Subject Prompt Payment Discount Policy

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Subject Prompt Payment Discount Policy

    Effective Date:

     Jan. 1, 2008 Page Policy

    Revision Date: Number Jan. 17, 2011 1 of 3 WM-007 New Revised

    Subject: Prompt Pay Discount Policy Authorization: WA/MT Region CFO

    Dan Harris

Statutory/Regulatory Source:

    OIG Special Fraud Alert regarding waiver of Medicare co-payments/deductibles and OIG Special Advisory Bulletin discusses “Offering Gifts and Other Inducements to Beneficiaries”.


    To define Providence Health & Services Washington/Montana Region (PH&S WA/MT) standards associated with offering prompt payment discounts for outpatient and inpatient hospital services provided to patients.


    To treat uninsured patients in a manner consistent with Providence’s Mission and Core Values, and in

    accordance with Providence policy PROV-FIN-519. This policy is intended to work in tandem with

    applicable charity care and uninsured discount policies that provide for discounts or full write-offs of charges to qualified patients, regardless of such patient’s ability to pay.


    1. Limited to hospital services only.


    Prompt Payment Discount Pecentage: A specified discount and partial write-off of co-payments, deductibles or percentage of amounts due from an individual patient to a hospital.

    Services: for purposes of this policy, the term “services” shall include inpatient and outpatient hospital services.

    Uninsured Discount: for purposes of this policy, the term “uninsured discount” shall mean partial write-off of amounts due Providence hospitals from uninsured patients for the provision of services. Uninsured discounts will not be applied to; court mandated payments, co-pay/deductibles, or any individual that resides outside of the United States and travel to the United States for the purpose of receiving services.

    Uninsured: for purposes of this policy, the term “uninsured” shall mean those individuals without commercial, or government (including Medicare/Medicaid) health insurance.


    Each hospital will implement policies and procedures that provide for prompt payment discounts for inpatient and outpatient hospital services.

    1. Prompt Payment Discount Percentage: A prompt pay discount of ten percent (10%) will be

     offered by each acute care hospital for all patient groups.

    2. Applicability of the Policy: The prompt payment discount will be offered to all self-pay

     patients, including balance after insurance.

    a. The prompt payment discount will be offered in addition to the uninsured discount and any

     partial charity balances.

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    b. The patient/guarantor must pay the account in full within thirty (30) days of the first billing

     statement to receive the prompt pay discount. Which will be offered during any business

     transaction; pre-registration, registration, patient inquiry or customer interaction that occurs up to

     thirty (30) days past the first patient/guarantor self-pay statement.

    c. Reference and language regarding the availability of a prompt pay discount will be on the first

     patient/guarantor self-pay statements.

    d. The timing of the discounts may be extended to patients who have substantial personal

     responsibility balances at the discretion of the Revenue Cycle Management Director or

     HSNW Director. The Director must properly document each instance of the prompt payment

     discount. Offering a higher level of discount (10%) is not allowed under any circumstances.

    3. Documentation: Each hospital and Health Services Northwest (Regional Business Office) will

     ensure that prompt payment discounts that are given are properly documented, including the

     process to confirm account balances status and eligibility for the discount.

4. Restrictions on Advertising Prompt Payment Discounts: Communication of the prompt

     payment discount can be given by hospital or HSNW staffs to patients/guarantors, or can be

     included on patient billing statements or brochures. However, no hospital shall disclose/advertise

     such discounts in promotional materials or in any manner designed to target or attract Medicare

     beneficiaries or to generate business payable by Medicare/other federal health care programs to

     the Providence hospital.

5. Applicability of Charity Care & Uninsured Discount Policies: This policy is intended to

     work in tandem with applicable charity care and uninsured discount policies based on

     patient/guarantor eligibility.

    6. Cost Reports: Each hospital will ensure that its cost report reflects full uniform charges (not

    discounted amounts) and will make its fiscal intermediary aware that it has reported its full

    charges on its cost report.

7. Annual Review of Policy: This policy and the discount amount shall be reviewed annually

     by the Providence Washington/Montana Region’s CFO. The PH&S WA/MT Region CFO

     may propose revisions to this policy based on such reviews.


    Payments received at the facility in which a prompt payment discount is applied, shall be recorded in the patient accounting system and when applicable on the Cash Receipts Journal that is sent to HSNW. The entry must include the payment amount and the 10% discount amount.


    ; Violation or misuse of this policy may constitute grounds for immediate disciplinary action, up

    to and including termination of employment, service, or association with

     PH&S. Violation of the laws and regulations upon which this policy is based may result

     in possible civil and/or criminal action.

    ; Knowledge of a violation or potential violation of this policy must be reported directly to the

    Regional Revenue Cycle Management Director for WA/MT. Failure to do so is considered a

    violation of policy and may lead to disciplinary action

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    Date Revised:

Signature on file

Dan Harris, CFO Washington Region Date

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