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What is inducement, what kind of legal problems can arise and how to stay out of trouble with Chris Wolfington of FinPay

• Hatch Compliance • Season 1 • Episode 32

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In this episode, we speak with Chris Wolffington, founder of FinPay about inducement and some of the legal risks healthcare providers face. Chris gives advice on navigating these waters and reducing your liability. We discuss federal regulations designed to prevent providers from unlawfully using incentives to influence patient's provider choice. This candid discussion peels back the layers of complexity surrounding healthcare inducements, revealing how the once Medicare and Medicaid-focused laws now impact patients with commercial insurance, reshaping the dynamics of patient care and choice. We also probe into the sensitive areas of behavioral health and substance abuse treatment, dissecting the profound changes due to the Anti-Kickback Statute and what they mean for providers across the board.

 As patient financial responsibilities surge, Chris steps in to help us comprehend how this increase shapes the healthcare landscape, from reimbursement concerns to the importance of solid pre-admission financial agreements. We confront the daunting challenges of payer audits and the potential havoc of claim clawbacks, emphasizing the necessity for healthcare facilities to demonstrate compliance with confidence. Through this dialogue, we reveal how FinPay's services offer a beacon of guidance for providers traversing the intricate compliance and financial management terrain. Whether you're a healthcare professional or just fascinated by the intersection of healthcare policy and fiscal responsibility, this episode promises insights and solutions for the pressing issues facing today's healthcare industry.

Speaker 1:

Welcome to Hatching Creativity. This isn't just another behavioral health podcast. This is the place where thought leaders converge to talk about real life challenges, breakthroughs and pivotal aha moments. Today's guest is Chris Wolffington from FinPay. Can you share with the people who are listening to this what inducement is? Can you define inducement, and then we can talk about the inducement risk?

Speaker 2:

Yeah, so inducement risk was a law that used to be really just for Medicare and Medicaid. It applies in all sorts of it's centered around the idea that you can't offer an incentive or reward is the actual language of the statute to get someone to get their care at your facility. And here's the logic. The logic kind of makes sense. Some compliant rules you and I could probably agree they're unreasonably burdensome on the provider, which ultimately ends up costing you and I more money as consumers. Right with, through higher cost. But inducements sort of make sense. Right, not to pick on lawyers. But you know the old ambulance chaser, you know sort of cliche against lawyers. Well, you don't want ambulance chasing hospitals, right? Oh, come and get your knee surgery here and I'll get you a free soup. And you know, gift card at TGI Fridays, right, like, what they wanted to do is to make sure that providers were not using anything other than the convenience and quality of their care as the competitive differentiator why I would go to Dr Jones versus Dr Smith or hospital A versus hospital B, and Medicare Medicaid didn't want to get caught up in that. So they said it is literally a federal crime Like go to jail, crime fraud If you use any type of reward or incentive to get the patient to receive their care from you.

Speaker 2:

Now, that did not apply to commercially insured patients for a while. But what happened is the insurance the commercial insurance companies sort of piggybacked off of where CMS was going and said well, wait a minute. If you want to be in network with me, you can't induce, right? Because one of the strategies behind a network is through the provider. I want more patients, so I'm willing to get access to these in network patients with, say, blue Cross. But I'm taking them at now a lower rate, and Blue Cross's logic is hey, provider, if you're in network with me, you're going to get all my patients. They're going to come to you. That's why you should let me pay you less for those services. But Blue Cross isn't stupid and that is not dumb, and you know healthcare is not dumb. When they sign those managed care agreements, they're going.

Speaker 2:

Yeah, by the way, you there's no inducing. It is a violation of your agreement with us to offer any type of incentive or reward for the patient to come to you. That's why, by the way and I don't know if consumers have even recognized this that there's no reward programs in healthcare Right, until I just said it. Most when I say that to people like oh my God, I never really thought that, like right, there's reward programs for everything. I can go to Joe's coffee shop, scan a tag Right and he has a loyalties program, but healthcare doesn't. And there's another topic around that that we're planning on doing at FinPay where you get reward points and access to merchants with gift cards just for paying your bills off. Because we can, that'd be nice.

