Discounts to needy patients
OK to do, if you follow the rules
By Marty Kotlar, DC, CHCC

Not every patient who walks into your clinic has unlimited discretionary income. And not every patient has adequate insurance coverage. Yet every patient who comes in has a need for your services.

That presents a problem: Can you provide discounts to patients who cannot afford to pay their co-payments or deductibles?

According to a top official at the U.S. Department of Health and Human Services Office of the Inspector General (OIG), you as a healthcare provider have the same rights as hospitals to discount services. Providers can safely give discounts to underinsured patients as long as the discounts are not linked to government-paid business and reasonable and consistent efforts are made to collect debts from all patients.

The federal anti-kickback statute does not prohibit discounts to uninsured patients who are unable to pay their hospital bills. Section 1128(b)(6) (A) of the Social Security Act law permits, but does not require, the OIG to exclude from participation in the federal healthcare programs any provider or supplier who submits bills or requests for payment to Medicare or Medicaid for amounts that are substantially greater than the provider’s or supplier’s usual charges.

The OIG has never excluded or attempted to exclude any provider or supplier for offering discounts to uninsured or underinsured patients.

CONSIDER FINANCIAL HARDSHIP

Fraud and abuse laws clearly permit the waiver of all or a portion of a Medicare cost-sharing amount for a financially needy beneficiary. Importantly, under the fraud and abuse laws, the “financial need” criterion is not limited to “indigence,” but can include any reasonable measure of financial hardship.

You may forgive a Medicare coinsurance or deductible in consideration of a particular patient’s financial hardship so long as:

• The waiver is not offered as part of any advertisement or solicitation;
• The provider offering the waiver does not routinely waive coinsurance or deductible amounts; and
• The provider waives the coinsurance and deductible amounts after determining in good faith that the individual is in financial need or if reasonable collection efforts have failed.

However, the routine waiver of Medicare coinsurance and deductibles can violate the federal anti-kickback statute if one purpose of the waiver is to generate business payable by a federal health-care program.

Keep in mind that the financial status of a patient may change over time; recheck a patient’s eligibility at intervals sufficient to ensure that the patient remains in financial need.

In some situations, patients may be reluctant or unable to provide documentation of their financial status. In those cases, you may be able to use other reasonable methods for determining financial need, including, for example, documented patient interviews or questionnaires.

While the OIG is not concerned about bona fide cost-sharing waivers for beneficiaries with genuine financial need, it does have a long-standing concern about providers who use “insurance-only billing” and similar schemes to entice federal health care program beneficiaries to obtain items or services that may be medically unnecessary, overpriced or of poor quality.

Marty Kotlar, DC, CHCC, is the president of Target Coding Inc. He is certified in healthcare compliance and has been helping chiropractors get paid better from insurance companies through use of proper and compliant CPT coding since 1992. He may be reached at 800-270-7044, www.TargetCoding.com, or drkotlar@targetcoding.com.