Healthcare providers often encounter situations where they may feel inclined to waive patient cost-sharing amounts such as copayments, coinsurance, or deductibles due to financial hardship, as a professional courtesy, or as an employee benefit. While these actions may be well-intentioned, they carry significant risks that can lead to financial, legal, and compliance challenges.
Insurance companies are increasingly targeting the waiving of patient cost-sharing amounts through payer audits for both in-network and out-of-network providers. Auditors are particularly focusing on routine waivers or discounts that lack clear justification or proper documentation.
The risks of routinely waiving cost-sharing amounts are serious and bring about considerable consequences to a practice. Currently, the Special Investigations Units of major payors in New Jersey are conducting financial audits of providers. Both in-network and out-of-network providers are being audited with the hopes of finding routine waivers of patient payments, which in turn could lead to overpayment demands, penalties, and fines. In flagrant cases, insurance companies have referred this conduct to prosecutors to pursue possible civil monetary penalties under the False Claims Act, or criminal prosecution.
In addition, many payer contracts require providers to make good faith efforts to collect cost-sharing amounts from patients. Consistently waiving these amounts without proper justification may be seen as a breach of contract, leading to potential termination in addition to financial recoupments.
To protect themselves, providers should implement a clear and consistent approach to managing patient cost-sharing. This includes:
- Establishing a Clear Waiver Policy: Providers should have a written policy that outlines when cost-sharing amounts can be waived, such as in cases of financial hardship. Routine waivers or across-the-board discounts should be avoided.
- Documenting Waivers Properly: Each waiver should be carefully documented, including the reason for the waiver, evidence of financial need, and any relevant communications with the patient. This documentation is crucial in the case of an audit or investigation.
- Training Staff: All staff involved in billing and collections should be trained on the proper procedures for handling patient payments and waivers to ensure compliance with payer contracts and regulatory requirements.
- Offering Alternatives: Instead of routinely waiving fees, providers should consider offering payment plans or connecting patients with financial assistance programs to help them manage their responsibilities.
By adopting these best practices, providers can reduce the risk of audits, contract violations, and potential legal consequences while still assisting patients who are genuinely in need.
If you are facing an audit regarding patient cost-sharing or need assistance with your waiver policies, reach out to our firm for tailored compliance guidance. Consult with a healthcare attorney today to safeguard your practice.
