Too many home medical equipment companies still confess to me
that they do not put much effort into seeking copays and
deductibles from customers. With competitive bidding and other
reimbursement programs belt-tightening, reducing the profit margin
on many items of DME as well as services and supplies, it is more
important than ever to implement efficient and effective procedures
to maximize collection of all monies due.
I suspect one reason some companies fail to pursue these
payments is because they perceive that customers will not utilize
their services if they are forced to make copay or deductible
payments. I question the accuracy of this perception. Many
customers will complain about payment, and some of them may require
repeat efforts for collection. But I am dubious that many customers
would actually switch providers, particularly in those markets
subject to competitive bidding.
Moreover, the routine waiver of federal program copayments and
deductibles can land HME companies in hot water, the HHS Office of
Inspector General signaled in a 1999 advisory opinion. Opinion No.
99-6 scrutinized the waiver of copays by a hospital and its
affiliates, and the message of the opinion should ring loudly for
all home care companies.
“Where remuneration is paid purposefully to induce
referrals of items or services paid for by a federal health care
program, the anti-kickback statue is violated,” warned the
OIG. “Waivers of federal health care program coinsurance and
deductible amounts implicate the anti-kickback statue because such
waivers may constitute an inducement to customers to use services
in exchange for something of value, i.e., the forgiveness of a
financial obligation.”
This message is not new. The OIG told providers in a Special
Fraud Alert back in 1991 that “providers who routinely waive
Medicare Part B coinsurance and deductibles may be held liable
under the anti-kickback statue.” The absence of these payment
amounts make customers “less conscientious,” causing
them to select services because they are free rather then medically
necessary.
This warning doesn't mean you must give up waiving copays and
deductibles altogether. It isn't a problem to waive copays if you
establish and document the customer's financial hardship. But
waivers must not be determined by using generalizations, such as
discounting or waiving copays and deductibles a certain percentage
across the board because that is the percentage of “hardship
cases” the company handles. Nor may it be used whenever a
customer pleads poverty, nor whenever a customer fails to respond
to the first billing invoice. Waivers must be determined on a
case-by-case basis.
Also, documentation of the financial troubles must be more
concrete than just labeling cases as a “hardship” if
the patients have trouble paying. You should create a form to
determine patients' eligibility for waivers by requesting their
income and expenses information, plus any unusual financial
circumstances. Be sure that the form contains a sworn statement
clause that requires the customer to supply true information.
In fact, Medicare has specific rules detailing what must be done
to establish hardship. These rules are straightforward and, in my
opinion, not unfair. If a Medicare customer wants to claim
financial hardship, he or she should be prepared to offer
information to support that contention. I even recommend that an
HME supplier adopt the Medicare rules for all customers.
Regardless, if a federal beneficiary will not comply with these
requirements, copays and deductibles should not be waived. If your
company nonetheless offers waivers to these customers, well, just
watch your back. At some point the feds will be heading your
way.
I often advise gathering even more information about a hardship
customer's financial status. I agree that HME companies tread a
fine line between offering assistance with waivers and intruding on
patients' lives and making the process of getting equipment or
services too taxing. It is important to find the right balance.
Read more Compliance
University columns.
Neil Caesar is president of the Health Law
Center (Neil B. Caesar Law Associates, PA), a national health
law practice in Greenville, S.C. He also is a principal with Caesar
Cohen Ltd., which offers compliance training, outsourcing and
consulting and the author of the Home Care Compliance Answer Book.
You can reach him at 864/676-9075 or ncaesar@healthlawcenter.com.
Materials in this article have been prepared by the Health
Law Center for general informational purposes only. This
information does not constitute legal advice. You should not act,
or refrain from acting, based upon any information in this
presentation. Neither our presentation of such information nor your
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