Speaker 2:

Yeah, it's kind of cool.

Speaker 1:

That's the idea, so I swear getting people to pay their bills is like pulling teeth. It's just amazing what's involved in that.

Speaker 2:

So here's what's interesting about the behavioral health space.

Speaker 2:

So, in the behavioral health space in 2018. They passed a law called ACRA, and ACRA was really aimed at two main abuses that was going on in behavioral law and I'll admit, I believe they were going on like for but what anyone thinks about my opinion patient brokering and some of the abuses in the lab business were absolutely excessive and the government had a crackdown on it. I'm sure the insurance lobby had something to do with it, but as a result, it extended the criminality of inducement from just Medicare Medicaid patients to substance abuse disorder patients for commercially insured patients. So there's a lot of words there. It makes plays what it means. It means if a provider is charged and convicted of inducement meaning providing any type of incentive or reward to a patient to come to their treatment center you go to jail. It's not a civil fine, You're going to jail, and there have been jail terms right. So, though the intent was to stop patient brokering and stop the abuses in the lab business, it created a lot of complexity and, at the same time, something else has been going on.

Speaker 2:

So 10 years ago, Mike, the reimbursement rates that I was getting for substance abuse treatment were such that, number one, whatever I was getting from the insurance company was more than enough to make my revenue model work for my business. And number two, the percentage of the rate that I was getting from the payer. The percentage of that rate that was owed by the patient. We call it patient financial responsibility. Other people say patient liability, Other people say the word deductibles and what they mean is everything, even though deductible is a specific type of liability. But the patient had 2% of the bill. So what does that mean? It means that nobody cared if they paid Right. And it also meant that if you were company servicing the industry, if you were an EMR business, if you were a revenue cycle solution, if you were a CRN. So, whether you're a sales force or DAZO, sir, KEPU or collab, MD, advanced MD, Opus written these are all technology solutions serving the space.

Speaker 2:

If your customer didn't care about patients paying their bill, Are you going to go and build technology and spend money developing things to manage that? Of course not. So what has happened in 10 years? Literally, in 2013, the patient owed 2% of the bill. In 2023, the patient owes 25% of the bill. Now here's what's challenging On one hand, the government says if I don't collect that money, I'm going to jail under ECRA, and the statute actually says that you make regular and customary collection efforts. That's the way it's worded and those things have very specific meaning and I'll get to that in a second. But think about it On one hand, I go to jail if I don't collect it. On the other hand, someone could say oh, if I talk about money with a patient, they're going to go somewhere else because my competitor is not. That's a piece of misinformation that's been going around the industry for a long time.

Speaker 1:

Another thing to add there, chris too, is with everybody so focused on outcomes. You can pull it back to outcomes and you can go where everybody's talking about outcomes. What is the key? The top trigger for people to go back to use after a substance disorder treatment is they come out and then all of a sudden they've got these crazy bills. They're financial.

Speaker 2:

Well, they say, the third leading cause of relapses financial stress.

Speaker 1:

So what happens? You come out and you got these huge bills. I think that to not talk about finances in the front is completely irresponsible.

Speaker 2:

And well, I love your choice of words. So here's the dilemma. The dilemma is there's no systems, technology out there that historically has been available to manage this risk. So let's take the good actors somebody that genuinely wants to do the right thing by the patient once a positive outcome, and sincerely cares about this patient getting their life back through treatment and the journey of recovery they're good actors. Well, I can be a good actor, all I want. But if I don't have the best practices and the tools and the technology to do that preadmission conversation, the right way to have a tool that tells me what this patient's going to owe accurately, right For me to understand my risks associated with what happens if this patient doesn't pay me. So I can want to be a good actor all day long.

