While there are many factors involved with running a successful holistic practice, one of the cornerstones of success is having a streamlined medical billing operation. Insurance companies, both public and private, have numerous requirements and legal regulations by which your holistic practice needs to comply - including patient copays. Read on to learn the differences between copays and deductibles, and what to consider before waiving a patient’s copayment!
What are Co-Pays?
A co-payment, or co-pay, is a fixed amount for a covered service, paid by a patient to the provider of service before receiving the service. It may be defined in an insurance policy and paid by an insured person each time a medical service is accessed. For example, if you hurt your back and go see your doctor, or you need a refill of your child's asthma medicine, the amount you pay for that visit or medicine is your co-pay. Co-pays cover the patient’s portion of the cost of a doctor's visit or medication; the remaining balance is then covered by the patient’s insurance company.
Co-pays typically vary for different services within the same plans, particularly when they involve services that are considered essential or routine and others that are considered to be less routine or in the domain of a specialist. For example, co-pays for standard doctor visits are typically lower than those for specialists, while co-pays for emergency room visits tend to be the highest.
What are Patient Deductibles?
On the other hand, a deductible is an amount a patient pays for most eligible medical services or medications before their health plan begins to contribute to the cost of covered services. If the patient’s plan includes co-pays, they pay that flat fee at the time of service - at the pharmacy or doctor's office, for example - and, depending on how their plan works, what they pay in co-pays may count towards their deductible.
After meeting a deductible, patients typically pay co-insurance—a certain percentage of costs—for any services that are covered by the plan and continue to pay the co-insurance until they meet their out-of-pocket maximum for the year. Co-insurance is a portion of the medical cost the patient pays after their deductible has been met. Basically, it ensures that the patient and their insurance carrier each pay a share of eligible costs that add up to 100%.
Issues With Waiving Patient Copays
What seems compassionate and helpful for your patients might get your holistic practice into hot water. Consider the following issues to consider when deciding whether or not to waive a patient’s copay.
Is It Illegal to Waive Insurance Copays?
It is a felony to routinely waive co-pays, coinsurance, and deductibles for patients. Waiving the collection of this portion is illegal and considered health insurance fraud because your office is claiming the wrong charge for services when insurance claims are created. To explain this further, we will use the following example: If your patient has a $10 co-pay, then the insurance company will pay $90 on a $100 bill. However, if the co-pay was waived, the patient’s bill is only $90 total, not $100.
The same laws apply to Medicare, Medicaid, and Tricare patients, but the risk is greater if your office does not comply—healthcare providers may be charged with fraud against a government agency. Waiver of coinsurance raises potential Federal Anti-Kickback Statute, Federal False Claims Act, and state law liability issues.
Waiving Co-pays for Some, But Not All, is Unfair
Your holistic practice must offer hardship programs to all patients - not just those with public health insurance. You cannot forgive a patient’s insurance debt for patients with public health insurance during times of crisis, yet require patients with private insurance to pay full co-pays regardless of their financial circumstances. Your practice’s medical billing operations need to be fair and equitable to all of your patients.
When Should You Waive Patient Co-Pays?
There are different scenarios in which healthcare providers may feel it’s appropriate to waive the patient’s insurance responsibility; scenarios may include patients who would like to extend professional courtesy to colleagues or their families, when patients are in severe financial distress, or when collection efforts have negligible results. Each example involves regulatory and legal issues that healthcare providers must consider, and should be given great consideration without just casually waiving the co-pay.
If a patient is in financial distress, healthcare providers may choose not to collect debts without risking allegations of insurance fraud. For example, if the physician doesn’t collect the patient’s insurance responsibility during a period of extreme financial hardship, the physician can choose not to pursue collection activity against the patient for the co-pay that’s owed.
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Our experts here at Holistic Billing Services believe that our success is your success. From handling medical billing and coding to offering consulting services and much more, our team is dedicated to making it feel like we’re in-house. With a focus on holistic practices, insurance background, and proven consultants, our team can effectively ensure the financial success of clients, allowing your holistic practice to focus on what it does best: treat patients.
Our expertise is rooted in professional, technical, and global billing for hospital and stand-alone holistic care practices. To learn more about how outsourced medical billing with Holistic Billing Services can empower your practice, contact us today. We’ll work with you to build a customized solution that meets the specific needs of your practice and allows you to get back to treating patients.