Treating the Uninsured?

When she launched her first solo practice, Geeta Khare, MD, knew she wanted to have some way of treating patients who couldn’t afford her services. She’d been disappointed, she says, by the failure of her previous group to develop a comprehensive policy on charity care, and she considers such work part of her responsibility as a physician.

But once she opened her new office in Panama City, Fla., the allergy and asthma specialist quickly discovered the surprising challenges of trying to offer free or discounted care to those in need. Just figuring out which patients were genuinely needy was one hurdle. Another: making sure her efforts didn’t run afoul of federal law, Medicare policies, or her payer contracts.

“We have a fair amount of uninsured and underinsured here - people with huge deductibles or copayments that they just can’t afford,” Khare explains. She applied to treat Medicaid patients but the credentialing process was dragging on. “I wanted to find a way to offer care in an organized way that wasn’t a hodgepodge. And I also knew I could get in trouble if I didn’t do this in an organized way.”

Play by the rules

Trouble? For providing healthcare services to the poor at one’s own expense? It’s sad but true: Physicians with charity care programs must be careful to avoid the appearance that they are breaking anti-kickback rules by offering financial incentives, in the form of free or reduced-price care, in order to induce referrals. They must also be careful not to devise programs with loose enough eligibility criteria that their offices become swamped with indigent patients. Not only would that be bad for business, it might also encourage payers to suggest that the discounts being provided to the poor constitute the physician’s “usual customary fee,” and to demand their volume discount based on that fee.

Moreover, if physicians are offering discount care to poor-but-insured patients, they’d better be careful not to do so in a way that violates their contracts with payers. For instance, most contracts prevent physicians from discounting only the patient’s portion of the bill or waiving copays.

Healthcare attorney Paul Gillan recognizes the irony, and sympathizes with physicians who worry that doing good means they won’t be able to do well. It’s ridiculous, he says, to place obstacles between patients who need care but can’t afford it and physicians who are willing to provide it.

“It’s frustrating,” says Gillan, who practices in Albany, N.Y. “It just shouldn’t be this hard to help people out with a bill. But there it is. And obviously physicians need to be aware of these things.”

An attorney helped Khare devise her office’s policy, which is to provide care free to uninsured patients below the federal poverty line (see chart, page 47) and at a sliding discount to those with incomes as high as 150 percent above the poverty line. Using federal poverty rates as a guide is a common tool for practices devising charity care policies, and healthcare lawyers endorse it.

In determining her income thresholds, Khare says she compared federal poverty rates with Florida’s and studied local median incomes; such figures are available at www.census.gov. “In my case it was pretty consistent with the federal standards,” she says.

Khare’s policy requires interested patients to fill out some paperwork, and to document that they meet the income requirements. Patients must also state that they are not covered by any insurance.

Protect yourself

Policies such as Khare’s are common in medical practices, but they tend to be little-known, since most offices don’t - and shouldn’t - advertise them. If you want to offer free or reduced-price care to low-income patients and the uninsured, experts say you should take several steps to protect yourself.

First, have a written policy that governs who is eligible for a discount, and how much of a discount you’re willing to give. Your eligibility requirements should be reasonable and realistic for your community. Make sure you stick to the policy and update it every year or so. You shouldn’t offer any discounts to insured patients without checking your payer contracts, and whatever discount you give must be applied to the whole bill - not just the patient’s portion.

There are many practices providing free or reduced-price care in a smart, organized way, but many others are doing it haphazardly, exposing themselves unnecessarily to business and legal risks. If that sounds like you, or if you’d like to provide charity care but have been afraid to, Gillan maintains it’s really not that difficult. (He offers more detailed practical advice in a Q&A starting on page 50.)

Join a network

There may also be a way to avoid launching your own in-office charity care program while still doing your part to help the less fortunate. Look into taking part in a program like Project Access - physician, hospital, and pharmacy networks within communities that provide charity care in partnership.

Project Access began in the mid-1990s in Asheville, N.C., when a group of doctors, hoping to expand healthcare services to the poor in their community, sought commitments from their colleagues and from hospitals to provide a certain amount of free care to the poor. They also involved the county medical society, local government, and area pharmacies.

“Over three years, these doctors - Suzanne Landis, Jim Powell, and Paul Martin - talked to each of the 600 or so physicians in Buncombe County and tried to get each of them to commit to see one or two patients a month,” says Joshua Kauffman, the group’s director. “Within three months, 50 percent of the doctors had signed on, and within eight months, 75 percent had committed to see a certain number of patients, either in a clinic or in their office. One reason it worked so well is because it was physicians who set out to recruit their colleagues. It was never a program where you had nonphysicians recruiting doctors to do something.”

Another reason is that the physicians were not alone. The local hospital agreed to provide care to qualified patients, so physicians could order tests such as MRIs without worrying about the money. And pharmacies provided reduced-price pharmaceuticals. Meanwhile, the Buncombe County government chipped in with some money to help pay for drugs and the program’s administration, and the patients themselves were expected to contribute small copayments. In Buncombe County, patients qualify if they are uninsured, ineligible for government insurance like Medicaid, and have incomes no higher than 200 percent of the federal poverty line.

It worked so well in North Carolina that physicians all over the country, with the help of Project Access staff, are devising similar programs for their own communities (including Travis County, Texas  - see www.tcms.com/html/ project_access.html).

A win-win

Some 40 communities have already launched Project Access programs, and another 350 are in the planning stages. As many as 15,000 doctors are participating, and, according to Kauffman, some 10 million Americans - about one quarter of the nation’s uninsured - might qualify for free care under the typical eligibility requirements, if there were a Project Access everywhere.

Those eligibility requirements and other details of the program may change with each community. In Spokane, Wash., where a Project Access launched last year, patients are required to sign a pledge that they will do their part by showing up to appointments, says cardiac and thoracic surgeon Samuel Selinger, who helped launch the program.

“This is not like insurance,” he says. “It’s charity care, and there’s a patient responsibility that goes with it. And if they miss appointments and don’t have a good reason and don’t call us, they’re dropped from the program. This is different from insurance, and it’s only [available] for as long as you need it.”

Physicians benefit from the shared sense of responsibility. “Almost all physicians are charitable, and they’d been doing some things - on some patients they’d give discounts or see them for free,” says Selinger. “But what this does is it gives everyone a sense of pulling together.”

There is another benefit to such openness, says Selinger, and it’s one of the biggest selling points to getting physicians involved. When doctors who provide charity care are able to be open about it - and to publicly account for it, as hospitals do - it raises physicians’ stature in the community, he argues, and that higher profile can be leveraged in other ways, like political fights over prompt-pay laws and liability reform.

“Project Access is a better way to do it in your community, and it allows doctors to step forward and declare their charity,” he says. “You see all the time how much the hospitals are doing in charity care, but there’s nothing in the newspaper about the level of charity that doctors give away. And when people realize what you’re doing, you can get changes on the state level that will help augment the safety net. If we show we’re participating in an organized way, and not just anecdotally, then we can bring about changes that can help patients and us. It becomes a win-win. It’s the smart way of doing it.”

Bob Keaveney, editor for Physicians Practice, last wrote about developing a business plan in the September issue. He can be reached at

bkeaveney@physicianspractice.com.

This article originally appeared in the October 2004 issue of Physicians Practice.