Too often I hear from clients who want to know the right way to write-off patient copays in bulk. The short answer is, there is no right way because there are no circumstances under which bulk write-offs of copays are acceptable.
Background on Copays & Coinsurance
Copays and coinsurance amounts are designed to keep the patient accountable for a portion of their wellness by keeping them financially accountable for a portion of their services. For example, Medicare has a 20% coinsurance that applies to most office visits and other programs like Chronic Care Management.
For Medicare’s Chronic Care Management program, participating providers can bill and receive $43 (on average) per patient per month. Approximately $8 of that reimbursement is in the form of coinsurance, meaning Medicare will reimburse around $35 directly to the provider. In the cases where a patient has a secondary insurance, the majority of the cases, the secondary will reimburse the provider the remaining $8 and the patient will generally experience no out-of-pocket costs. In the situations in which the patient does not have secondary coverage, then they will be responsible for the $8 coinsurance payment.
Again, the goal is to engage the patient by making them partially accountable for the cost of their wellness.
Laws & Regulations
There is a fiduciary responsibility of Medicare providers to bill patient copays. In fact, the CMS Regulations and Guidance Handbooks state,
“Physicians or suppliers who routinely waive the collection of deductible or coinsurance from a beneficiary constitute a violation of the law pertaining to false claims and kickbacks” 80.8.1 – Waiver of Deductible and Coinsurance” (Rev. 1, 10-01-03).
This information also goes to patients in the form of their Medicare Consumer Fraud Pamphlet which states,
“After you have met your deductible, you’re still responsible for paying directly, or through supplemental insurance, at least 20 percent of the Medicare approved amount. This copayment may not be dropped by the supplier except in very special hardship situations and only on a case-by-case basis. A supplier who routinely drops the copayment may be violating federal law.”
Now that being said, physicians may elect to write-off copays for patients who meet specific financial hardship qualifications. Things to remember:
- Infrequent – writing off copays should not be a frequent or advertised process.
- Standardized – create policies that standardize the situations in which you will or will not write-off copays. Include a process for periodic review and audit. These policies should be clear steps that define the reasons for a patient’s financial hardship.
- Documented – patients applying for financial hardship waiver should complete a form or some sort of document that you can retain as documentation that financial hardship was requested, reviewed and approved for every copay waived.
When in doubt, refer to guidance from the Office of the Inspector General (OIG):
“One important exception to the prohibition against waiving copayments and deductibles is that providers, practitioners or suppliers may forgive the copayment in consideration of a particular patient’s financial hardship. This hardship exception, however, must not be used routinely; it should be used occasionally to address the special financial needs of a particular patient. Except in such special cases, a good faith effort to collect deductibles and copayments must be made.”
There are many resources in the industry that can provide you with insight, for example: American Medical Association (AMA) and the American Academy of Professional Coders (AAPC). As you would with any other program, do your research, perform your due diligence, educate, prepare, and implement. The entire staff, from front desk to provider, should be aware of your financial hardship (copay, coinsurance, or deductible waiver) policies and processes.