Copay Collection Policy

CareCentrix Modifies Co-Pay Collections Policy. As we reported earlier this month, AAHomecare has engaged CareCentrix on a new copay collections policy for PAP and PAP supply patients with balances of more than 180 days.The Association encouraged CareCentrix to reconsider the new policy, which went into effect on Jan. Consistent with these commitments Cone Health maintains a billing and collection policy that complies with applicable state and federal laws and regulations. This policy describes the financial assistance and discount programs as well as the billing, payment and collection processes applicable to services provided to patients.

Shift your mindset. M oving patient collections “up front” is a philosophical change for most. Conflicting Payor Requirements or Collection Practices. CMS has received questions from providers that suggest third-party health services payors may be proposing or establishing payment-related policies and procedures that could, if adhered to by Medicare-participating hospitals and CAHs, place those facilities and their.

AMARILLO, TX – The DME industry is caught in the “perfect storm” of competitive bidding, reimbursement cuts, increasingly stringent documentation requirements, and aggressive audits. Balanced against this is the tsunami of 78 million Baby Boomers who are retiring at the rate of 10,000 per day. In other words, the demand for what the industry has to offer is increasing exponentially.

These factors place the DME supplier in the unenviable position of having to meet demand while dealing with multiple facets of regulatory oversight. In order to survive, the supplier needs to distinguish itself from its competition. In doing this, it is important that the supplier not step onto any of the “slippery slopes” that can result in an enforcement action by a governmental agency.

One of these “slippery slopes” pertains to waiving copayments. A DME supplier may be inclined to suggest to potential patients that if they purchase from the supplier, then the supplier will waive the patients’ copayments. While it is acceptable for a DME supplier to waive a copayment when a patient establishes an inability to pay, the supplier can be subjected to liability if it routinely waives copayments.

Copay Collection Policy And Procedure

There are two important federal statutes prohibiting routine waivers of copayments for beneficiaries of federal and state health plans. The law that most specifically addresses waiver of copayments is 42 U.S.C. 1320a-7a, sometimes called the beneficiary inducement statute. That statute prohibits the offer or payment of “remuneration” to a beneficiary by any person/entity if the person/entity knows (or should know) that the remuneration is likely to influence the beneficiary to obtain items or services from a particular supplier. The definition of “remuneration” specifically includes waivers or reductions of copayment amounts, except when (1) the waiver is not advertised, (2) the supplier does not routinely waive copayments, and either (a) the supplier in good faith determines that the beneficiary is in financial need, or (b) the supplier fails to collect the copayment after making reasonable collection efforts.

The other relevant federal statute is the federal anti-kickback statute, 42 U.S.C. 1320a-7b(b). The anti-kickback statute prohibits, among other things, the offer or payment of remuneration to induce a person to purchase a Medicare or Medicaid-covered item or service. Unlike the inducement statute, the anti-kickback statute does not include a definition of “remuneration.” However, it is generally accepted that the term includes transferring “anything of value.”

The Office of Inspector General (“OIG”) has long taken the position that routine waivers of copayments violate the anti-kickback statute. In 1991, the OIG issued a Special Fraud Alert on the topic. Although the anti-kickback statute and the related regulations do not contain an explicit exception for financial hardship as the inducement statute does, the OIG stated: “One important exception to the prohibition against waiving copayments and deductibles is that providers, practitioners or suppliers may forgive the copayment in consideration of a particular patient’s financial hardship. This hardship exception, however, must not be used routinely; it should be used occasionally to address the special financial needs of a particular patient. Except in such special cases, a good faith effort to collect deductibles and copayments must be made.”

Violation of either the beneficiary inducement statute or the anti-kickback statute can lead to substantial monetary penalties as well as possible exclusion from the Medicare and Medicaid programs. It is important, therefore, for a DME supplier to adopt and enforce a policy of waiving copayments only in individual cases where the supplier determines that the patient is financially needy. In all other cases, the supplier should pursue normal collection efforts. In addition, the supplier should avoid advertising that could be taken to imply that the supplier will routinely waive copayments.

The following sets out provisions that can be included in a formal Policy for Collections and Patient Assistance. The following provisions are only illustrations. The supplier should consult with its health care attorney to prepare a Policy suitable to the supplier’s specific needs.

