# Down coding self pay = Medicare Fraud?



## dawnpharr (Jan 9, 2013)

I 'think' that I know that it is considered Medicare fraud to down code self pay patients because you are, in essence, up coding the Medicare patients. Can some one please help me find the documentation to support this?
Thanks!


----------



## sparkles1077 (Jan 9, 2013)

I work for a large hospital, and we do have a sliding scale for uninsured patients.  I also worked for a profee firm, who also offered a discount for uninsured.  Since they have no insurance, they can not be bound by any rules or contracts that I would know of.  It is their money, and CMS is not involved.


----------



## Pam Brooks (Jan 10, 2013)

When you "downcode" your self pay patients, even though you are not submitting a Medicare claim on their behalf, you are essentially overbilling Medicare when you submit higher-coded claims for Medicare recipients for the same service.  That is a violation of the false-claims act.  

The safest way to handle self-pay patients and provide them with lower-cost care, is to code and bill everyone equally, but make adjustments after the fact for self-pay patients based on a written financial aid standard that you set for your practice across the board.   Be sure you treat all self-pay patients based on this written standard.  You can't pick and choose.


----------



## dawnpharr (Jan 10, 2013)

*Pam*

Pam - I agree with all you said - however I need to be able to show the documentation from CMS - any ideas?


----------



## Pam Brooks (Jan 13, 2013)

http://www.falseclaimsact.com/common_frauds_healthcare.php

This is a nice description of the false claims act and examples of what not to do.


----------



## mitchellde (Jan 13, 2013)

sparkles1077 said:


> I work for a large hospital, and we do have a sliding scale for uninsured patients.  I also worked for a profee firm, who also offered a discount for uninsured.  Since they have no insurance, they can not be bound by any rules or contracts that I would know of.  It is their money, and CMS is not involved.



First do not confuse a hospital with a physician when it comes to billing and regulations.  A hospital was built with public funds and is therefore required to give back in the form of discounts and charitable care.  A physician is not allowed to do these things.  Second, just because the practice is done does not make it right.
It does not matter that the patient does not contract with insurance, the fact is the physician office does and is therefore bound by all state and federal laws that govern billing.
There is a very important clause the barring all else Medicare can fall back on called the Most favored Nations Clause.  It is a legal clause that in effect states:
In health law, the clauses are sometimes called "equal rate" or "comparable rate" provisions because they require doctors to let plans match, not beat, any lower reimbursement rate from another insurer. These clauses typically require a provider to give the payor the lowest rate that it gave to any other comparable payor. (a self pay patient is also a payor).
Another source will state it as you may not charge any one entity an amount that exceeds the what you charge to the least charged entity for the same service.

Now my question to the original poster is were you speaking of down coding or discounting?  Downcoding is charging for a lesser service than what is documented, and that you can never do.
Discounting services is not allowed on a routine and regular basis.  If you have a patient that cannot afford the care given you may follow the states medical indigency provision and discount by the amount allowed by the state but you must have proof of the patient income and that they do not qualify for Mcaid.


----------

