Legal for Doctor to Cover Insurance Co-pay?

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William Million
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Legal for Doctor to Cover Insurance Co-pay?

Post by William Million »

I've been undergoing treatment to deal with insomnia. Without going into the details of my recommended treatment, the office I''m dealing with has offered to provide an expensive product and service (worth about 2,500 - my insurance pays 90%, so about 250 for me). When I hesitated, they offered to waive most of my co-payment, so they would merely charge the insurer.

While obviously a good idea for me, I wonder about the legality and ethics of this arrangement. I believe the purpose of a co-pay is to insure the patient shares some of the burden, possibly preventing him from utilizing unnecessary services. In other words, is it possible that either I or the doctor's office would be in violation of our agreements with the insurer?

Beyond the monetary issue, I'm visiting my GP next week to get his take on the product/service being offered.
ILnative
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by ILnative »

I'll be interested in the responses as our dentist does this as a matter of course to get us to do things (resins, etc.) that we probably wouldn't do otherwise.
Professor Emeritus
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by Professor Emeritus »

ILnative wrote:I'll be interested in the responses as our dentist does this as a matter of course to get us to do things (resins, etc.) that we probably wouldn't do otherwise.
A fairly written piece is at http://www.medicalbillingstudycourse.co ... ng-copays/

In many states it is fraud. It is always a violation of Medicare or medicaid.
ILnative
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by ILnative »

That is interesting - thanks for posting the article. We are far from the age where we are under Medicare - but my guess it is still fraud...
dhodson
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by dhodson »

Correct not allowed.

For reasons mentioned, shouldn't be done as standard business.
docmuscles
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by docmuscles »

Both you and the doctor are contracted with the insurance company to follow their payment setup. You as the insured, the doctor as the provider. If the doctor/dentist does this without your knowledge only they are fraudulent, if you know about it, then your are committing fraud as well and I'm sure your insurance company will seek repercussions if necessary.
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William Million
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by William Million »

Thanks for the replies so far. I now see there is some literature suggesting it can be illegal:

http://www.abramslaw.com/ny_county_medi ... ia_id_1111

However, I suspect any medical office engaging in waiving co-pays must have vetted it through their attorneys, since the stakes are fairly high.
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gasdoc
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by gasdoc »

It is fraud, but occasionally done. The risk is to the office, not to the patient. They should not be offering, but feel free to accept their offer if they do.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by Gill »

I'm not clear how this rises to the level of fraud. My father was a physician and I was sometimes treated by other doctors who were friends of my Dad and who would agree to accept the insurance as payment in full. I believe my father was even paid on occasion by the insurance company. I wouldn't consider this fraud, just a waiver of the co-payment.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by Leesbro63 »

There used to be an auto body shop near us that had a big "SAVE YOUR DEDUCTIBLE" sign. It was there for years.
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gasdoc
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by gasdoc »

Gill wrote:I'm not clear how this rises to the level of fraud. My father was a physician and I was sometimes treated by other doctors who were friends of my Dad and who would agree to accept the insurance as payment in full. I believe my father was even paid on occasion by the insurance company. I wouldn't consider this fraud, just a waiver of the co-payment.
Gill
It certainly is fraud, and every physician knows it. It is only because it is rarely prosecuted that it is still done. I do it myself for people I work with in the hospital and for other physicians and their immediate families. The more you do it, the more you potentially catch the attention of the insurers. Legally, you must discount the insurer by the same percent you discount the patient.
Last edited by gasdoc on Sat Mar 21, 2015 10:38 am, edited 1 time in total.
staythecourse
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by staythecourse »

No that is insurance fraud.

Good luck.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by Gill »

gasdoc wrote:
Gill wrote:I'm not clear how this rises to the level of fraud. My father was a physician and I was sometimes treated by other doctors who were friends of my Dad and who would agree to accept the insurance as payment in full. I believe my father was even paid on occasion by the insurance company. I wouldn't consider this fraud, just a waiver of the co-payment.
Gill
It certainly is fraud, and every physician knows it. It is only because it is rarely prosecuted that it is still done. I do it myself for people I work with in the hospital and for other physicians and their immediate families. The more you do it, the more you potentially catch the attention of the insurers. Legally, you must discount the insurer by the same percent you discount the patient.
Are you saying that professional courtesy is fraud? I guess I can see the argument that you are overstating the insurance claim because that is not what you are actually charging the patient.
Gill
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by Lafder »

There is a slight difference between charging and not following through on collecting, and not charging.

