Waiving Deductibles & Copays – Is it legal?

Waiving deductibles and copays has always been a hot-button issue in the medical community. It can be difficult as a provider to charge a patient a copay if you feel they’ve been down on their luck and hurting financially. After all – especially therapy providers – seeing them week to week you can become close to them and sometimes providers just “feel bad” charging a copay.

But choosing whether or not to charge a copay is more than a personal decision – it’s a legal one. Especially for Medicare or Medicaid patients, refusing to charge a copay can get you in hot water. The Office of Inspector General has come down hard and very clearly on the routine waiving of copays. The OIG has stated, in a special fraud alert, that a “practitioner or supplier who routinely waives Medicare copayments or deductibles is misstating its actual charge” and has also insisted that waiving copays violates the anti-kickback statute. Even if you are not physically handing a patient cash for walking into your door – waiving their copay is very similar. By waiving their copay, you’re giving them an incentive to come to your practice instead of going elsewhere. That’s providing a kickback for them to come to you.

Aside from Medicare and Medicaid patients, it’s also important for you to charge commercial patients their due patient responsibility for the insurers you’re in network with. You have legally binding contracts with these carriers that require that you bill the patient exactly what is stated on the EOB – no more or no less. Charging less – and the insurance company becoming aware of it – could easily lead to contract termination. Some states also have laws on the books that extend the anti-kickback statutes to all patients, regardless if they are Medicare or Medicaid, so you could be violating Federal law as well.

So when is it okay to waive a copay? Depending on your contract with commercial insurance carriers, it may never be okay. Please be sure you reference it before coming to any agreement with any commercially insured patient. But for Medicare or Medicaid patients there is a way to do it on a patient by patient basis when appropriate. First you need to make sure you are not doing it across the board – you need to have stated, specific and consistent circumstances by which you will waive copays and they must be based on a patient’s individual financial need. Make sure you have a waiver on file that documents the patient’s financial needs, accompanied by your office’s policy – ideally with income requirements.

It’s so important to file federal and state guidance when it comes to running your practice. Minor issues like patient copays can get a practice into serious hot water and copays are not worth losing your practice over.

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