Physicians Get Feds' OK to Waive Additional Billing of Medicare Patients

According to a statement from HHS' Office of Inspector General, (3-page PDF; About PDFs) or OIG, CMS will not require physicians to bill their Medicare patients for any additional coinsurance due as the result of passage of recent Medicare legislation. The OIG's decision stands to save family physicians a great deal of hassle, according to one AAFP coding and compliance expert.

The Medicare Improvements for Patients and Providers Act of 2008, H.R. 6331, which passed on July 15, rescinded a 10.6 percent physician pay cut in effect since July 1. Because the pay cut was in effect for two weeks before the legislation was passed, Medicare beneficiaries who paid their bills or who had been billed for physician services during the first two weeks in July now are liable for a larger portion of their Medicare coinsurance.

Ordinarily in such situations -- dubbed retroactive beneficiary liability -- physicians are required to bill or collect additional money from patients to comply with the OIG's fraud and abuse regulations. However, the OIG decided in this particular situation that physicians who waive the retroactive beneficiary liability for the two-week period between July 1 and July 15 would not be subject to OIG administrative sanctions.

This ruling is good news for family physicians, said Cynthia Hughes, C.P.C., an AAFP coding and compliance specialist. "The cost to a practice to generate and send a patient statement or a claim to the secondary insurance for the balance due after the adjusted Medicare payment -- and then to follow up and post any payment received -- is probably more than the amount being billed," said Hughes.

The policy statement does not require physicians to waive their right to collect further payment from Medicare beneficiaries. In addition, physicians maintain the right to waive a patient's cost-sharing amount based on the physician's "good-faith, individualized determination of a beneficiary's financial need," says the OIG statement.