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What Medical Providers Need to Know About Waiving Fees or Copays

Posted by Erick Cutler, CPA on Jun 22, 2017 9:31:07 AM

You got into the medical profession to help people. It makes sense that you might want to waive a patient's portion of a medical bill once the insurance provider has paid the required amount. But in the current legal climate, this kind of well-meaning choice could

 cost you your practice. Running afoul of anti-kickback laws or insurance regulations could happen without you even knowing you are in violation of the law. Your first responsibility is to protect your business, so you can continue to help people, now and in the future.

Balancing Ethical Concerns for Patients with Legal Standards
According to a Physicians Practice article, you cannot legally charge less than Medicaid would pay for a given service or procedure. It's true that according to the American Medical Association's Code of Medical Ethics, your first responsibility is to your patient. But that duty is not as clear-cut as most physicians would like. As you know, practicing doctors sign contracts with insurance companies. Those contracts come with complicated legal stipulations. Waiving patient fees can directly contradict the letter of a contracted agreement, resulting in a lawsuit for your practice — or, potentially, the loss of a license.

Understanding Your Responsibilities
The Health and Human Services Office of the Inspector General (HHS-OIG) spelled out a doctor's legal requirement almost 20 years ago, in the Compliance Program for Individual and Small Group Physician Practicesaccording to an article by Karin Bierstein for MiraMed. Giving your patients gifts or incentives of a particular value with the expressed goal of generating more business for a federal healthcare program, such as Medicaid, can violate anti-kickback regulations. Fee adjustments for family members, employees and others can be legal if there is absolutely no way that individual could help bring more business to your firm. This is known as "professional courtesy."

Some physician's offices also offer discounts for a cash payment to avoid the uncertainty and difficulty that can come from navigating insurance contracts and payments. In this case, it is your responsibility to ascertain whether the discount is contraindicated by any of the insurance contracts in which you are involved. As a business owner, your first responsibility here is to make sure that your business is operating ethically, both to your patients and to the public.

Understanding Patient Rights and Responsibilities
We've seen that in some cases, a reduction of fees may be allowable, as long as you're not charging less than Medicaid would pay or violating the terms of a particular contract. The waiver of a required copay, however, can immediately breach both your contract with the insurer and your patient's plan. The insurance policy is a legally binding agreement, and the terms and conditions must be met for your patient to continue receiving those insurance benefits.

There can be an exception made for a financially needy patient if you have done due diligence in a reasonable, good-faith effort to ensure that the claim of need is accurate. Keep excellent records to protect yourself and your practice if you do choose to waive a copay. If you cannot support your financially based reason for allowing a waiver, you may be subject to the Civil False Claims Act.

In general, listen to your common business sense when choosing whether to waive a fee. Know the legal requirements of your contracts. Consult with a trusted advisor experienced in medical practice management if you have any doubts at all about the wording of an agreement. If you understand your legal obligations and financial implications, you can help your patients to the best of your ability while staying in practice to help the patients you care about for years to come.

Contact the medical CPAs at Goldin Peiser & Peiser for strategies on making your practice financially secure.

Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article. 

Topics: Medical