Very often physicians who wish to accommodate patients, either out of a desire to be helpful due to poor economic conditions or just to be friendly, might decide to waive the co-payment of the patient and just bill the insurance company, whether it is an HMO or Federal Government provider (Medicare, Medicaid), for the balance of the payment. This can raise various concerns during an audit by an insurance company or government payor, and could have very large, unforeseen ramifications for the provider. Depending upon the aggressiveness of the carrier and the conduct of the provider, the waiver of co-payments could be categorized as a form of fraud or kickback.
The theory behind this is that the co-payment, if waived, can either be seen as an incentive to encourage the patient to come back (i.e., money reimbursed to the patient since they did not have to lay out their copay) or it can be seen as a discount given to the patient. The problem arises as this discount is not taken off the entire bill, but only the patient’s portion. Legally it should be applied to the entire amount of the bill before it is submitted to the HMO, government payer, or other third party payor in such a way that would entitle the insurance company to reimburse based on the reduced amount as well.
The potential for this being labeled as a kickback or other type of fraud is potentially dangerous when you factor in that many government statutes provide criminal penalties for violating the various anti-kickback statutes. Additionally, depending upon the state, there could be a state or local prohibition or criminal penalty applied for this type of conduct as well, in addition to any fines and penalties for violating the civil portion of various anti-kickback statutes.
It is accepted and understood that not every patient can pay their bill, especially in underserved and poor communities. However, the provider does not serve as a guarantor or surety for the patient’s co-payment.
The provider must make a good faith effort to collect any outstanding co-payments. Rather than a waiver, if the patient is unable to pay at the time of service, it is preferable to send a physical bill for the co-payment and make reasonable attempts to collect. If beyond that, the patient is incapable of making the payment, then at least the provider has not unilaterally waived the co-payment.