# Writing off copays



## Networker3412 (Nov 15, 2007)

I have a question.  Is it illegal to write off a patient's copay? If it is or is not, can someone show me where there is documentation of this. thank you. There is a big debate going on in my billing department that i currently work for and i want documentation to back up....


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## kandigrl79 (Nov 16, 2007)

I don't necessarily know about it being illegal.  I do know that when you sign a contract with whatever payor, you agree to collect copays up front.  I guess if you're adjusting them off perhaps one could argue that you are in breach of that contract, but I'm not sure about that.  Why would you want to write them off though?


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## thompsonsyl (Nov 16, 2007)

Hi,

I've heard over the years that it is considered illegal to routinely waive copay's and deductibles.  I've heard mention of the False Claims Act and the Federal Anti-Kickback statutes that have been inacted by the OIG.  I've seen most concern about this surrounding Medicare patients.  

I would look on the OIG website for documentation that you can print out and show your billing staff/office.  I've also seen some really good articles about this on the AAFP website.

I hope this info helps you & Good Luck!


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## Networker3412 (Nov 16, 2007)

well from what they tell me the situation is a patient comes in, has a $25 copay pays only 20 which leaves 5.00 still to patient resp and they state that 5.00 is not enough to collect on so the collectors are told to write them off. the offices are not made to check anything or to collect the right amount. they pretty much do whatever they want because of the excuse "we are too busy to figure it out" i will check on oig website and the other websites to see. thank you all for your help


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## thompsonsyl (Nov 16, 2007)

You're welcome....Also, I attended a seminar in which we were told that in cases like yours, the best way to adjust off these small balances was with a note stating "too costly to pursue".  In some cases, the work and effort outweigh the revenue generated by collecting on small balances.  If you created a specific adjustment code for this, you may be able to run a report at the end of each month to show your physicians how much money they are losing by not verifying the correct copayment amounts due - I'm sure it adds up.


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## cpcginger (Nov 17, 2007)

My understanding is that if you don't pursue collecting the entire copay or write it off as a prof. discount, you are actually hurting yourself when Medicare does it's pricing survey. Becuase if you write those off you are actually saying my services really only cost $20 less. Thus your industry will get hurt over all. And yes you are breaking your contract with the carrier.

As far as the $5 diff in copay $ what was paid vs. what is due I was told it was ok to write those off as small balance write offs.

Now that said, my Dr's write off copay's/coins/deductibles all the time! No compliance.


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## lnaschke (Nov 19, 2007)

*Medicare copays*

According to medicare, it is up to the provider of services to determine whether or not to collect the copay.  I have asked for written guidelines from medicare and apparently they do not exist.


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## Belinda Frisch (Jan 3, 2008)

*Writing off of copays*

For Medicare B patients, and this goes to coinsurance and deductible amounts, Medicare REQUIRES a "reasonable collection effort" which is industry-defined as 3 billing cycles. Anti-kickback statutes and even the False Claims Act can be invoked to prosecute physicians that routinely do not make this effort. The mindset being that the claim is for an inflated amount if the provider does not collect coinsurance amounts hence, the bill should have been sent to Medicare for the "reduced rate". 

For other payers, in our area the prevalent two being MVP and CDPHP, the specific language regarding collection of copays and/or deductibles is in the fine print of the provider enrollment contract. Again, you MUST collect the copays! Failure to do so can result in the loss of your payer contracts.

The ONLY times is it acceptable to "waive" copayment or deductible amounts are after reasonable collection efforts fail or in the case of DOCUMENTED indigence of the patient. Practices will often have an indigence waiver for this purpose. 

Hope this helps.


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## Belinda Frisch (Jan 3, 2008)

*!*



lnaschke said:


> According to medicare, it is up to the provider of services to determine whether or not to collect the copay.  I have asked for written guidelines from medicare and apparently they do not exist.



This is definitely not true. Medicare REQUIRES collection of coinsurance and deductible amounts. See CMS provider manuals for details.


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## mmelcam (Jan 3, 2008)

I also understood it to be a 3 billing cycle rule. If you have sent out at least 3 bills to the patient in attempt to collect with no response, then it is ok to write off the balance.


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## vlwinfrey (Jan 22, 2008)

On the CMS web site if you do a search on Unisured you will get a Q&A from 2004. The rules are for hospitals but they apply for physicians also. You can waive collections if you follow certain guidelines. A policy for indigent or hardship is usually the best. These guidelines have been in place for some time and as of 1/2008 I have not been able to find any changes. It is always better to collect, but before your AR gets out of control prepare some type of financial assessment for the patient. Make sure the physician has reviewed the assessment and signs off on it.  Always make the attempt to collect any amount due and make notes of such. Make sure you have adjustment codes for you policy, Indigent and or Financial Hardship. Hope this help!


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## codegirl0422 (Feb 29, 2008)

This is the way I have always been told. That you have to make numerous accepts to collect before writing off. The companies I have worked for have always used 3 billing cycles. In a meeting I attended, what ever you do needs to be standard across the board and should there should be a written policy in your complaince plan.

Any government (federal) insurance, Medicare, Medicaid, Tricare, BCBS Federal, you are suppose to collect copays/deductibles (or make sure there are reasonable collection effort. If not, "Anti-kickback statutes and even the False Claims Act can be invoked to prosecute physicians that routinely do not make this effort". 

I agree with the person who applied about the small balance write off code in reference to the prof. write off code.

 If you (the billing agency) uses the same software as the office, you may want to check out and see if you post sticky notes/flashers on the accounts to let the offices know the correct copay. When I was posting payments for a billing service I worked for, I would try to do this when I could, especially for the patients who keep being seen over and over again. I also had they problem that a lot of the patients were paying too much 



Belinda Frisch said:


> For Medicare B patients, and this goes to coinsurance and deductible amounts, Medicare REQUIRES a "reasonable collection effort" which is industry-defined as 3 billing cycles. Anti-kickback statutes and even the False Claims Act can be invoked to prosecute physicians that routinely do not make this effort. The mindset being that the claim is for an inflated amount if the provider does not collect coinsurance amounts hence, the bill should have been sent to Medicare for the "reduced rate".
> 
> For other payers, in our area the prevalent two being MVP and CDPHP, the specific language regarding collection of copays and/or deductibles is in the fine print of the provider enrollment contract. Again, you MUST collect the copays! Failure to do so can result in the loss of your payer contracts.
> 
> ...


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## jifnif (Feb 29, 2008)

I cannot speak from a global perspective because I only work for the radiologists and all our charges are the professional components (well, except for the surgical codes).  We don't collect a copay.  Most insurances we are under a capitate agreement with our hospital.  With any small balances we have, we do write off using the adjustment code of a "small balance write off".  Our credit and collections company will not accept any thing under $10.  We have to look at it a few ways:  1:  How much manpower went into trying to collect $2.00?   2.  How much postage has gone out w/ statements and warnings?  3.  Does the patient have any other outstanding charges?  If I am getting paid $20 an hour, how much time does my boss want me to spend on that.  I don't think it is illegal to write off charges in that case, but copay would be a different situation.  We also have professional courtesy and deceased write offs.  I would be interested in hearing if there is any catch to using these?


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## mmorningstarcpc (Mar 5, 2008)

It is also in most of our insurance contracts that copays must be collected.  If they are not, the provider and the patient are in default of their contracts and can be cancelled.


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