Speaker 2:

So what's happened, michael, to the good actors is they've been stuck with. The solution is I guess I got to wait till they discharge. I guess I have to wait till the claim is adjudicated and then I'll know what they owe and then I'll send them a bill and then I'll close my eyes and go like this and hope they pay me. And to your point, not only let's look at it selfishly for the provider, you're not going to pay. If you, if that's your strategy, sending someone a statement and hoping they pay you you already lost. You just don't know it yet or you won't admit it. Right, but to your point, how can you say you care about the patient and you invest in this continuum and curriculum of care and you allow that to happen, knowing financial stress is the leading cause of it?

Speaker 1:

And, ironically, one of the craziest part, michael.

Speaker 2:

There's a really piece of misinformation going around the industry. People think if I send you three statements, that meets the compliance requirements under inducement it's.

Speaker 1:

You know it's really interesting. I had a guest on the podcast a couple of weeks ago. His name was Zach Rothenberg. You familiar with Zach Rothenberg? Do you know who he is? Or are you familiar with the law firm Nelson Hardiman? I know I know.

Speaker 2:

Harry Nelson. So so he's. So is that? Is that really smart lawyer, really smart? I had a great. He's the first guy ready for this.

Speaker 2:

I owe Alia, one of our clients, the CFO, janice, great lady, I really owe her. She was one of the first people in seven years I've been in this part of the space that really understood all the moving parts and the complexities. Right, it's a water blot. If I go to all this effort to be compliant and I do that, you know I'm not. I'm losing money because I'm not being. I'm not collecting that money, or maybe I'm losing admissions.

Speaker 2:

Like there's a lot. There are levers. I actually use this slide in my deck, mike, that shows people the levers. Like, if you change your business rules and you move this lever up, it's gonna make that lever go down, and it's meant to illustrate that this is a complex problem. Well, there's very few, just like there aren't a lot of systems in the market. Mike, that thought out that maybe there'd be a day that patients would owe a lot of money or maybe there'd be a day that you'd go to jail if you didn't collect it. So what's also happened is there's not a lot of professionals in the marketplace who are patient financial management subject matter experts. Harry Nelson came across to me and I don't really know him. I don't do business with him. I just had a couple of conversations with him and I was extremely impressed with his, you know, comprehension of the space.

Speaker 1:

Well, the thing is this, Chris, is that any law firm that works in behavioral health is familiar with us because we do so much due diligence on the merger and acquisition and also because we help people get out of a world of crap as it comes to compliance right, and I had a conversation with Zach Rothenberg from Nelson Hardiman and we were talking about.

Speaker 1:

We talked about all kinds of things. I met with him at the base conference and he was on the podcast and I said to him during our episode what is the biggest pitfall that treatment centers fall into when it comes to the payers? His response was the patient financial responsibility and he went into detail on why and what happens and what you need to do, and so it is definitely becoming more prevalent. People are definitely becoming more aware of it. You guys are in the right place at the right time for that because of that, but I thought it was really interesting and I remember that you and I were going to be having a conversation when I had this talk with Zach about it, and it's the kind of thing where, yeah, it's getting to be-.

Speaker 2:

I think they're just getting started. Oh yeah, so this is what I believe. People think, oh, the patient owes me deductible of X, copay of Y, co-insurance of Z, and that total is 2,500 bucks and they think that their risk is 2,500 dollars. And on paper it might look that way, but you mismanage and you don't have a patient financial management strategy that makes sure that you're compliant. Like collecting the money is important and let's put that over here for a second. You're not compliant and you go through a payer audit. I sat through. I sit in on a payer audit with my customer. They'll call me up and say SIGNA, atna or whoever is auditing us. They're coming out here Tuesday when you come out and it's actually one of my most fun things to do on my job, because the payers just assume that the treatment facility is gonna have nothing in place around inducement and it's gonna be a license to clawback claims because the burden of proof is on the provider. Like the payer doesn't have to bring anything to the table to prove you did something wrong. You actually have to prove you didn't do anything wrong. In other words, the payer shows up on the list. Hey, last six months. Here's a list of our members still on our health plans that you serve. I need to see your standardized operating procedures around patient financial management. I need you to show me not tell me that you have a normal process for regularly and customarily collecting these dollars. And sending statements doesn't count Right, and they don't even have to get to the clinician charts to justify calling back claims, because most people stick at this.

