Difference Between Refusal and Inability to Pay

What is the difference between refusal and inability to pay?

 A refusal to pay can also be considered an “unwillingness to pay”, which applies to a patient who has made no effort to make any payment for an extended period of time (a health center can define what an extended period of time means), and/or have not met the terms of their agreement. An inability to pay is when a patient has a financial barrier preventing them from making payment for services provided. A financial barrier could be an employment status change, homelessness, death in the family, pandemic, or any other barrier that can be considered a limitation to receiving services due to financial burdens. It is up to the health center to define what circumstances qualify as an inability to pay.

If a patient truly refuses to pay, a health center can decide to have a Board approved policy that outlines the criteria for denying services to a patient due to a refusal to pay. Specific requirements can be found in Element J-Refusal to Pay Policy in Chapter 16 (Billing and Collections).

In the instance of an inability to pay, it’s important that the health center decrease any barriers to care (including financial) and must have a policy or procedure for waiving or reducing fees. Having a policy or procedure for waiving or reducing fees is not optional.  Chapter 16 (Billing and Collections), Element H outlines the required documentation that a health center must have to waive or reduce fees.

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