If you are, you NEED to read on…
Scenario #1:
Federally Funded Plans – Because of Anti-kickback Federal Laws and the Federal False Claims Act, you are NOT to give any discount to a patient for their assigned patient responsibility under any federally funded plans (with the only exception being proven financial hardship*). These federally funded plans include, but not limited to, Medicare, Medicaid, Medicare/Medicaid Supplements, Medigap (secondary to Medicare). An illegal Anti-kickback occurs when a provider offers remuneration for referrals. The definition of remunerations has been expanded to include “waiver of coinsurance and deductible amounts (or any part thereof)”. The patient receives the remuneration (discount) and tells friends and family which is considered a referral. A violation of the Federal False Claims Act would also occur, if one charge amount is billed to the payer and the payer processes accordingly, the provider turns around and offers the patient a discount to their responsibility, the claim is then considered to be misrepresented to the payer. For example: a provider charges Medicare $100 for a procedure. Medicare pays $80, and the provider waives the co-pay of $20. In essence, the actual charge should have been $80, which means that Medicare should only have paid 80% of $80, or $64. Because of the misrepresentation, Medicare overpaid the claim by $16. Other charges could include mail fraud, common law fraud, and possibly others. Any of these violations carry very heavy fines into the tens of thousands of dollars per claim and imprisonment.
Scenario #2:
Contracted Payers – Under your contract obligations with payers, you are NOT to give any discounts to a patient for their assigned patient responsibility (with the only exception of proven financial hardship*). Patients are responsible for their copay, coinsurance, and/or deductible amounts. Most, if not all, contract language forbids discounting patient responsibility. A violation will be a breach of your contract and can fall under the Federal False Claim Act by misrepresentation of the original charge amount. The provider can be subject to civil and criminal penalties for violations under this scenario.
Scenario #3:
Non-Contracted Payers – Though there is not a contract the provider is bound by with non-contracted payer, again the Federal False Claim Act could come into play by submission of a false claim. The only exception is again proven financial hardship*. Violations of the False Claim Act can be punishable through criminal and civil penalties.
Scenario #4:
Professional Courtesy – Though this has been done for years, this type of discounting can be seen as being in violation of Anti-kickback Laws. Federal Law prohibits any payment or inducement that might have a tendency to affect referral decisions. Giving professional courtesy to ALL physician/providers without any conditions might be defensible. However, the court would probably rule this as a prohibited inducement if the government could prove the majority of providers receiving the courtesy were referring providers. The penalties for this type of prohibited activity would be stiff fines and imprisonment.
Scenario #5:
BlueCross BlueShield Kansas – If you are a Kansas provider and are contracted with BCBS KS, there is contractual language you need to be aware of PRIOR to giving ANY discounts (including self-pays). If you are not familiar with this language, please contact Stephanie Kurtz in our office.
*Proven Financial Hardship: A patient’s financial hardship must be proven, which includes copies of paychecks, tax returns, etc. to discount patient responsibilities. There must be written proof, not just the word of the patient. ABI has drafted a financial hardship policy and procedure for your convenience which you may take advantage of if you do not already have in place.
What is the reasoning behind not allowing discounting of patient responsibilities? The primary reasoning behind these laws/rules is to help eliminate overuse of healthcare services by patients. If the patient’s responsibility is getting waived, there is no reason to keep them from going to the doctor for no real reason. This then drives up payments from payers and in turn drives up healthcare costs. Patients who get their responsibility waived are also likely to tell their friends who will in turn go to that provider. This is seen as an uneven playing field for other providers where they lose patients.
Please feel free to contact Stephanie Kurtz if you have any questions regarding any of the above discounting areas, would like website locations to read further, or would like more information on the ABI financial hardship policy and procedure, (316) 281-3710.
abinsights Contact Information
abinsights readers are invited to submit comments, questions, tips, and suggestions for articles on any subject related to billing, collections, coding, reimbursement, and compliance. Send to: Anesthesia Billing, Inc., P O Box 388, Newton, KS 67114-0388. Phone 316-281-3700. Fax 316-282-4322.
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Reasonable attempts have been made to be accurate. However, medical billing, collections, coding and compliance are part science, part art, and even experts sometimes differ. Neither Anesthesia Billing, Inc., the editors, publisher, contributors, or consultants warrant or guarantee the information contained will be applicable or appropriate in all situations. For information specific to your practice, consult a qualified professional.
The information included in this publication is provided, among other things, to alert you to legal developments and should not be considered legal advice. Specific questions about how this information affects your particular situation should be addressed to your attorney.
Editor: Philip Blann (pblann@anesthesiabilling.com).
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