Let’s first look at the financial health of most Americans.
- According to a 2017 Market Watch report, nearly half of American households live paycheck to paycheck. What makes this even more interesting is that only 1 in 5 people who claim to be struggling financially actually fall below the poverty line. My point? It’s a hard fact to face, but a majority of people are struggling with money because they simply don’t know how to manage it. If providers were to give discounts to half of their patients that claim they are financially struggling, because they live paycheck to paycheck, then we wouldn’t have many providers in business. If the business reasons are not enough to convince you to collect deductibles and copays, lets go over the legal side of it.
Every healthcare provider wants their practice to be successful, but this is also a field of work where the main priority is helping people. This leaves the healthcare provider with a hard choice when a patient asks for a discount due to financial hardship. It is easy to view giving a discount as a harmless and selfless act, and this is how most providers look at it. Unfortunately, discounting copays and deductibles is considered breaking the federal and, in many cases, the state law as well.
In order to understand this better, lets look at the insurance company’s point of view
- Any patient with insurance has already legally agreed to their copay and deductible benefits, which means they MUST pay both or they are breaking their agreement with their insurance.
- Any provider who is in network has also contractually agreed to accept the in-network benefits for that insurance, which includes billing the patient for deductibles and copays.
With these facts in mind, lets put this into play using simple math.
- If a provider charges $100.00 for their service and the patient has a $20.00 copay, the insurance will pay $80.00 and the patient will be responsible for the $20.00 copay. If the provider chooses to waive this copay, the insurance can easily consider this fraud since the provider is technically choosing to only charge $80.00, even though they billed the insurance for $100.00.
Why is this fraud?
- Because if the provider had only billed $80.00 to the insurance, the insurance would have only paid $60.00 and would have left the patient to pay the $20.00 copay. In the insurance’s eyes, the provider is technically lying about their service fee to receive a greater benefit. If the insurance finds out about this, it is legal for them to request this amount back, reprocess all the claims for the provider, and drop the in-network contract due to non-compliance. The same scenario applies to deductibles.
Waiving copays and deductibles is especially unlawful when it is a routine adjustment taken at every visit.
As stated by OIG Guidance Special Fraud Alert released on December 19th 1994, “Routine waiver of deductibles and copayments by charge-based providers, practitioners or suppliers is unlawful because it results in (1) false claims, (2) violations of the anti-kickback statute, and (3) excessive utilization of items and services paid for by medicare.”
So what can you do when a patient can TRULY not afford to pay their bills?
The truth is, financial hardship can be real and if this is fully documented to support the financial hardship of the patient, you will be in a much safer position as a provider should the insurance company find out.
Below are some things you can do to ensure proper documentation according to Liles Parker PLLC Attorneys & Counselors at Law:
- Documentation is KEY. Document everything in this process.
- Develop a policy and procedure for determining patient financial hardship and stick to it.
- This policy and procedure should include FULL documentation of financial hardship, along with a waiver.
- These waivers with full documentation should be updated annually and include the most recent federal poverty level guidelines.
Not only will this policy of providing financial hardship help keep you safe as a provider, it will also allow you to see the truth behind if the patient is struggling financially or if they are simply bad at managing finances.
At Priority Medical Billing Inc. we understand that it can be hard to gather all the information needed to create a waiver that includes all the documentation needed. In order to make this easier for our providers, we are providing sample waivers with the most recent poverty guidelines to any of our providers who may be interested.
E-mail us at email@example.com to obtain a sample waiver!
Legal Disclaimer: The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter. You should not act or refrain from acting on the basis of any content included in this site without seeking legal or other professional advice.
Ambury, T. (July 2017). Legal Compliance: One More Reason to Collect Patient Deductibles and Copays. Retrieved from https://www.webpt.com/blog/post/legal-compliance-one-more-reason-to-collect-patient-deductibles-and-copays
Debt.com, LLC. (January 2019). Personal Finance Statistics. Retrieved from https://www.debt.com/statistics/
Kocher, H. (April 2015). Discounts and Waivers—When are They Permissible or Likely Illegal? [Power Point Slides]. Retrieved from www.lileparker.com
Redmond, M. (June 2018). Is Your Doctor Breaking the Law? The truth about waiving co-pays revealed. Retrieved from https://www.medicalbillingstudycourse.com/tips/truth-about-waiving-copays/