Issue 9 - July 2003

Ask the attorney
Can co-pay be waived for charity?
by Deborah Green

For many years I have not charged a fee for providing chiropractic care for missionaries, pastors, priests and nuns. Donating my professional services is an act of giving and is in no way used as a promotion. If these patients have chiropractic coverage, can I bill the insurance and waive the co-payment?

As a general rule you may not waive either the co-payment or the deductible. The reason for this rule is because it is perceived as an inducement to your patients to use your services. Obviously, you are the more attractive choice of healthcare provider if the patient does not need to expend his own funds for your services. Furthermore, since the patient has no financial reasons to forego treatment, he may be more prone to utilize your services than if he had to pay for it.

Providing this type of discount to your patients could result in your becoming liable to Medicare (and other third party payors) for repayment of a great deal of money.

For instance: Assume that your normal fee for an adjustment is $50. Medicare is required to pay you 80 percent of that amount and the patient is required to pay you 20 percent.

By agreeing to become a Medicare provider, you have promised to collect this 20 percent from your patients. The patient is therefore required to pay you $10 of your $50 fee and Medicare is required to pay you $40.

If you limit your fee to the $40 that you receive from Medicare, Medicare will assume that your normal fee for this service is $40. Medicare will then pay you only $32 (80 percent of $40). It will also demand repayment of all the over payments made to you when Medicare has assumed that your fee was $50. Medicare will then help itself to the overpayment from future payment due to you.

You may waive the co-pay and/or deductible only if:

1. You do not advertise the waiver or make it part of any solicitation; and

2. You do not routinely waive co-insurance and deductible amounts; and

3. You have waived the amount only after you have determined in good faith that the beneficiary is in financial need. (Financial need should be determined objectively. Consult published poverty guidelines in your community and then obtain objective proof from your patient that he or she falls beneath the poverty guidelines. Objective proof would consist of something like a tax return.) or;

4. You have been unable to collect the co-insurance and/or deductible after making reasonable collection efforts. Reasonable collection efforts would consist of sending the patient at least three collection letters. You are not required to sue the patient if such a lawsuit would not be cost effective. Note: One of the worst things that you could do would be to tell the patient to ignore such collection letters.

If you still want to waive the co-insurance and/or deductible, write a letter to the carrier describing what you want to do in detail and get written permission to do so from the carrier.

Bear in mind that if Medicare decides that the carrier’s interpretation is incorrect, you may still be liable for repayment of the over charges to Medicare although you would most likely not be liable for penalties.

Even offering your services for free may be a problem if you receive referrals from the people to whom you are rendering the services. In addition to becoming liable for civil monetary penalties in the amount of $10,000 per item (and in some cases up to $50,000 per item) plus triple damages under the False Claims Act, you may also be subject to jail time under the Anti-Kickback statute.

Deborah Green has been a practicing attorney since 1977. She is a member of the American Health Lawyers Association, the New York State Bar Association Health Care System Design Committee, the New York State Bar Association Health Care Providers Committee, the American Bar Association Health Law Section and the Florida Bar Health Law Section.

If you require clarification on these questions or have any questions of general interest on other legal healthcare issues, please contact the law office of Deborah Green. Her number is 954-236-8282; fax, 954-236-6939; or e-mail, healthattorney@aol.com.

LEGAL DISCLAIMER: This column is provided subject to and governed expressly by the terms of this disclaimer. This column is provided for educational purposes only. The accuracy or timeliness of the information presented herein is not warranted. The information presented herein is not intended to be advice as to a specific fact pattern with which you may be presented. Accordingly, please note that the information contained herein is not being presented as legal advice with respect to any matter and that no attorney-client relationship is hereby established.