Offering Discounts (Or Waivers) Of Coinsurance/Copayments To Patients As An Out-Of-Network Provider

Commercial payors are actively looking for ways to reduce payments to out-of-network providers. One area of focus is discounts and waivers of patient copayments and deductibles by out-of-network providers. In the eyes of these payors, coinsurance/copayments are essential to incentivizing patients to use in-network providers, and discounts on (or waivers of) coinsurance/copayments by out-of-network providers often result in higher costs to payors.

To challenge these discounts, some payors have denied reimbursement on claims where the patient's copayment/coinsurance has been waived by an out-of-network provider. Others have taken legal action, bringing cases for fraud and other claims, and arguing that they are not required to pay for items or services for which the patient is not billed. There has been a special focus by some payors on instances where the provider "overstates" its charges in order to recoup the discounts or waivers of coinsurance/copayments it offers to patients.

The legal landscape is evolving on this issue; however, there are cases on the docket that may address certain aspects of this issue sooner rather than later. Stay tuned to Fox Rothschild's Physician Law Blog for updates.

In the interim, here are a few tips to keep in mind when considering whether to offer discounts on (or waivers of) coinsurance/copayments with respect to out-of-network plans:

Consider offering the discounts solely in return for prompt payment by the patient. Under the federal Anti-Kickback Statute and other state anti-kickback laws, discounts could be considered remuneration to patients in exchange for purchasing of health care services. However, the U.S. Office of Inspector General (OIG) has acknowledged that discounts for prompt payments of coinsurance/copayments may be permissible if they are not intended to induce purchases of services. Note that the amount of such discounts should correspond to the savings in collection and billing costs of the Practice. Consider disclosing to payors your intent to offer the discounts to patients. Based on recent case law, if a payor is aware of the out-of-network provider's intent to offer discounts to patients, the payor is less likely to have a case for fraud against the provider. See North Cypress Medical Center...