Check Law and Notify Plan When Giving Waiver or Discount to Out-of-Network Patient
Radiology practices that don’t belong to a managed care plan’s provider network sometimes offer to waive or discount plan members’ copayments or deductibles to help the patients keep their costs down. That’s because plans usually require patients to pay a lot more when getting services from outof- network providers, and the waiver or discount of the copayment or deductible can help.
Waiving or discounting charges for out-of-network patients may be a good way to get business and help out
patients. But if you don’t do it properly, you can get into legal trouble, says health care attorney William A.
Sarraille. Waiving a copayment or deductible for an out-of-network patient may violate state law. And if
you don’t disclose the waiver to the plan, the plan can accuse you of submitting a false claim, in violation of
insurance law, Sarraille adds.
To help you avoid these legal pitfalls, we’ve listed seven states that bar waivers (see box at right). You
can use our list as a starting point in finding out whether your state law affects your ability to give waivers
and discounts. And we’ve given you a Model Letter (see p. 5), which you can adapt to tell a plan that you’re
giving out-of-network waivers or discounts to its members.
Find Out Whether Waivers Violate State Law
Check your state law before waiving or discounting copayments and deductibles for out-of-network patients. Some state insurance laws make it illegal to waive copayments or deductibles. The penalties for violating
these laws vary by state, but generally include fines and suspension of your operating license. So if
your practice is located in a state that bars waivers, you shouldn’t waive any copayments or deductibles,
including those for patients who use your facility out of network.
Some states that bar waivers may not specifically bar discounts. In that case, you can give an out-of-network
discount. But make sure your discounts aren’t too steep. “Plans have successfully sued providers and withheld
payments to them, claiming that discounting and other efforts violate insurance benefits contracts and state
laws,” says Illinois health care attorney Scott Becker.
Insider Says: Ask your attorney to check your state’s antikickback laws, too, and help you structure your
arrangement to avoid violating them, advises Sarraille. Many states have antikickback laws that make routinely waiving copayments and deductibles illegal because waivers can be a way
to induce referrals.
Radiology practices that don’t belong to a managed care plan’s provider network sometimes offer to waive or discount plan members’ copayments or deductibles to help the patients keep their costs down. That’s because plans usually require patients to pay a lot more when getting services from outof- network providers, and the waiver or discount of the copayment or deductible can help.
Waiving or discounting charges for out-of-network patients may be a good way to get business and help out
patients. But if you don’t do it properly, you can get into legal trouble, says health care attorney William A.
Sarraille. Waiving a copayment or deductible for an out-of-network patient may violate state law. And if
you don’t disclose the waiver to the plan, the plan can accuse you of submitting a false claim, in violation of
insurance law, Sarraille adds.
To help you avoid these legal pitfalls, we’ve listed seven states that bar waivers (see box at right). You
can use our list as a starting point in finding out whether your state law affects your ability to give waivers
and discounts. And we’ve given you a Model Letter (see p. 5), which you can adapt to tell a plan that you’re
giving out-of-network waivers or discounts to its members.
Find Out Whether Waivers Violate State Law
Check your state law before waiving or discounting copayments and deductibles for out-of-network patients. Some state insurance laws make it illegal to waive copayments or deductibles. The penalties for violating
these laws vary by state, but generally include fines and suspension of your operating license. So if
your practice is located in a state that bars waivers, you shouldn’t waive any copayments or deductibles,
including those for patients who use your facility out of network.
Some states that bar waivers may not specifically bar discounts. In that case, you can give an out-of-network
discount. But make sure your discounts aren’t too steep. “Plans have successfully sued providers and withheld
payments to them, claiming that discounting and other efforts violate insurance benefits contracts and state
laws,” says Illinois health care attorney Scott Becker.
Insider Says: Ask your attorney to check your state’s antikickback laws, too, and help you structure your
arrangement to avoid violating them, advises Sarraille. Many states have antikickback laws that make routinely waiving copayments and deductibles illegal because waivers can be a way
to induce referrals.
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