It happens from time to time at medical practices: Patients will say they can’t pay their copay due to financial hardship. But your practice knows that it’s a violation of your payer contract to write off copayments — so what can you do?

Check out what the law says, and when you can and cannot offer financial hardship discounts to your Medicare patients.

Copayments Reduce Medicare’s Costs

Part of the reason Medicare uses copayments is to reduce its costs — when patients have skin in the game, they’re sharing the cost of their own healthcare. In addition, copays may make patients think twice about visiting the doctor for the slightest complaint.

But your contracts — from Medicare and other payers — most likely include language that restricts you from waiving these cost-sharing fees, such as copays and deductibles, unless patients meet a financial hardship exception.

Don’t Routinely Waive Copays

As most practices are aware, the Civil Monetary Penalties Law (CMPL) and the Anti-Kickback Statute both consider copayment discounts an inducement in most cases — meaning such discounts may entice patients to visit your practice over another.

For that reason, you can never routinely waive copays, deductibles or coinsurance costs. This could lead to penalties and fines, as well as possible investigations into more serious charges.

But if you waive or discount these cost-sharing obligations only for patients experiencing true financial hardship, then you could be in the clear, according to the CMPL regulations. When it comes to the Anti-Kickback Statute, there isn’t a similar exception based on financial need, and the government may consider exceptions on a case by case basis. For that reason, make sure your patient demonstrates true, genuine financial need before you offer any discounts to their cost-sharing obligations.

How Patients Can Demonstrate Financial Hardship

What constitutes a good faith determination of financial hardship may vary depending on the individual patient’s circumstances. Therefore, it’s important to take a wide variety of variables into account, such as:

• The local cost of living
• The patient’s income, assets, and expenses
• The patient’s family size
• The scope and extent of the patient’s medical bills

Your practice should develop a financial hardship policy that outlines the criteria patients must meet to qualify for any discounts. It should also indicate which types of proof your practice will accept to demonstrate their financial need. Ensure that you’re consistent when applying this policy to your patients so it’s clear that you aren’t singling out any patients for special discounts.