up a hardship policy:

1. Establishing a Discounted Fee Schedule

Health departments can establish a discount by basing it on incremental percentages from the Federal Poverty Guidelines (FPG). Sliding fee schedules apply to patients falling between 101%-200% of FPG and health departments can set the pay classes by household size. Pay classes are in increments of 10%, 25%, or a percentage your health department feels is best for your community and clinic.

For patients falling at or below 100% FPG, health departments can continue to be their safety-net provider by not charging any fees for their service or by charging a very nominal fee.


2. Determining Eligibility

Patients interested in a discount should complete a sliding fee application to determine their eligibility.

Agencies can choose to accept the patient’s word or require income verification such as tax returns or current pay stubs. Other sources of patient verification may be the receipt of public assistance programs such as Social Security income (disability), temporary assistance for needy families, or free or reduced school lunch program.

Health departments may want to take other sources of income into consideration such as alimony, child support, and rent.

The application should also note which services are included and excluded so patients understand their financial obligations.


3. Recertifying Patients

Patients should understand how long their hardship discount will be honored for, whether it is for their current visit, for six months or even for a year. Patients should be recertified on an annual basis to make sure they still qualify for discounted services.

Once a hardship policy is established, health departments should place signage or post a notice on their websites so that patients are aware that a sliding fee scale is available to those who are experiencing financial hardship.

Implementing a sliding fee scale policy, in conjunction with an updated fee schedule, will allow health departments to be the safety-net provider for those in need while maximizing revenue opportunities from private payers.


Do you have any thoughts or best practices when it comes to developing hardship policies? We would love to hear about them. Simply contact one of our public health billing experts or schedule a meeting to share your feedback and discuss best practices for fee schedules, hardship policies and all of your public health billing questions.

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