Waiving Co-payments and Deductibles for Indigent Patients


Here’s how to help your patients without violating fraud and abuse laws.

Fam Pract Manag. 2001 Feb;8(2):13.

One purpose of the Medicare fraud and abuse regulations is to prevent physicians from inducing Medicare beneficiaries to receive unnecessary services by waiving co-payments and deductibles.

The Department of Health and Human Services Office of Inspector General (OIG) enforces the regulations, both to prevent overutilization and to prevent Medicare from being overcharged. If Medicare is only supposed to pay a percentage of the price (say 80 percent) and the patient pays none, the payer really ends up paying 100 percent, and is overcharged, or so the theory goes.

Despite these concerns, the anti-kickback statute does allow physicians to waive co-payments and deductibles for indigent Medicare patients, provided the following conditions are met:

  • The waiver must be based on a good faith determination of the patient’s financial need. In other words, waivers must not be applied routinely. The government doesn’t specify the financial status that would justify a waiver, so you should develop your own approach, apply it consistently and document your efforts. For example, if your efforts to collect on a patient’s bill fail or if it’s obvious that a patient is struggling to pay the amount owed, you could have the beneficiary fill out a form that asks about employment status and average household income and expenses and then make your determination based on the information provided.

  • The waiver must not be based on the amount of the charges. Your decision about whether to waive what a patient owes should be based on the patient’s ability to pay without regard to what Medicare may have paid or the total charges for the service.

  • The waiver must not be offered as part of an advertisement or solicitation.

One final note: These guidelines apply specifically to Medicare. Medicaid regulations may be similar in some respects, but they vary from state to state.

John O’Trompke is a law graduate and freelance health care writer in Chicago.


Copyright © 2001 by the American Academy of Family Physicians.
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