Speaker 2:

My favorite president job is I show up on my laptop, I look the auditor in the eye and I say sure, I said why don't we save some time? I say why don't you pick a patient? And they always say to me what do you mean? I go any patient, like, literally pick any patient you want. I said you don't want me to pick, then it's not random Mm-hmm, right, and they'll go and they'll pick a patient off their list and I'll go to the patient page on my system, turn around my laptop and I'll say here's the truth of lending disclosures, here's all the authorizations, here's the agreement of payment terms before the patient was even admitted.

Speaker 2:

I said you are aware, mr Auditor, that if these payment terms are solidified prior to admission, this facility can't be accused of inducement. They came to terms before they even were technically admitted. And then I always turn it back around and go you wanna pick another patient? I've never gotten past three. And then they go to clinician charts, then they go to look somewhere else. But their goal is to apply pressure with the threat of clawing back claims because especially if you're out of network, because they don't wanna be paying those rates.

Speaker 1:

That's what happens. When a surveyor shows up and a client is using Hatch, yeah Is, you can show them anything that they need to see within a couple of seconds and a couple of clicks. And you're not looking through binders, you're not digging through spreadsheets. It's all there and it's just. And when they know, when they know, like you're.

Speaker 2:

My part of compliance is easy. I just have to deal with inducement and consumer protection. Yours is obviously a lot more thorough. It is, but when you're an auditor just like if it's a tax auditor, right, or your own auditor for your own company, your accounting firm they just wanna know you're buttoned up, nice and tight. And when you have systems in place, like you guys do that's why I'm a big fan of your platform it's like literally a get out of jail free card. You're like what do you? I don't wanna tell you, let me show you, and the minute you do that, what the payers do too what the payers do too.

Speaker 1:

when they come and they take a look and they see that your charts right, or your documentation or your policies is not systemized and done correctly, they assume that you're doing it loosey-goosey and you always have, and they can go back. They can also start taking adjusting your contracts and your agreements from there moving forward. There's a lot that could be done.

Speaker 2:

that could be really painful if you don't do it right up front and that's why I said earlier if a patient is 2,500 bucks and you're looking at it as a $2,500 risk, no, the risk isn't just the 2,500. The risk is that claim and that reimbursement portion that you got back from the payer may also be at risk in and on it right.

Speaker 1:

Can you just tell us a little bit about yourself and what FinPay is, and how do people get in touch with you?

Speaker 2:

Sure, well, I'm Chris Wolfington, I'm the founder of FinPay and my day job is Chief Revenue and Strategy Officer. Finpay is a patient financial management company, if you're gonna put us in a category, but we're a solution that provides technology as well as managed solutions to help organizations manage the economic and the compliance risks that are associated with patient financial responsibility. I said more plainly Patients all out of money. You know 20, 25% of what a provider revenue that they're entitled to. We help manage all the risk and get all that money paid. Yeah, so it's pretty cool. And there's. My email address is CW at fin pay comm, fin PA Y, and my phone number is 610 909 7000.

Speaker 1:

Chris, what's the best way for somebody to find more information about Finn pay? Could you want to share your website or?

Speaker 2:

a. If you go to fin pay comm, we're on LinkedIn and so we post a lot of stuff on LinkedIn things that are really relevant Topics and discussions. The website has a lot of information, breaks down the different technology solutions and manage solutions that we offer. But I'm a face-to-face guy, so what I always say to people if you authentically, if patient financial Responsibilities are risk it or it's an area where you think there's opportunity to improve, the best thing to do is just call me, because I like having conversations with people I love, I'm passionate about the topic, so call me. No one's talking about inducement risk, and here's what's interesting unlike other types of compliance risk, with inducement you have a motivated whistleblower.

Speaker 1:

Thanks for tuning in to hatching creativity. We appreciate your support. Please don't forget to like and subscribe and tell all your friends about the show and remember it's never just about one thing. I.

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