Docs do this with sliding fee scales in a way. My full fee is 123, but I will only collect 123-xyz from you.

The doc is not taking the copay amount and paying it to anyone, they are simply not collecting it.

As others have said, this kind of thing is done all the time. Your point is well taken, and part of the intention of copays. It is explicitly not allowed by some insurance companies in their agreement. However docs often see patients when they do not have the copay, and never collect it, even with those insurances. Docs on this board have admitted it is often SOP (standard operating procedures).

The bottom line is, if you are not comfortable with it, do not do it.

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gasdoc
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by gasdoc »

I believe that professional courtesy is fraud if you do not discount the insurer the same as the patient. Our hospital does a professional courtesy for docs in an interesting way- they send us a 1099 misc as if the amount forgiven was a payment for services, so although the price of the hospital services was discounted, we are taxed on that amount as if it were a payment to us.
Last edited by gasdoc on Sat Mar 21, 2015 2:08 pm, edited 1 time in total.
island
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by island »

Yup, fraud.
dhodson
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by dhodson »

not sure where the discount the insurer comes into this. Pretty much all the contracts say you have to collect the copays. That doesnt get around it and frankly there is no way to really discount the insurer and not create a huge headache for billing dept. The fees for service have already been agreed upon. Now as someone mentioned, if one wants to try to skate around it then what they claim is they just didnt collect the copay. They were trying really hard to but for some reason it slipped through the cracks. Again if done once in a blue moon nobody cares. If done all the time especially as a way to entice business then its gonna be a problem.
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gasdoc
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by gasdoc »

dhodson wrote:not sure where the discount the insurer comes into this. Pretty much all the contracts say you have to collect the copays. That doesnt get around it and frankly there is no way to really discount the insurer and not create a huge headache for billing dept. The fees for service have already been agreed upon. Now as someone mentioned, if one wants to try to skate around it then what they claim is they just didnt collect the copay. They were trying really hard to but for some reason it slipped through the cracks. Again if done once in a blue moon nobody cares. If done all the time especially as a way to entice business then its gonna be a problem.
Well put, as usual, dhodson. I do believe the only legal out is to discount the insurer, but as you mentioned, I am not aware of anyone actually doing this.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by TradingPlaces »

Insurance fraud. Felony.

It is unclear who should be prosecuted for this: doctor's office or patient.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by TradingPlaces »

gasdoc wrote:I believe that professional courtesy is fraud if you do not discount the insurer the same as the patient. Our hospital does a professional courtesy for docs in an interesting way- they send us a 1099 misc as if the amount forgiven was a payment for services, so although the price of the hospital services was discounted, we are taxed on that amount as if it were a payment to us.
Got confused here.

Let's say there are 4 parties:

- hospital,
- contracted doctor at the hospital,
- insurance company,
- patient.

Are you saying that hospital sends a 1099 to the doctor or the patient?
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gasdoc
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by gasdoc »

TradingPlaces wrote:Got confused here.

Let's say there are 4 parties:

- hospital,
- contracted doctor at the hospital,
- insurance company,
- patient.

Are you saying that hospital sends a 1099 to the doctor or the patient?
In this case, the hospital is trying to give a patient, who happens to be a doctor, a professional courtesy for the hospital charges incurred during a medical procedure. The hospital sends the patient, who happens to be a doctor, a 1099 for the amount of the discount. Clear as mud?
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by White Coat Investor »

When I give professional courtesy, I waive the entire payment, not just the deductible and not just the co-insurance.

I agree the legal way out is to not pursue the co-pay.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by bberris »

And if the patient can't pay the deductible? How much hell should the doc put the patient through in order for it not to be fraud?
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by SGM »

I sent a collection letter, but never refused to see a patient because they or their relatives wouldn't pay the copay or the deductible. Some insurances would not pay any physician outside of their system. I treated them anyway as no physician who came to the nursing home participated in their plan. I sent a collection letter, but would treat them regardless of payment. I did not use a collection agency so sue me.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by cutterinnj »

MD here.

