To the Editor:

An answer in the April 2002 Ask FPM department [“Discounts for uninsured patients,” page 60] recommended discounting fees for uninsured patients. It has been my understanding that discounted or waived fees or any “unequal” treatment of classes of patients is considered fraud by insurance companies, especially Medicare. Have I been misinformed on this matter?

Editor’s response:

Medicare and other insurers expect that a practice will not discriminate in what it charges patients. That said, Medicare and other insurers recognize that what is actually collected will vary among patients based on the insurance they have. Thus, a practice may collect a different amount as payment in full for a Medicare patient than it does for a commercially insured patient, based on the terms of the payer’s policy and fee schedule. In this respect, collecting an amount that is less than the actual charge for uninsured patients is no different and would not be seen as fraud. You should ensure that discounts are applied consistently to a given category of patients (e.g., all uninsured patients receive the same discount for paying up front in cash) and that any deviations (e.g., due to financial hardship or bad debt) are handled according to an established policy or procedure. Also, practices should not routinely waive co-payments, co-insurance or deductible amounts. Managed care plans typically require a good-faith effort to collect these amounts as part of the cost-sharing mechanism of the plan, and Medicare considers routine waiver of co-insurance and deductible amounts to be a potential kickback to the patient for receipt of services.