Practice Management Alert

Practices that routinely write off charges to help patients with financial hardships may be exposing themselves to potential litigation and may be threatening the patients' relationships with their insurers. The smart way to assist patients who can't pay their bills is to review the case, require and examine proof that the patient truly is having a financial hardship, and document in the medical record what you are waiving, recommends Steve Verno, CMBSI, NREMTP, practice manager with Emergency Medicine Specialists, a 120-physician practice in North Miami Beach, Fla., and compliance director for the Medical Association of Billers.

Routine waiver of deductibles and copayments can violate several federal laws and regulations, including the federal False Claims Act, antikickback statutes and compliance guidelines for individual and small group physician practices. It also may violate payer contracts, and could result in your removal from a health plan's provider panel.

For example, when a physician fails to collect deductibles, insurance carriers could argue the provider submitted false charges to them and is committing fraud, Verno says. It could also threaten that patient's continued insurance coverage, he adds. For example, with commercial carriers, the patient has a responsibility to pay deductibles and copayments, and the premium the insurer charges for that coverage is based in part on how much the patient pays out-of-pocket. Generally, the higher the patient out-of-pocket costs, the lower the premium. 

Short of alleging fraud, Verno continues, another option is for the plan to demand the same discount given to the patient. Or, the payer may refuse to pay the entire claim, says Toni Revel, CPC, RN, NP, a healthcare consultant based in Warrington, Pa. "You can't routinely waive deductibles and copays because when the patients or the patients' employers purchase the insurance, the understanding is the employees have a financial responsibility, and so does the insurer. That responsibility is supposed to help patients manage their healthcare a little more effectively than running to the doctor for every little problem, and instead only go when it is reasonable and necessary because they are going to have to pay part of the bill," Revel says.

Also, if the provider routinely fails to collect the deductible from a patient and writes it off so the patient returns for treatment, the write-off could be considered a kickback or an illegal inducement to keep that patient, both experts explain.

"You should never reduce your charges," Verno insists, adding that doing so can increase chances of an audit, especially by HCFA. "If Medicare finds out you are charging it something different than a commercial insurer for the same services, you will be investigated to find out if you are making false claims to the government. To keep everything aboveboard, submit the same [...]