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3 Patient Charges You Can’t Write Off (and Some You Can)

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3 Patient Charges You Can’t Write Off (and Some You Can)

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Write off

Routinely writing off out-of-network or government program copayments or deductibles without meeting individual financial hardship exceptions will most certainly land your practice in hot water with the OIG and insurers. That is, unless you know exactly how to comply with the fraud, waste and abuse laws about which charges you can write off.

Check these three charges your practice should never write off, along with a few rules about when you can.

1. Never Routinely Write Off Copays or Deductibles

 To avoid potential criminal prosecution or False Claims Act liability, do not routinely waive or write off copays and deductibles. This type of conduct raises red flags and is likely to violate your payer contracts.

Here’s why: The patient’s portion of the insurance fee is part of the cost-sharing that insurers contractually have in place for a reason. If you routinely waive those costs, then you are effectively charging less than the payer’s allotted cost for the service, and thus overcharging the insurer for their portion of the bill.

2. Never Charge Less Than What Medicare Would Pay

You could violate your contract with Medicare if you charge patients less than what Medicare would pay. As noted above, this could come in the form of copy and deductible write offs, but it could show up in other ways as well.

For instance: If a Medicare patient owes you $28 as her portion of a Medicare claim and doesn’t want to pay it, you cannot say “I just won’t file it with Medicare. Instead, I’ll just charge you the cash pay rate, which is $10.” That would be considered another violation of your Medicare contract, because it offers the patient a rate below what Medicare would reimburse.

3. Don’t Write Off Charges for Referrers

You can avoid violating Stark and Kickback statutes by ensuring your practice never offers professional courtesy discounts to physicians and family members who can potentially refer business to you, especially federal program patients.

If you write off their charges — or even waive their copays or deductibles— you could be viewed as exchanging favors for referrals, which could get you into deep trouble.

Here’s How to Compliantly Handle Patient Write Off Cases

There will be situations when you find it necessary to write off some patient balances. For instance, if a patient owes you $7.00 and hasn’t responded to your frequent requests for payment, it may be less time consuming and costly to write off that balance than to hire a collection firm to go after the money.

If you want to offer discounts or free care to indigent patients, it’s essential that you have a financial hardship policy in place covering what qualifies for these circumstances. Follow those policies to the letter without exceptions, and train staff on all of the procedures they must follow so they understand which write off steps they must take to ensure you stay on the right side of the law.

Your best bet is to meet with a healthcare attorney who can provide advice on how to decide when you can write off a patient balance, and when you never should. They can also help you create a financial hardship policy that keeps you complaint.

Get to know the ins and outs of balanced billing, when to write off balances, and much more. Let healthcare attorney Rachel V. Rose, JD, MBA show you the ropes during her online training event, Balanced Billing Laws: Prevent Avoidable Violations and Penalties. Sign up today!


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