Professional courtesy discounts have a long history in the medical profession. Originally developed to create relationships among providers, these policies were later extended to additional medical personnel and employees. But in recent years, it’s become a less common practice due to the complex nature of health insurance programs. Now, providers offering professional courtesy risk running afoul of fraud and abuse laws and payer contracts.

In some cases, you’re perfectly within your rights to offer professional courtesy discounts. Keep these rules in mind as you navigate your path.

Don’t Offer Discounts to Medicare/Medicaid Patients

You should never extend professional courtesy discounts to providers or their immediate family members if they’re on federal health insurance. This includes Medicare, Medicaid and any other federal healthcare programs.

Once you know that the person seeking the professional courtesy discount isn’t covered by a federal payer, you can move on to determine whether you meet the requirements.

Meet These Five Requirements

CMS has published regulations regarding financial relationships between physicians and entities furnishing designated health services. In those documents, CMS states that a professional courtesy offered by an entity with a formal medical staff to a physician or a physician’s immediate family member or office staff doesn’t constitute a financial relationship if all of the following conditions are met:

• • The courtesy is offered to all physicians or bona fide medical staff members in the local community
  • The courtesy does not take into account the volume or value of referrals or other business generated between the parties
  • The items or services provided are routinely provided by the entity
  • The entity has a professional courtesy policy in writing and approved in advance
  • The courtesy is not offered to a physician (or immediate family member) who is a federal healthcare program beneficiary, unless there has been a good faith showing of financial need

AMA: Use Your Discretion

The American Medical Association’s Judicial Council has also weighed in on professional courtesy discounts. The organization states that physicians should only “Extend professional courtesy at their discretion, recognizing that it is not an ethical requirement and is prohibited in many jurisdictions.”

Remember that you must treat professional courtesy patients the same as your paying patients when it comes to quality of care. You can’t treat another doctor’s family member using a higher level of care than your other patients.

It’s important to check your state, city or other local laws, as well as your local professional licensing organization, to ensure they don’t have rules in place about providing discounts.

Never Waive Copays or Deductibles

No matter which insurer your patient is with, you should never waive or discount copays or deductibles unless there is a documented showing of financial need or you obtain permission from the health insurer first.

Confirm that you have a written professional courtesy policy in place that satisfies the Stark law regulations, and that your practice attorney reviews it. The policy should outline the parameters of your discount policy, who it applies to and when it doesn’t apply. Have your lawyer confirm that your policy is sound before offering even a single discount to a provider or their family.

Discounting your practice’s charges can lead to huge fines and penalties. Let healthcare attorneys Ashley Watson, Esq. and Daphne Kackloudis, Esq., keep you on the right track during their latest online training, Stop Violating Professional Courtesy and Patient Discount Laws. Sign up today!

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