How to waive fees and avoid legal trouble
Here’s a policy that may work for you
One of the most sensitive compliance questions for providers is how to help patients with financial problems by charging them less for a particular treatment, or offering a colleague a professional courtesy discount without getting into potential fraud and abuse trouble.
In fact, "Most providers find that the intent of laws and regulations affecting what has been called the practice of "courtesy discounts" to be so onerous that they have completely eliminated the practice of providing discounts on a courtesy basis, and have adopted a policy of only providing discounts based on patient financial need," notes Scott Jones, author of the Medical Practice Compliance Manual.
Here is a sample courtesy discount policy developed by Jones showing how providers can safely waive fees for patients with financial troubles; or as a professional courtesy for a colleague.
1. The practice will not waive fees or allow discounts based on the potential that the individual(s) receiving discounts may be in a position to directly or indirectly influence patients or otherwise refer patients to the practice, in accordance with federal anti-kickback statutes.
2. The practice will under no circumstances waive co-insurance, deductible payments, or other out-of-pocket expenses for the patient and subsequently bill the patient’s insurance carrier, in accordance with 42 U.S.C. 1320a-7a(a)(5) and the Civil False Claims Act.
3. If the practice chooses to waive all fees charged a patient as a "courtesy discount," the following criteria should guide this process:
• The patient or patient’s immediate family should not be in a position to influence patients, refer patients, or otherwise provide services that may be considered to be of financial benefit to the practice or practice physicians.
• The entire fee is waived, and no insurance carrier is billed any amount for the services rendered.
• The patient does not receive a significant financial benefit from the waiver of fees.
4. The practice may elect to establish a "hardship waiver of fees" for patients who are in financial need. The following criteria should guide the process of extending a hardship waiver:
• The process of determining financial need and authorizing waiver of fees should be confidential and managed by practice administration rather than physicians, in order to establish that waiver of fees has no impact on the provision of medical services.
• The practice uses a generally acceptable measurement tool to determine financial need. A suitable tool may be the U.S. poverty guidelines (available via the Internet at www.aspe.hhs.gov/poverty, and from the Federal Register).
The poverty guidelines used should be the same guidelines established and issued by the Department of Health and Human Services (as opposed to the poverty measure issued by the U.S. Census Bureau), and are the same guidelines used to establish eligibility in certain federal health care programs. The guidelines are updated annually and the practice should maintain the current year guidelines as its measurement tool.
• The practice establishes a policy in which any patient may apply for and receive a hardship discount through a specific review of documents that establish the patient’s eligibility. The practice may request copies of the patient’s most recent tax return or employee W-2 income statement to determine actual income of the patient’s family unit.
• The actual income of the patient’s family unit is compared to the U.S. poverty guideline. If the patient’s family unit income falls below the established poverty level in the guideline, fees may be waived.
• The practice widely publishes or posts information on the process and the availability of fee waivers and offers access to the process to all patients who wish to apply.
5. The practice will not claim fee waivers as "bad debt" for cost accounting purposes that may affect federal healthcare programs.
6. The practice will not waive payments from patients who do not qualify as being financially needy.
7. Documentation will be maintained in a separate patient business file, rather than the patient medical record, as to the qualification for financially needy status and any waiver of payments.
8. Practice physicians will not reduce, limit, or withhold treatment in any way for patients who qualify as financially needy.
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