In most states, it is illegal to routinely waive copays and deductibles for patients. Health Care providers who do this may be charged with the crime of health insurance fraud.
Automatic Waiver of Co-pays/Co-Insurance: May Expose Healthcare Providers/ Facilities to Fraud Allegations or Civil Liability.
There are potential legal ramifications for those who waive copays or deductibles. In a recent federal court case, a provider sued Cigna for failing to pay out-of-network claims. Cigna then countersued the provider for potential injunctive relief under certain ERISA laws, and the court found there was merit for the countersuit; so Cigna was able to attempt to obtain damages for unjust enrichment and intentional tortious interference with contractual relations.
There are primary contentions that private and governmental insurers set forth in asserting that the waiver of co-payments and co-insurance is an improper business practice:
- First, the waiver of copays/deductibles is an improper inducement or kickback, used to entice patients to get care, or more care, at that particular provider over another;
- Secondly, an improper waiver of copay/deductible is actually a false claim filing. The rationale is this: if the cost of providing a service is $100, and 20% is to be covered by the patient, the insurance company will then cover 80%, or $80. However, if the physician routinely waives the patient’s obligation, then the physician is actually only charging $80 for the service, and the insurance company should then be responsible for 80% of $80, or $64. Billing the insurance company for $100 is then considered an actionable false claim. [iv]
In Texas, the Attorney General has made it clear that “the payment of benefits under an assignment does not relieve the covered person of contractual responsibility for the payment of deductibles and copayments. A physician or other health care provider may not waive copayments or deductibles by acceptance of an assignment.” This means that when the physician accepts assignment from the patient, he is not relieved from seeking payment from the patient of the applicable co-payments and deductibles. Although the opinion does not impose a mandatory obligation on the collection of co-payments and deductibles, it does suggest that telling the prospective patient that these will be waived may be interpreted as an “inducement” for the patient to use the facility. In cases cited by the Attorney General, these may be deemed an unfair trade practice or violate Texas illegal remuneration laws.
The Bottom Line
At STAT Emergency Center, we comply with all government agencies and insurance carrier’s legal binding agreements set forth in their contracts. We advocate a policy of being truthful and disclose information to our patients on policies and procedures that we are obligated to follow in order to operate our Free Standing Emergency Centers.
At STAT EMERGENCY CENTER WE HAVE ADOPTED THE FOLLOWING POLICIES:
- Adopted the policy of making every reasonable effort to collect all deductibles and copays in order to legally comply with all insurance carriers and or government entity—unless the patient can demonstrate a financial hardship.
- We have established a procedure patients must use to demonstrate a financial hardship, and document it. Also, make sure the patient signs an acknowledgment that he or she has a financial hardship.
- We respectfully ask if there is any amount that a patient feels comfortable with or can afford.
- We implemented a policy to collect full /partial co-pays at time of visit or bill out.
Our patient’s health is important to us and we understand financial hardship burdens. We will make every effort to assist our patients during these special circumstances.
“Trusted for Our Experience, Chosen for Our Care”