Whether you are a family practitioner or a medical specialist in New York, in some cases, forgiving co-pays, co-insurance, and deductibles can be a legally dicey proposition. Though the waiver of these fees may endear you to your patients, insurance companies, including government-funded programs such as Medicare and Medicaid, do? not look kindly on such actions.
What you may think of as a kindness and a courtesy to your patients is viewed by insurance companies as a form of insurance fraud, placing you and your patients at risk for civil, regulatory, and potential criminal liability.
While some states do leave it to the physician’s judgment whether to waive a co-pay and/or co-insurance, this is not the case in New York. If a New York physician wishes to waive a fee, he or she must be very careful to avoid the many potential legal pitfalls.
Both government and private insurance companies frequently argue that waiving medical fees violates the law in one or more of the following ways:
The first theory is that the waiver is an improper inducement or kickback, used to induce patients to choose one particular provider over another, violating federal and state anti-kickback statutes.
Another? argument is that healthcare practices use fee waivers to improperly reduce costs related to processing insurance paperwork and collection costs.
The third? theory of liability argues that an improper waiver is actually a false claim filing. If a service costs $100, and the patient? is supposed to cover 20% of that, the insurance company will then cover 80%, or $80. However, if the physician keeps waiving the patient’s obligation, then the physician has changed the price of the service to $80 and the insurance company should be paying 80% of $80, not of $100,? and? the physician turns out? to be fraudulently over-billing? the insurance company.
On these grounds,? the New York State Department of Health has stated that the improper waiver or forgiveness of patient obligations constitutes insurance fraud. Thus,? the improper waiver of patient obligations can result in investigation by OPMC? and disciplinary action.
As insurance fraud, the improper waiver of medical fees can? also result in criminal liability under New York laws criminalizing insurance fraud.
Further, for Medicare and/or Medicaid recipients and their providers, fee waivers may constitute as the filing of a false claim to the government ? a crime that may result in penalties including imprisonment, criminal fines, civil damages and forfeitures, civil monetary penalties, and exclusion from Medicare and state health care programs. Physicians who regularly waive co-payments may also be criminally prosecuted and excluded from participating in Medicare and state health care programs under the anti-kickback statute.
There do? exist narrow? circumstances when a New York physician may waive a patient’s medical fee. These circumstances can include a patient’s inability to otherwise afford? medical care, a scenario where the physician has notified the insurance company of the waiver, or a? business decision not to? pursue the collection of a debt to? the fullest legally available measure. Occasional? waivers are also rarely prosecuted and are not considered insurance fraud.
In view of the above, New York physicians should? be careful? to document the billing process, as well as evidence of a patient’s indigence and of any other factors in support of the physician’s decision to waive a particular fee.
From? the above? information,? it? is? also clear? that investigations,? and even professional discipline and/or criminal convictions,? can happen even in cases? of physicians? who are not trying? to defraud their private insurance carrier or Medicaid. The laws governing the issue of? medical fee waivers are complex and very fact-specific,? and the potential legal, professional, and financial costs are very severe.
If you are a New York physician and you are concerned about OPMC or criminal investigation based on medical fee waivers by your practice,? it is in your best interest to consult an expert health care defense? attorney as soon as possible.
Call our experienced New York? health care defense attorneys at (212) 577-6677? to schedule an immediate consultation.