Should you waive copayments for Medicare patients?
The Importance of HIPAA
Most Medicare policies concerning the treatment of copayments and deductibles are included in the Health
Insurance Portability and Accountability Act of 1996 (HIPAA). Before HIPAA, Medicare treated copayments
and deductibles similar to private payers.
HIPAA concluded that free services are likely to influence a patient to receive some other paid services and
should be considered a form of remuneration. Since offering remuneration to patients is illegal, waiving
copayments and deductibles are illegal. However, HIPAA did allow certain waivers to remuneration to patients
and allow practices to waive copayments and deductibles if:
- The waiver is not offered as part of any advertisement of solicitation.
- The practice does not routinely waive copayments or deductible amounts.
- The practice waives the copayments or deductible amounts after:
- The patient can show financial hardship. Financial Hardship should be defined by the practice in
- a written policy and must be applied equally to all patients.
- The practice fails to collect copay or deductible amounts after making reasonable collection
- A health plan type of waiver not applicable to individual or group providers.
So, under Medicare, if you occasionally waive copayments to those who can demonstrate financial hardship,
you will be within the law. But you cannot routinely waive copayments or advertise that you waive copayments.
So when a Medicare patient asks you to waive your copayments, you should inform them that this practice is
Should you waive copayments for Private Payer patients?
When Private Payer Insurance Companies set a copayment or deductible amount as part of their Insured’s
policy, they are counting on the copayment or deductible to cause a pattern of behavior. Simply stated, high
copays are designed to make sure the patient goes to the doctor when they have a real problem, not every time
they have an ache or pain. Similarly, high deductibles are designed to make sure the patient gets treated and
released from care instead of using their health insurance for maintenance treatments. If you agree to waive
copayments or deductibles, you are removing the incentives set by the insurance company and may be
increasing the amount of care to the patient and the cost to the insurance company. This might be considered
fraud based on your contract with the insurance company.
Most private payers do not allow you to waive copayments or deductibles. It is always best to check your
contract to see if you are allowed to waive these fees and under what circumstances you are allowed to waive
these fees. If you want to reduce the fees paid by the patient, the best way to do this would be to reduce your fee
so both the patient and the insurance company pay less. This will not reduce any copayments that must be
collected at full value. If the patient is truly having financial hardship, you may decide to treat the patient pro-
bono. Again, you should check your contract with the private payer to make sure this is allowed and you should
have written practice policy that is uniformly administered to all patients.
Conclusion – Do NOT waive copayments
When a patient asks you to waive their copayments or deductibles, it is best to inform them that this practice is
illegal and not endorsed by you nor your practice. If they threaten to go to another therapist who will waive
their copay or deductible, you are better off letting them go to another therapist. On top of the legal issues, you
are also working for free or greatly reduced fees when you waive copays and deductibles. Wouldn’t you rather
have a patient paying his fair share rather than a patient receiving free services? You owe it to yourself and your
practice to be fiscally responsible and protect it from possible fraud charges by refusing to waive copayments
unless it is justified by financial hardship.