This question comes up from time to time. And, it seems harmless enough. Right? Some of our clients are in a tight financial situation and it would be difficult for them to manage a copay. And since we are empathic people, we want to help them out by taking away some of their financial stress. It seems harmless, but it isn’t.

Believe it or not, waiving copays, co-insurances and deductibles violate federal anti-kickback statute and is considered insurance fraud.

How you might ask?

It misrepresents the actual charged amount for the service. Let’s say you see a patient who has a 50% co-insurance. You charge $100 a session. The insurance company’s allowed amount is $100. Insurance pays $50 and your patient pays $50. If you waive the co-insurance, the patient does not pay anything and the insurance pays $50. Insurance sees that the cost of the session is actually $50 and your claim stated the charge was $100. That’s insurance fraud, charging more than the actual amount of the session. 

Insurance companies see copays, co-insurances, deductibles as the member’s shared costs and obligations. Many, if not all, HMOs specifically state that a provider cannot see a patient until the copay has been made.

You’ve probably seen signs in your own doctor’s office about payment must be made prior to services delivered. And that’s why.

But that’s not the only reason. It’s illegal to routinely waive copays, co-insurance, and deductibles. There is also something known as enticement. You cannot waive a patient’s copay in order to entice and encourage more patients to come to your practice.    

Federal insurance programs, like Medicare, are very specific about not waiving the patient’s responsible portion. If a patient was in a position to help the provider get more business by saying that they don’t have to pay, it’s considered enticement and violates anti-kickback laws. Providers cannot coerce or influence patients to come see them in a way that constitutes unfair business practices.

Waiving a copay is not as harmless as it seems.

So what do you do if your patients cannot afford their copays? There are some options available. You could offer a payment program. This helps people to cover their costs, but over a period of time. 

Let’s say that a patient’s copay is $25 a session and that person comes to see you 4 times. They would have a total expense of $100. If they could not afford to pay, you can offer them a payment plan where they could pay, for example, $20 per month over a 5 month period.

You could also waive or reduce the copay if the patient met guidelines for financial hardships. This is something you would set up in advance. You would create a policy that states if a patient earns under a certain income amount, the copay would be reduced by a specific amount. There needs to be proof of hardship, it must be documented in the patient's chart, and it cannot be given on a regular basis.

So, there are ways to help out patients who cannot afford to pay the copay, co-insurance, or deductible. You just need to be thoughtful about how you apply this waiver in terms of your business policy. 

So tell me...have you ever waived a patient's copay?

As a Psychologist with a thriving business, I believe that owning an insurance based private practice is the key to financial freedom, professional freedom, and personal freedom. If you have questions or need help creating your own practice, contact me at Robin@DrRobinMyers.com. I offer Coaching and Consulting Services.