Practice Economics
Be Careful About Waiving Fees
Avoid the legal and ethical questions that can accompany fee waivers and discounts.

If a patient can't pay for a treatment or procedure, or can't cover the required co-payment, do you offer him a discount? What about other medical professionals? Does your practice extend a courtesy discount to them?

In this article, I'll recommend appropriate policies for handling these issues and how to avoid the fraud and abuse concerns that often arise in this area.

I believe the best way to comply with federal anti-kickback statutes is to have a basic policy stating that you won't waive fees or grant "professional courtesy" discounts. Within that basic policy, however, your practice may choose to make an exception and waive fees for only those patients who demonstrate a clear financial hardship that meets accepted guidelines for need.

And if you feel that you have valid reasons for offering professional courtesy discounts in certain specific instances, you should waive the entire fee and not bill the insurance carrier for any service provided to the patient.

Set Firm Waiver Policies

Whatever policy you choose in regard to waiving -- or not waiving -- patient fees, you should never:

• waive coinsurance, deductibles, or other similar expenses and then proceed to bill the insurance carrier for these fees
• waive fees for a patient if he or anyone in his immediate family is in a position to influence or refer patients, or provide services that could financially benefit your practice or its physicians.

If you decide to waive fees for patients in financial need, you should:

• define the eligibility requirements and set firm rules for granting waivers
• design a financial hardship questionnaire to more accurately evaluate patients who say they are unable to pay
• make sure these patients know that any determination of financial need will be kept confidential.

The following elements should be part of any financial-needs policy that your practice implements:

• Set realistic standards. Employ an acceptable measurement tool to determine which patients qualify for your financial-hardship policy. One commonly used standard is the U.S. Poverty Guidelines at www.aspe.hhs.gov/poverty, released annually by the U.S. Department of Health and Human Services. These guidelines are applied to determine eligibility for such federal programs as Head Start and the National School Lunch and Food Stamp programs.
  You're responsible for defining "income" as it relates to the policies in effect for your patients. This definition and the guidelines you use for your hardship policy should be posted in your office and published in your practice newsletter.
• Establish a hardship review process. This should include the review of patient eligibility documentation, such as W-2 income statements, the patient's most recent tax return, and the responses to your internal questionnaire.
• Extend the benefits of the program to all patients who qualify. But make sure prospective hardship patients know in advance that they won't have fees discounted or waived if they don't qualify under the practice's poverty guidelines.

Treat All Patients Equally

Your practice's hardship policy should also state that treatments won't be withheld or reduced for any patient in financial need. In addition, you should keep all information relating to financial hardship patients separate from those individuals' medical records.

Finally, don't write off fees for financial hardship patients as bad debt. Instead, set up an adjustment code to represent these voluntary adjustments.

Whatever rules you set for your practice's discount or waiver policy must comply with all anti-kickback statutes. This is one area in which you should protect yourself at all times. 

Mark E. Kropiewnicki, J.D., LL.M., is a principal consultant with The Health Care Group, Inc., and a principal and president of Health Care Law Associates, P.C., in Plymouth Meeting, Pa. He regularly advises physicians and practices on their contracting matters and business law obligations. He can be reached at (800) 473-0032.