HHS Office of Inspector General Issues Statement

Physicians Can Waive Medicare Coinsurance Relative to 2.2 Percent Pay Increase

June 30, 2010 03:15 pm News Staff

The federal government has waived a Medicare regulation that would require physicians and other Medicare providers to bill patients for additional coinsurance, also known as cost-sharing amounts, relative to the recently passed 2.2 percent Medicare physician payment increase.

The payment increase went into effect on June 25 but is retroactive for covered Medicare services with dates of services from June 1 through June 24.

Medicare policy dictates that physicians must collect full coinsurance from Medicare beneficiaries as part of HHS' efforts to combat fraud and abuse in the Medicare system. However, on June 25, HHS' Office of Inspector General, or OIG, issued a policy statement(www.oig.hhs.gov) assuring physicians and other Medicare providers that they "will not be subject to OIG administrative sanctions if they waive retroactive beneficiary liability" subject to the conditions noted in the policy statement.

According to the statement, newly adopted federal regulations -- such as the 2.2 percent payment update signed by President Obama on June 25 -- occasionally result in payment rate increases that apply retroactively and make Medicare beneficiaries liable for the difference between the coinsurance they owed under the prior lower payment rate and the coinsurance owed under the new increased payment rate.

Medicare beneficiaries pay 20 percent of the total Medicare-allowed fee.

According to the OIG statement, physicians must, among other things, ensure that they

  • calculate and collect Medicare patient coinsurance for items and services furnished on June 25 and after based on the new increased payment rates;
  • offer the waiver to all of their affected Medicare patients without regard to the type of items and services furnished or to a patient's diagnosis; and
  • refrain from offering the waivers as part of any advertisement or solicitation.

Furthermore, according to the statement, physicians are not required to waive the retroactive beneficiary liability, and the statement does not prohibit physicians from waiving any coinsurance amounts based on a "good-faith, individualized determination of a beneficiary's financial need."

General guidance about the federal anti-kickback statute is available on the OIG website(oig.hhs.gov). The site also maintains an extensive archive of "safe harbor" regulations.

Questions regarding the new policy statement can be directed to James Cannatti III, senior counsel in the Office of Counsel to the Inspector General, by calling (202) 619-0335.