Public Health Law Map - Beta 5 - Medical and Public Health Law Site

things that the physician must beware of in doing this. The discount must apply
to the total bill, not just the part that is paid by the patient. If the patient owes a
20% copay on a $25 charge ($5) and you are giving a discount of $5, then the
patient pays $4 and the insurance company pays $16. If the patient owes a $5
copay regardless of the amount of the charge, then the patient must pay $5 and
the insurance company pays $15. In this situation, the discount would only
benefit the insurance company.
Discounts raise the issue of the physician’s customary charges for a procedure.
Many private insurance plans and some federal programs have a “most favored
nation” clause in the contract with the physician. This entitles the plan to pay the
lowest charge the physician bills to anyone. Any systematic pattern of discounts
could trigger a reduction in the physician’s allowable reimbursement schedule to
the discounted price.
(3) “No Charge”
As far as the authors have determined, none of the private insurers bans waiving
the entire charge for the care. You may also charge for some visits and not for
others. Many pediatricians do not charge for the first follow-up visit for otitis
media. This increases the likelihood that the child will be brought back for the
recheck. The insurance company is also getting a free visit, but at least the patient
is getting the care.
“No charge” visits are prohibited if they are part of a fraudulent scheme. For
example, a no charge visit is still a patient care encounter and must be fully
documented. Assume that a patient has severe asthma and is waiting out a one
year preexisting illness exclusion in a health insurance policy. If that patient
requires treatment a month before the end of the year waiting period, you have to
fully document the treatment even if you do not charge the insurance company
for it. You cannot use “no charge” to hide medical information.
You may also deliver nonreimbursable care as part of an otherwise justified office
visit and bill the company for the authorized part of the visit. For example, if the
insurance doesn’t cover immunizations, then you could do the immunizations at
the time you do an authorized well-child checkup, or when the child is in for
some other medical condition that is not a contraindication for immunizations.
You cannot, however, bill for an office visit when the only reason the patient is
being seen is to deliver care that is not authorized under the policy. It would also
be improper to “no charge” as a way to waive a copay in order to generate
ancillary business for the physician’s office lab or other health services business.
In other words, you cannot no charge for the visit and bill the insurance company
for $100 worth of lab work that it would not have approved as part of a
reimbursed visit.
(4) “Kickbacks” and Inducements To Refer Patients
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