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    The danger of waiving co-insurance

    Editor’s Note: Welcome to Medical Economics' blog section which features contributions from members of the medical community. These blogs are an opportunity for bloggers to engage with readers about a topic that is top of mind, whether it is practice management, experiences with patients, the industry, medicine in general, or healthcare reform. The series continues with this blog by Carol Gibbons, RN, BSN, NHA, who is CEO of CJ Consulting, which specializes in healthcare revenue cycle management. The views expressed in these blogs are those of their respective contributors and do not represent the views of Medical Economics or UBM Medica.


    Over the years, practices have developed many policies about how co-payment and deductibles are collected from patients. In the years that co-pays ranged from $5-$10, and deductibles were $100-$200, practices were much more lenient with patients about collecting that money. 


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    Over time, co-payments have increased dramatically and could be more that 30% of the expected payment on a medical claim.  The one thing that has not changed during this transition is the fact that it is against the law to routinely waive the deductible or co-insurance for a Medicare patient, according to a Fraud Alert issued by the U.S. Department of Health and Human Services in 1998.

    Despite these warnings being issued frequently during the years since 1998, and despite the discussion of this issue during any Medicare training you might attend, there are still healthcare businesses that believe they can get by with waiving co-pays without a policy requiring a hardship evaluation.  

    It was reported in the Poughkeepsie Journal that the U.S. Attorney for New York's Southern District Preet Bharara issued a judgement that collected a $5.3 million fine from a practice for waiving co-insurance and other violations.

    “Hudson Valley Hematology Oncology Associates improperly billed Medicare and Medicaid for reimbursement, costing the taxpayers millions of dollars," Bharara said in a statement. "This settlement not only restores those funds, but involves detailed admissions by Hudson Valley and the imposition of safeguards to ensure against fraudulent billing in the future.” 


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    In essence, if you are not going to collect co-insurance from a Medicare patient, then your expectation is that the fee schedule is 80% reduced and Medicare only owes 80% of the new amount.

    While there was also a billing issue related to the physicians billing a CPT visit code 99212 when the patient was not actually seen by the physician, the process of writing off co-insurance led to the practice having to pay back that 20% on claims where the co-insurance was not collected. The challenge for this practice was there was no process or even attempt to collect the co-insurance from Medicare patients. Practices need to have a process to truly evaluate the financial need for waiving co-insurance of each patient where the co-pay is written off.

    Next: How do you develop this process?

    Carol Gibbons RN, BSN, NHA
    Carol Gibbons brings 30 years of nursing and management experience to CJ Consulting to assist healthcare businesses in revenue cycle ...

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