When professional courtesy could get physicians in trouble

More likely than not, a physician or a dentist has at one point provided discounted or free healthcare services to some patients by waiving all or part of a fee or the copayment and/or coinsurance obligations as a “professional courtesy.” According to the Office of Inspector General’s (OIG) Compliance Program For Individual and Small Group Physician Practices guidelines, however, this practice may expose a physician to an investigation.

To be sure, not all professional courtesy discounts or free services are taboo. The OIG’s guidelines provide that, in general, whether a professional courtesy arrangement runs afoul of the fraud and abuse laws is determined by two factors:  (i) how the recipients of the professional courtesy are selected; and (ii) how the professional courtesy is extended.  The OIG specifies that:

If the recipients are selected in a manner that directly or indirectly takes into account their ability to affect past or future referrals, the anti-kickback statute [criminal statute]–which prohibits giving anything of value to generate Federal health care program business-may be implicated. I the professional courtesy is extended through a waiver of copayment obligations (i.e.,“insurance only” billing), other statutes may be implicated, including the prohibition of inducements to beneficiaries. Claims submitted as a result of either practice may also implicate the civil False Claims Act. [citation omitted]

While the OIG’s guidelines were published over a decade ago, recommending that even small physician group practices or individual providers develop a compliance plan to demonstrate a practice’s commitment to adhering to applicable laws and regulations, the importance of the OIG’s guidelines is by no means diminished by the passage of time.  In the current age of increased scrutiny from federal and state investigative and auditing agencies, physicians should be on alert to avoid any appearances of impropriety — even when they are doing a good deed like waiving all or part of their fees. The OIG offered the following observations by which physicians could measure their conduct:

to avoid running afoul of federal (and state) laws and regulations, a physician’s decision to provide free or discounted services, including the waiver of copayments and coinsurance, may not take into account directly or indirectly any group member’s ability to refer to, or otherwise generate Federal health care program business for a physician.

The OIG was clear, however, that a physician offering to waive a copayment to a Federal health care program beneficiary who is not financially needy may run afoul of the Civil Monetary Penalties Law. That law prohibits offering payments to a Medicare or Medicaid beneficiary that a physician knows or should know is likely to influence the beneficiary to obtain services from that particular physician.

In sum, when offering professional courtesy discounts, physicians should make sure that their good deeds also comply with applicable laws.

Deniza Gertsberg is an attorney who represents healthcare providers in compliance-related matters in New York and New Jersey. 

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  • http://www.facebook.com/people/Steven-Reznick/100000549195050 Steven Reznick

    The professional courtesy was just that, a professional courtesy. It was extended to healthcare professionals you practiced with and their families. We usually extended it to medical students and other health care professionals in the community. It was a courtesy not an inducer of referrals. A practitioner recognized someone who had similar interests and had made similar sacrifices and felt honored that they would entrust you with their care.  Once again attorneys in the Federal and State government and in the private sector have managed to scare the hell out of everyone and eliminate a practice that contributed to a local collegial atmosphere.

    • http://pulse.yahoo.com/_2LRZNHDZS6DU45WQ567LPQ7CMI ninguem

      You act like you’re somehow surprised.

      That is, of course, precisely their intention.

  • http://www.facebook.com/people/Terence-Ivfmd-Lee/1523282856 Terence Ivfmd Lee

    Is all charity then illegal by these lawyers’ standards? If I give free care to an indigent homeless person, that person could go praise me to people on the streets, thereby generating referrals. Hmm….

  • rockets roses

    It was my understanding that Professional Courtesy was unacceptable–period.  If a physician gives PC which involves a copay or deductible that is in essence stealing from the insurance company. The physician would have to notify the carrier in advance of his decision to discount the bill so the reimbursement would be appropriate based on same.  I’ve even seen physicians give multiple pharmaceutical samples to patients who then tell their friends “this is the doc to go see”  The idea of “it’s my practice and I’ll do as I want” is a very slippery slope more often than not with an orange jumpsuit at the end.  Juliette