It is ILLEGAL to not charge a co-pay.
It is considered an INDUCEMENT; your incentivize patients to take an expensive (for the insurance company) procedure with no risk to the patient.

Additionally, it is considered ANTI-COMPETITIVE; you encourage patients to go to you vs your competition because you don't charge what the insurance company mandates; a big no-no in healthcare.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by toofache32 »

bberris wrote:And if the patient can't pay the deductible? How much hell should the doc put the patient through in order for it not to be fraud?
For office visits, If they can't pay the deductible then they come back when they can pay in my office. I'm not buying their care for them. Who else here buys their goods and services for their own clients?
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by cutterinnj »

toofache32 wrote:
bberris wrote:And if the patient can't pay the deductible? How much hell should the doc put the patient through in order for it not to be fraud?
For office visits, If they can't pay the deductible then they come back when they can pay in my office. I'm not buying their care for them. Who else here buys their goods and services for their own clients?
EXACTLY.

When my electrician comes by to fix something, payment is due upon services rendered. Why would this be any different?

An issue many practices find is that humans collect copays, balances due, etc... Humans are fallible and are easily played by emotions.
My practice instituted a kiosk system because of this; when a patient comes to check in, he WILL pay the balance and co-pay. If he doesn't, he can reschedule his appointment to a time when he can pay it.

If he has an "emergency" or "MUST" be seen immediately, he can go to the ER, where we are available for true emergencies 24/7/365.

This privileged air that many patients have no longer works in the era of ACA/high deductible plans; it's one of the reasons why many private practices are going belly up, and is just plain unsustainable.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by goodenyou »

No, but it happens all the time. With higher and higher deductibles and co-pays, you may as well write it off as a NO Charge. We get a lot of checks for $5 from insurance companies. That's the difference between the office charge and the co-pays. With high deductible/co-pay plans, the doctor would get zero if they wrote off the co-pay.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by HIinvestor »

There is a VERY expensive IPF medication and a program whereby the pharma company will pay the copay for the first 6 months of treatment. Is that fraud as well? I think the drug is 6 figures a month.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by obgraham »

It's illegal. Here's the scenario:

Doc charges $100 to remove your schnitzel.

Contracts with insurance company, agrees to accept reimbursement of 80% of the "usual and customary" fee, and patient is to pay $10 copay. Accepts this deal because he's guaranteed the $80+$10, rather than having to chase the whole $100.

Now he waives the $10 copay. Insurance legitimately says "well your customary is not $100, it's $90. So we'll only pay 80% of that, or $72". "And by the way you still have to chase the other $8 copay or you are in violation of your contract."

Carry this to the extreme. Doc gets nothing! That's why legally, "professional courtesy" really should be no charges, no payments.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by BolderBoy »

Professor Emeritus wrote:
ILnative wrote:I'll be interested in the responses as our dentist does this as a matter of course to get us to do things (resins, etc.) that we probably wouldn't do otherwise.
A fairly written piece is at http://www.medicalbillingstudycourse.co ... ng-copays/

In many states it is fraud. It is always a violation of Medicare or medicaid.
Second that opinion. PM me if you need more proof.
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heartwood
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by heartwood »

cutterinnj wrote:MD here.

It is ILLEGAL to not charge a co-pay.
It is considered an INDUCEMENT; your incentivize patients to take an expensive (for the insurance company) procedure with no risk to the patient.

Additionally, it is considered ANTI-COMPETITIVE; you encourage patients to go to you vs your competition because you don't charge what the insurance company mandates; a big no-no in healthcare.
I've searched and can't find it, but recall a NY Times column in the last several months (half year?) that had a similar conclusion that it was an inducement. As I recall the doctor-author eventually considered it unethical and charged co-pays going forward.
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LowER
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by LowER »

When I hear patients remark that if they return to Cancer Gone Clinics of America, that the clinic is willing to pay their air flight and accommodations for the exact same treatment that they can get in this multi-million person city, I do get a little perturbed, especially when I know the patient will get dumped when insurance runs out. But I guess that's different than covering a $4 co-pay for an unequivocally handicapped person that has worn the same clothes to every appointment for 2 years and probably every day in between.

In what universe is giving anonymously and altruistically (no 501C3 deductions here) to the underserved a felony?