Policy Statement

ABC Medical Equipment, Inc. (“ABC”) is committed to complying with federal and state laws concerning accurate billing. At the same time, ABC is committed to providing access to high quality health care to all patients. ABC has encountered situations in which patients are unable to pay cost-sharing obligations because of financial hardships. In some situations, patients fail to pay cost-sharing obligations despite ABC’s good faith collection efforts. To address these situations, ABC will implement this Policy and Procedure for Patient Assistance.


Except under certain circumstances, waivers of deductibles and copayments are not permitted because such waivers misrepresent ABC’s actual charge and may result in false claims. Also, the Office of Inspector General has indicated that such waivers may violate the Federal Anti-Kickback Statute. Accordingly, this policy sets forth procedures that ABC and all ABC employees will follow before any cost-sharing obligation is waived. Under this policy, ABC may waive a patient’s cost-sharing obligation only after the patient demonstrates a financial hardship. Otherwise, ABC will employ good faith efforts to collect copayments and deductibles.


Application – The form entitled, “Economic Assistance Request,” that a patient must complete to request a financial hardship waiver. The application is attached as Attachment A.

Cost-Sharing Obligations – Payment obligations, including copayments, deductibles, and coinsurance, required under a patient’s arrangement with the patient’s third-party payor.

Family – All persons residing in a patient’s home who are related to the patient by birth, marriage, or adoption.

Federal Poverty Guidelines (FPGs) – Often referred to as the “federal poverty level,” FPGs are measures of poverty issued yearly by the Department of Health and Human Services in the Federal Register. The current FPGs are listed in Attachment B.

Financial Hardship Waiver – Waiver of a cost-sharing obligation provided to a patient because the patient demonstrated a financial need.

Gross Family Income – Gross family income refers to the total yearly value of the family’s income from all sources prior to any tax deduction.

Manager – Under this policy, the Manager is responsible for reviewing applications and determining whether to grant a financial hardship waiver. _________________ will serve as the Manager under this policy. S/he may delegate his/her responsibilities under this Policy to any employee of ABC.

ABC – In this policy, references to ABC include all employees and representatives authorized to act on behalf of ABC.


Private Insurance Companies – ABC will comply with all contracts in place with insurance companies. In the event a contract conflicts with this Policy, the contract will take precedence over this policy. When ABC waives the cost-sharing obligation related to the patient’s private insurance, ABC will notify the affected insurer.

Statements Regarding Waivers – ABC will not advertise or otherwise promote the waiver of deductibles or copayments. No ABC employee may tell the patient or the patient’s representative that the patient does not need to pay the cost-sharing obligation unless the patient has submitted an application and the Manager has authorized a waiver. At the time ABC provides services to a patient, ABC representatives will provide to the patient an estimate of the patient’s cost-sharing obligation. Only when the patient volunteers that he/she cannot pay the cost-sharing obligation may the ABC representatives may inform the patient of the availability of a financial hardship waiver and the application process. ABC will document any waiver provided to a patient on the patient’s invoice or receipt for service.

Royalty free music download. Financial Hardship Waivers

Application Required – When a patient requests a financial hardship waiver, ABC will require the patient to complete and submit an application entitled, “Economic Assistance Request.” If the patient requests an application for patient assistance, ABC representatives may email, fax, mail, or hand deliver the application to the patient. Alternatively, at the patient’s request, ABC representatives may receive the information verbally and complete the application on behalf of the patient. Any application completed in this manner will be mailed to the patient for the patient to sign and return. The patient will also be required to supplement an application completed verbally with evidence of financial hardship.

Up to Date Information – Upon receipt of the application, ABC will inform the patient of the patient’s responsibility to notify ABC of any changes to the patient’s situation. ABC may rely on the documentation submitted by the patient for 12 months, unless the patient notifies ABC of any changes to his or her situation. At the expiration of the 12 month period, ABC will request that the patient completes a new application.

Documentation Supplementing the Application – ABC need not request documentation to support the patient’s statements on the application in every case. ABC will require supplemental documentation for applications completed verbally. Also, in the event the Manager has any doubts regarding the accuracy and validity of an application, ABC will require the patient to submit documentation evidencing a financial hardship. In such events, ABC will request a copy of the patient’s tax return and/or other evidence of the patient’s financial need, which may include evidence of (i) homelessness; (ii) enrollment in Women, Infants, and Children (WIC) programs; (iii) receipt of food stamps; (iv) participation in a subsidized school lunch program; (v) participation in an unfunded state or local assistance program; (vi) residence in low income, subsidized housing; and/or (vii) other evidence of financial need, such as pay stubs or medical bills.

