So, you don’t want to offer services as no cost to the patient. You don’t want to ever say you bill insurance only, you don’t want to routinely write off balances without due diligence of patient’s indigence, etc.
Not only is “bill insurance only” considered to be an inducement for patients and gets the government upset, it is also against any commercial insurance contract you may have signed. So, not only do you get federal penalties you also get civil penalties. That is a deadly combination.
Routinely writing off balances is akin to the “bill insurance only” mistake. If you write off a balance of a commercial carrier coverage you are then changing what your real charge is. This translates into more law breaking in the eyes of the powers that be. For example, if you normally charge $120 and the insurance allows $100 and pays $80, the patient is responsible for $20. If you routinely write off balances, then “legally” your charge is actually $80 and the insurance only owed $64 and the patient then owes $16. You are cutting off your own nose to spite your face! A favorite saying of my mother’s!
Also, you need to be aware of “lowest rate” clauses in your insurance contracts. Many can use that clause to lower your allowables (contracted rate) if they find out you routinely write off patient balances. AND, the biggest rudeness of all, they don’t have to tell you. It will just be routine.
You want to consider carefully how you write off balances for professional courtesy. The first thing the “Fed” looks at is if you are doing it to get referrals from that physician. The next thing they look at is if you offer it to all physicians. In other words, if you do it for one, you must do it for all. This would include family members of the physicians or staff members. The best thing to do is to have a written policy and stick to it. That will keep you covered, as long as the policy doesn’t violate Stark or the Anti-Kickback Statute.
Another interesting issue that can get you into a lot of trouble is writing off balances for patients who may or may not be indigent. This would be another area that you need to have written policies. You need to have a standard for all “indigent” patients and you need to verify the patient fits the standards. Many have used a sliding scale rate off the federal poverty guidelines. For example, if a patient’s proven income is below the federal poverty guidelines, they write off 100%, and if they are at the poverty level they write off 75%, etc. Whatever you decide is reasonable, put it in writing and stick to it.
We have had clients who have been approached by salespeople who offer the free use of a piece of equipment as long as their company can do the billing. Not only does that open you up for trouble for referrals, it also opens up Anti-Kickback questions. You may end up coming out of the situation unscathed, however… how much did the attorney cost you to defend yourself?
HIPAA compliance with written policies and procedures is a tedious job, but it will cover you on many instances such as perceived routine write offs.
If you have any questions, please feel free to contact us. If we don’t have the answer immediately, we will get it for you quickly! Stark and the Anti-Kickback Statute are not the easiest laws to follow nor to understand.
Sue Irwin, CHC, CHBME
Partner, Medical Billing Authority, LLC.