When the topic of patient cost forgiveness comes up in an SIU, you
may initially wonder what the big deal is with cost forgiveness. This
does not appear to be money that directly impacts an insurance company, and on
the surface may sound like a good thing for patients that may have a financial
hardship. However, once you start researching the issue a little further
it becomes easier to see why it's not always as benign as it seems.
Yes, for a patient that may not have enough money to cover a large
deductible or coinsurance amount on a surgery or inpatient stay they may need,
payment plans may be needed or the opportunity to work with a doctor or
facility to lessen the burden. In an AMA opinion piece on the code of
medical ethics, it states "In some cases, financial hardship may deter
patients from seeking necessary care if they would be responsible for a
copayment for the care. Physicians commonly forgive or waive copayments to
facilitate patient access to needed medical care. When a copayment is a barrier
to needed care because of financial hardship, physicians should forgive or
waive the copayment."[1]
However, that is not the situation an SIU is looking to uncover
and stop. The problem arises when a provider actively and routinely
waives all patient responsibility for his/her patients because they want to
hide the true cost of what they are billing for from their patients. Many
times, these are unnecessary and excessive services. In the same AMA
article it states "Cases have been reported in which some of these clinics
have conducted excessive and unnecessary medical testing while certifying to
insurers that the testing is medically necessary. Such fraudulent activity
exacerbates the high cost of health care."
In addition, routinely waiving patient copays could also be
construed as fraud. This article poses an important view to take into
consideration: "Providers who waive copays are exposed to HIPAA risk
because, arguably, the provider is misstating his or her charge to the
commercial plan. For example, assume a $100 total charge where the patient has
an 80/20 plan. If the provider waives the patient's obligation to pay 20%,
then, again arguably, the commercial plan owes only 80% of $80.
Different states have different policies as to what constitutes
insurance fraud, and in some locations, waiving copayments and deductibles
might qualify as fraud. Be aware of your state's regulations, and review your
policies and procedures. If you routinely waive these charges or offer
'insurance-only,' you're not only potentially hurting your practice's financial
health but also potentially committing fraud."[2]
In addition, Medicare and Medicaid also have policies regarding
patient responsibility. If someone is a preferred provider under
Medicare, they must collect the difference between what is allowed and what is
paid. It's against the law for a provider to write off the designated patient
responsibility.[3]
So how does an investigator go about starting an investigation for
this activity? It can be difficult to find through data analysis.
Healthcare Fraud Shield recommends using a data mining tool such as PostShield
to identify providers that should be collecting fees from members. In addition,
investigators can review advertising habits for suspect providers and expand to
patient outreach to confirm routine waiver of fees via confirmation letters or
phone surveys. A review of records can also be helpful in these cases, as
the provider needs to demonstrate in writing that the patient has a financial
hardship before writing off the patient's financial responsibilities.
When requesting the patient records always ask for the patient's financial
ledger. Last, but not least, it is recommended to review your insurer's
policies regarding fee forgiving prior to starting an investigation of this
nature.
Questions or comments? Please feel free to contact
Healthcare Fraud Shield's Subject Matter Experts at SIU@hcfraudshield.com for
more information.
[1] AMA
[2] Risk
of Waiving Copay
[3] Medicaid/Medicare