Eligibility Criteria for Financial Hardship Waivers – The Manager will review the submitted documentation and determine whether the patient meets the criteria for a financial hardship waiver. The basis for any determination will be documented and kept in ABC’s records. The eligibility criteria for financial hardship waivers are as follows:

  • Full Waiver – The patient is eligible for full waiver of the patient’s cost-sharing obligation if the patient’s gross family income is less than or equal to the applicable FPG. Under such circumstances, the patient may receive a full waiver. However, the Manager is not required to grant a full waiver; the Manager may determine that a partial waiver is appropriate.
  • Partial Waiver – If the patient’s gross family income is greater than the applicable FPG, but less than or equal to two times the applicable FPG, ABC may reduce the patient’s cost-sharing obligations. The amount waived will depend upon the particular patient’s circumstances. If the patient’s gross family income is greater than two times the applicable FPG, ABC will presume that the patient is not eligible for patient assistance unless (i) the patient’s family has unreimbursed medical expenses that exceed 20% of its gross family income or (ii) the patient demonstrates the existence of other extraordinary circumstances that justify a financial hardship waiver. Under such circumstances, the Manager may grant a partial waiver of the patient’s cost-sharing obligation. The Manager has the authority to grant a full waiver in the event the Manager determines that such a waiver is justified by the patient’s financial situation. The basis for any determination shall be thoroughly documented in ABC’s records.

Provision of Financial Hardship Waivers – If the patient meets the eligibility criteria, ABC may provide a financial hardship waiver unless the Manager determines that a financial hardship waiver is unnecessary or inappropriate in a particular case. For example, the Manager may decide that a financial hardship waiver is inappropriate because the patient falsified documentation or because the evidence of financial need is unreliable. ABC will promptly notify the patient of the Manager’s determination regarding the patient’s application.

Documentation – ABC will maintain copies of all applications and supplemental documentation submitted by patients. ABC will document and maintain records concerning (i) the amount of a waiver provided to a patient and (ii) the basis for ABC’s decision.

Yearly Review of Financial Hardship Waivers Granted – Each calendar year, the Manager will evaluate the number of patients receiving financial hardship waivers from ABC. If the number of such patients is approximately 10% or more of the patient population served by ABC in that year, then the Manager will take steps to ensure that ABC is not unnecessarily waiving cost-sharing obligations. For example, the Manager may retrain staff on this policy and require supplemental documentation for all applications before ABC grants a financial hardship waiver.

Waivers Following Good Faith Collection Efforts

ABC may write off the cost-sharing obligation of a patient who does not qualify for a financial hardship waiver only if (i) the patient’s cost-sharing obligation remains unpaid after 120 days and (ii) ABC exercised and documented the following collection efforts:

  • Initial Invoice – After ABC provides services to a patient, ABC will issue to the patient an invoice detailing the amount of the patient’s cost-sharing obligation.
  • Second Invoice – If the patient fails to pay the cost-sharing obligation within 30 days, ABC will send to the patient a subsequent statement detailing the patient’s outstanding balance.
  • Telephone Contact and Third Invoice – If the cost-sharing obligation remains unpaid after 60 days, ABC will send a third billing statement. Within 10 days following the date of the letter, ABC will contact the patient by phone. Phone calls will be made until affirmative contact is established with the patient or the patient’s representative. During the phone call, an ABC representative will (i) collect information concerning the reason for non-payment, (ii) solicit an agreement for a specific payment plan, and/or (iii) offer to provide an application for patient assistance. If the patient submits an application, ABC will promptly notify the patient of the Manager’s determination. If the application is denied, or the patient does not submit an application, ABC will continue efforts to collect the patient’s cost-sharing obligation.
  • Fourth Invoice – If the patient’s obligation remains unpaid after 90 days, ABC will send a fourth billing statement.

