In an effort to further clarify questions raised regarding discounts to the uninsured and underinsured by hospitals, CMS recently posted Frequently Asked Questions ("FAQs") related to hospital billing and collection practices. Generally, questions sought answers to the impact of discounts to the uninsured/underinsured to Medicare reimbursement for bad debt and the beneficiary inducement provision of the anti-kickback statute. The new CMS FAQs clarify that a hospital may be reimbursed by the Medicare program for a Medicare patient's unpaid deductibles and coinsurance amounts, provided that the hospital sends a bill to the patient and engages in reasonable and consistent collection efforts. The agency also provides reassurance regarding the flexibility that hospitals have in developing their own indigency policies. The FAQs remind hospitals that they are permitted to use their own business judgment in determining whether or not a non-Medicare patient is indigent and entitled to a discount pursuant to specific indigency policy. With respect to Medicare reimbursement consequences, CMS clarifies that hospital discounts to non-Medicare patients, such as the uninsured, do not have a resultant impact upon outlier or new technology payments. The agency also specifically provides that offering discounts to the uninsured or underinsured does not affect the hospital's cost-to-charge ratio or Medicare cost apportionment, as long as the provider properly reports its full charges on its Medicare cost report.

The new CMS FAQs on hospital billing and collection practices are available online.