Oh, this one.
Last edited by LowER on Sun Mar 22, 2015 11:33 pm, edited 1 time in total.
island
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by island »

cutterinnj wrote:MD here.

It is ILLEGAL to not charge a co-pay.
It is considered an INDUCEMENT; your incentivize patients to take an expensive (for the insurance company) procedure with no risk to the patient.

Additionally, it is considered ANTI-COMPETITIVE; you encourage patients to go to you vs your competition because you don't charge what the insurance company mandates; a big no-no in healthcare.
And that inducement is considered in violation of anti kickback statutes I believe.
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LowER
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by LowER »

And another great reason to save some money.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by BolderBoy »

LowER wrote:When I hear patients remark that if they return to Cancer Gone Clinics of America, that the clinic is willing to pay their air flight and accommodations for the exact same treatment that they can get in this multi-million person city, I do get a little perturbed, especially when I know the patient will get dumped when insurance runs out. But I guess that's different than covering a $4 co-pay for an unequivocally handicapped person that has worn the same clothes to every appointment for 2 years and probably every day in between.

In what universe is giving anonymously and altruistically (no 501C3 deductions here) to the underserved a felony?

Oh, this one.
A couple of decades ago, around Christmastime each year for several years I would let it be known that I would provide my [anesthesia] services at no charge. Served multiple purposes, among them that many hospitals tend to slow down significantly around Christmastime and they send the staff home early or call them off (without pay); in the community where I was there were a great number of uninsured, etc. So for those few years, our schedule continued busy through that time, employees had work and some of the uninsured had one less bill to expect.

Then I got the letter from Medicare explaining that providing for free to some, the same service I was billing Medicare for was FRAUD and that if I didn't cease and desist immediately, my "case" would be handed over to the US Attorney for prosecution. Alas.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by bberris »

toofache32 wrote:
bberris wrote:And if the patient can't pay the deductible? How much hell should the doc put the patient through in order for it not to be fraud?
For office visits, If they can't pay the deductible then they come back when they can pay in my office. I'm not buying their care for them. Who else here buys their goods and services for their own clients?
I would too. I wasn't clear about what I meant. I wanted to say that if a doctor chooses not to aggressively collect from an indigent patient, that does not seem immoral to me. Fraud? I don't know.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by wannabebogler »

I'm curious how many of you have legal opinions on this. I have consulted with as many healthcare attorneys that I can find in my area that are knowledgable on the subject (and spent a few thousand on consulting fees) and not one has indicated this is fraud, outside of the issue with government-related entities.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by fpr »

The concept is as follows:

If a physician has a contract with an insurer he is obliged to collect the co-payment unless waived for the patient's inability to pay (indigence). Assume a $100 fee for the procedure. If the patient's insurance policy covers 80% for example and the patient has a 20% co-payment the physician will receive $80 from the insurer and $20 from the patient. If the physician waives the $20 copay (unless for indigence) his total collected is $80. The insurer's point of view is that if the physician was willing from the start to accept $80 for the procedure he should have billed $80 and received $64 from the insurance company and $16 from the patient. This is where the fraud element enters the situation.

If the physician does not have a contract with the insurance company and the patient is seeing the physician "out of network," the physician may bill the patient and collect from the patient as he chooses, but he should not give the patient a receipt for submission to the insurer for "out of network" benefits that reflects a different price than what he truly charged the patient.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by dm200 »

island wrote:
cutterinnj wrote:MD here.

It is ILLEGAL to not charge a co-pay.
It is considered an INDUCEMENT; your incentivize patients to take an expensive (for the insurance company) procedure with no risk to the patient.

Additionally, it is considered ANTI-COMPETITIVE; you encourage patients to go to you vs your competition because you don't charge what the insurance company mandates; a big no-no in healthcare.
And that inducement is considered in violation of anti kickback statutes I believe.
While I do not dispute that such a practice may be improper, etc. - I find it curious that an action of offering a lower price (which on its face sure looks like price competition) would be considered anti-competitive.
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Re: Legal for Doctor to Cover Insurance Co-pay?

Post by dhodson »

You need to realize why as noted above.

If someone wanted to be more competitive then they could negotiate for a lower contract reimbursement.
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