All invoices, telephone and in-person contacts regarding the patient’s cost-sharing obligation will be documented in the patient’s billing file. If a patient’s cost-sharing obligation remains unpaid after 120 days, the Manager will review the documentation regarding ABC’s collection efforts. The Manager may then direct an ABC representative to continue collection efforts, turn the account over to a collection agency, bring a collection lawsuit, refuse to provide products and services to the client in the future, or write off the obligation. The Manager may write off the obligation as long as the good faith collection efforts listed above are clearly documented in the patient’s file.


The billing and waiver procedures of ABC will be audited from time to time. Findings from such audits shall be submitted in writing to ABC’s officers and directors. ABC’s officers and directors may also engage an outside party to conduct an audit of ABC.

Economic Assistance Request

On the Economic Assistance Request Form, the patient will be asked a number of questions, such as:

  • Are you married?
  • How many dependents do you have?
  • What is your current household size? (Include spouse, children, and legal dependents living in your home)
  • Are you receiving any type of assistance from local, county, state, or federal government agencies? If so, describe the assistance.
  • Is a guardian or anyone else legally responsible for your medical bills? If the answer is “yes,” provide the person’s name and contact information.
  • Do you own your house? If yes, is it paid for?
  • Do you or anyone in your household have any unpaid medical and/or other bills?
  • How much do you have in savings to which you have immediate access (not including qualified retirement)?
  • What is your monthly net income from the following: employment, Social Security, child support, retirement, investments, spouse, disability?
  • What are your monthly expenses for the following: rent/house payment, prescriptions/medical, insurance, food, car payment, other?
Copay Collection Policy

Jeff Baird will be presenting the following webinars:

HME News Webinar

2018 Look Ahead for DME Suppliers

Copay Collection Policy And Procedure

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C. and Andrea Stark, MiraVista, LLC

Moderated by: Liz Beaulieu, HME News

Thursday, March 8, 2018

1:00 p.m. – 2:30 p.m. Eastern Time

2018 is the eighth year in a row Andrea Stark, Jeff Baird, and moderator Liz Beaulieu have teamed up for the annual outlook event to blueprint the legal and DME reimbursement challenges facing DME suppliers. And while most sequels seem to lose steam, Look Ahead continues to deliver a well-rounded, usable strategy that connects with attendees. A few of the hot topics for this year include:

  • Dramatic changes for high-liter-flow oxygen patients
  • Best practices to capitalize on Medicare’s Targeted Probe and Educate program
  • Continued audit scrutiny for non-invasive ventilators
  • Preparing for changing patient Medicare IDs to avoid cash flow disruptions
  • State Medicaid cuts and sole source contracting
  • Outsourcing overseas
  • The latest from Capitol Hill on DME reimbursement reprieve

Register for 2018 Look Ahead for DME Suppliers.

Fee: $149


Collaborative Arrangements With Physicians

Presented by: Jeffrey S. Baird, Esq., Brown & Fortunato, P.C.

Tuesday, March 13, 2018

2:30-3:30 p.m. EASTERN TIME

There are a number of terms that have recently entered the DME industry’s vocabulary: “data analytics,” “quality outcomes,” “performance measurements,” and “collaborative care.” Collectively, these stand for the proposition that third party payors no longer intend to pay for health care services that are provided in “silos.” Said another way, payors expect health care providers (physicians, hospitals, SNFs, pharmacies, DME suppliers and home health agencies) to work together to keep patients healthy…and keep them from being readmitted to the hospital time and time again. Payors expect providers to know what other providers are doing in treating a particular patient. This program will examine the ways that DME suppliers can legally collaborate with physicians. Particular areas of focus are (i) preferred provider agreements; (ii) employee liaison arrangements; (iii) consignment (“loan closet”) arrangements; (iv) medical director agreements; (v) sponsoring education programs; and (vi) agreement with the physician to collect and share patient data so as to measure outcomes.

Register for Collaborative Arrangements With Physicians on Tuesday, March 13, 2018, 2:30-3:30 pm ET, with Jeffrey S. Baird, Esq., of Brown & Fortunato, PC.


Member: $99.00

Non-Member: $129.00

Copay Collection Policy

Jeffrey S. Baird, JD, is Chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Amarillo, Tex. He represents pharmacies, infusion companies, HME companies and other health care providers throughout the United States. Mr. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization, and can be reached at (806) 345-6320 or [email protected].