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Medicare Compliance & Reimbursement

Home Care:

OIG OKs Copay Waiver On Diabetes Supplies

Published on Wed Feb 18, 2004

Follow these top attorneys' tips to make sure your copay waivers are legit.

Home care providers and durable medical equipment suppliers need to get a handle on waivers of copayments for DME.

The HHS Office of Inspector General has given its stamp of approval to a plan to waive Medicare copayments for glucose testing equipment and supplies, according to an OIG advisory opinion issued Feb. 9 (No. 04-01). The proposed scenario covers 2,800 patients treated at 40 clinical centers.

The patients are expected to participate in a government study on the best medical approaches for addressing coronary artery disease in patients with Type II diabetes. The study's protocol would require the patients to self-monitor their blood glucose levels.

The anonymous requester of the opinion sought the OIG's blessing for waiver of the copayments for the equipment and supplies needed for the self-monitoring - and it was successful.

The OIG OK'd the usually taboo waivers partially  because the study was government-sponsored and controlled, it says in the opinion. Government control minimizes the OIG's usual fraud and abuse concerns, says attorney John Wester with Sidley Austin Brown & Wood in Washington, DC.

And the OIG liked the fact that the clinical trial involved is not oriented to a commercial product. Instead, the study seeks to determine best medical practices. "Some studies are more about trying to get referrals rather than a scientific purpose," notes attorney Robert Falk with Powell Goldstein Frazer & Murphy in Washington, DC.

The Right - and Wrong - Way To Waive Copays

But this opinion is so narrowly tailored that it is unlikely to help suppliers struggling with their day-to-day confusion about when to waive copays, Falk says.

Suppliers get hit from both sides on the copay issue, he maintains. Consumer groups and even legislators complain when health care providers collect copays too aggressively from elderly and fragile patients. But the feds come down hard on suppliers who appear to be offering kickbacks through routine waivers of the cost-sharing mechanism.

Attorneys offer the following tips for staying on the right side of the law but still making sure needy patients who require supplies and equipment can get them:

  • Don't routinely waive copayments. No matter how tempting it is, waiving copays on a blanket basis is a major no-no in the feds' book.

  • Make case-by-case decisions. That doesn't mean you can't ever waive copays. "Suppliers may waive copays based on an individualized determination of financial hardship or indigence for each patient," Wester counsels. But make sure it really is an individual, well-researched decision.

  • Set eligibility guidelines. There is a marked lack of guidance in the area of copays, Falk protests. "It's a whole unresolved issue." While suppliers wait on official guidelines, they can set their own standards for copayment eligibility, but the standards must be considered reasonable.

  • Document indigence. The key factor for waiving copays will be the client's indigence, Wester notes. "Published guidelines for public assistance or other relief programs may be used as a baseline, adjusted as appropriate, for indigence determinations," he offers.

    Don't take patients' word for it. Documenting the indigence is an important part of keeping on the feds' good side, Falk advises. Suppliers should have a form patients must use to document their financial hardship, Wester recommends.

    And it should go further than just attesting to the situation, Falk adds. Tax returns, credit reports and Medicaid or Social Security disability benefit membership all are examples of documentation suppliers could take into account.

  • Beware write-offs. On the other side of the waiver issue is writing off copayments that are uncollectible. But what the government considers beyond recovery may be different than your definition. "You have to make legitimate efforts" on good collections, Falk urges.

    "At a minimum, the government will expect to see at least a letter or two attempting to collect the copay," and probably a lot more if the amount to be collected is significant, Wester says.

    Whatever standard home care providers decide on, they must make it a part of their eligibility guidelines.

    Editor's Note: The opinion is at http://oig.hhs.gov/fraud/docs/advisoryopinions/2004/ao0401G.pdf.

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