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The OIG's Compliance Program Guidance for Individual and Small Group Physician Practices
On September 25, 2000 the OIG released its final Compliance Program
Guidance for Individual and Small Group Physician Practices (Guidance).
In the Guidance, the OIG explained an approach to professional courtesy
that had not been readily evident in its prior statements. The OIG
stated that there are two factors it generally considers when analyzing
professional courtesy: (1) how the recipients of the professional
courtesy are selected; and (2) how the professional courtesy is
extended. Addressing the waiver of the entire fee for services, the OIG
stated that: "a physician's regular and consistent practice of
extending professional courtesy by waiving the entire fee for services
for a group of persons...may not implicate any of the OIG's fraud and
abuse authorities so long as membership in the group...does not take
into account...the group members' ability to refer to, or otherwise
generate federal health care program business for, the physician"
(Emphasis added).
Addressing
the waiver of co-payments, the OIG refused to apply a similar standard
to the Act or the CMPL, but did apply a similar standard to the
anti-kickback statute, stating that: "a physician's regular and
consistent practice of extending professional courtesy by waiving
otherwise applicable co-payments for services rendered to a group of
persons...would not implicate the anti-kickback statute so long as
membership in the group...does not take into account...any group
member's ability to refer to, or otherwise generate federal health care
program business for, the physician" (Emphasis added).
In any case, the OIG explained that any waiver of co-payments would
implicate the CMPL if the individual for whom the wavier was made was
not financially needy. No clarification was provided on the application
of the Act, except that the OIG propounded that the legality of any
particular arrangement will turn on the totality of the circumstances,
and that physicians should address these matters with their attorneys.
So What Does the Government Mean?
Without a single comprehensive statement from the government, it is
difficult to determine exactly what the government is asserting.
However, it appears that the government is treating waivers of the
entire professional fee differently from waivers of co-payments and/or
deductibles (insurance-only billing). A review of the government's
statements can be summarized into the following governmental positions:
Waivers
of co-payments or deductibles, except where those waivers are based
upon individual findings of financial hardship, or occur after
reasonable collection efforts, are prohibited by the False Claims Act.
Any waivers made with the intent to induce patient referrals or to
encourage the generation of additional federal health care program
business, whether through referrals or through return business, are
prohibited by the Anti-kickback Statute and/or the CMPL. Therefore,
when waiving co-payments and/or deductibles, it is always necessary to
make individual findings of financial hardship, or to waive only after
reasonable collection efforts have failed.
Any waivers of the entire fee made with the intent to induce patient
referrals or to encourage the generation of additional federal health
care program business, whether through referrals or through return
business, are prohibited by the Anti-kickback Statute and/or the CMPL.
While the OIG stated in its commentary to its CMPL regulations that the
routine practice of waiving the entire fee without regard to the
potential for referrals is not a problem, this position appears to be
contradicted by the OIG's statement in the Guidance, where it
specifically states that any waiver of co-payments would implicate the
CMPL if the individuals for whom the waivers were made were not
financially needy.
Finally, for waivers of the entire fee the OIG has stated that the
False Claims Act may not be violated where the Anti-kickback Statute
and the CMPL are not violated. The connection between the Act, the
Statute and the CMPL is not explained, and the reasoning behind the
government's apparent position is not readily evident from review of
the laws. Regardless, it may be concluded that the government's
position is that waivers of entire fees are legal so long as the
waivers are made without the intent to induce patient referrals, or to
encourage the generation of additional federal health care program
business, whether through referrals or through return business. How
these requirements could actually be satisfied is not clear.
Other Legal Considerations
In addition to the analysis above, physicians should also consider
other sources that could limit their ability to provide professional
courtesy. The misstatement of the actual charge theory, which is
centered in federal law around the FCA, could be applied under state
law principles, potentially rendering physicians liable. Furthermore,
many private insurance contracts require the collection of co-payments
and deductibles (i.e. prohibit "insurance only" billing). Failure to
comply could result in a breach of the contract.
What Can be Done?
Due to the zealous approach of lawmakers and government lawyers
attempting to ensure the accurate billing of claims, the continued
legality of the time-honored tradition of professional courtesy has
been called into question. Unfortunately, because several of the
applicable laws include intent-based standards, the legality of any
particular fee waiver turns on the particular facts and circumstances
of each situation. General legal guidance is difficult to provide. This
creates a frustrating situation for physicians, who if required to
analyze and document every waiver of their fees to be sure that they
cannot later be interpreted as designed to encourage referrals of
business or continuing business, but simply as gestures of good will
and respect, may soon decide to cease the practice of professional
courtesy altogether.
Until further guidance is provided by the government, this quandary
will continue to exist. Physicians and other professionals who desire
more information about professional courtesy, or with questions about
particular instances of professional courtesy, should consider
discussing same with their medical societies, or with a health care
attorney who in knowledgeable on these issues.
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