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Writing off copays

  1. Question Writing off copays
    Clearnace Sale
    I have a question. Is it illegal to write off a patient's copay? If it is or is not, can someone show me where there is documentation of this. thank you. There is a big debate going on in my billing department that i currently work for and i want documentation to back up....

  2. #2
    I don't necessarily know about it being illegal. I do know that when you sign a contract with whatever payor, you agree to collect copays up front. I guess if you're adjusting them off perhaps one could argue that you are in breach of that contract, but I'm not sure about that. Why would you want to write them off though?

  3. #3

    I've heard over the years that it is considered illegal to routinely waive copay's and deductibles. I've heard mention of the False Claims Act and the Federal Anti-Kickback statutes that have been inacted by the OIG. I've seen most concern about this surrounding Medicare patients.

    I would look on the OIG website for documentation that you can print out and show your billing staff/office. I've also seen some really good articles about this on the AAFP website.

    I hope this info helps you & Good Luck!
    Sylvia Thompson, CPC
    Billing Supervisor
    San Diego, CA

  4. Default
    well from what they tell me the situation is a patient comes in, has a $25 copay pays only 20 which leaves 5.00 still to patient resp and they state that 5.00 is not enough to collect on so the collectors are told to write them off. the offices are not made to check anything or to collect the right amount. they pretty much do whatever they want because of the excuse "we are too busy to figure it out" i will check on oig website and the other websites to see. thank you all for your help

  5. #5
    You're welcome....Also, I attended a seminar in which we were told that in cases like yours, the best way to adjust off these small balances was with a note stating "too costly to pursue". In some cases, the work and effort outweigh the revenue generated by collecting on small balances. If you created a specific adjustment code for this, you may be able to run a report at the end of each month to show your physicians how much money they are losing by not verifying the correct copayment amounts due - I'm sure it adds up.
    Sylvia Thompson, CPC
    Billing Supervisor
    San Diego, CA

  6. Default
    My understanding is that if you don't pursue collecting the entire copay or write it off as a prof. discount, you are actually hurting yourself when Medicare does it's pricing survey. Becuase if you write those off you are actually saying my services really only cost $20 less. Thus your industry will get hurt over all. And yes you are breaking your contract with the carrier.

    As far as the $5 diff in copay $ what was paid vs. what is due I was told it was ok to write those off as small balance write offs.

    Now that said, my Dr's write off copay's/coins/deductibles all the time! No compliance.

  7. #7
    Default Medicare copays
    According to medicare, it is up to the provider of services to determine whether or not to collect the copay. I have asked for written guidelines from medicare and apparently they do not exist.

  8. #8
    Default Writing off of copays
    For Medicare B patients, and this goes to coinsurance and deductible amounts, Medicare REQUIRES a "reasonable collection effort" which is industry-defined as 3 billing cycles. Anti-kickback statutes and even the False Claims Act can be invoked to prosecute physicians that routinely do not make this effort. The mindset being that the claim is for an inflated amount if the provider does not collect coinsurance amounts hence, the bill should have been sent to Medicare for the "reduced rate".

    For other payers, in our area the prevalent two being MVP and CDPHP, the specific language regarding collection of copays and/or deductibles is in the fine print of the provider enrollment contract. Again, you MUST collect the copays! Failure to do so can result in the loss of your payer contracts.

    The ONLY times is it acceptable to "waive" copayment or deductible amounts are after reasonable collection efforts fail or in the case of DOCUMENTED indigence of the patient. Practices will often have an indigence waiver for this purpose.

    Hope this helps.
    Belinda S. Frisch, CPC, CEMC
    Author of "Correct Coding for Medicare, Compliance, and Reimbursement"

  9. #9
    Default !
    Quote Originally Posted by lnaschke View Post
    According to medicare, it is up to the provider of services to determine whether or not to collect the copay. I have asked for written guidelines from medicare and apparently they do not exist.
    This is definitely not true. Medicare REQUIRES collection of coinsurance and deductible amounts. See CMS provider manuals for details.
    Belinda S. Frisch, CPC, CEMC
    Author of "Correct Coding for Medicare, Compliance, and Reimbursement"

  10. #10
    St. Louis, Missouri
    I also understood it to be a 3 billing cycle rule. If you have sent out at least 3 bills to the patient in attempt to collect with no response, then it is ok to write off the balance.

    Melissa Blow, CPC

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