In this next chapter on medical billing rules and regulations regarding patient balance billing, we will look at what governs balance billing government payers, e.g. Medicare and Medicaid patients.


Do you have to balance bill patients with government payers?

It goes without saying that all government patients must be billed any and all balances when performing medical billing.  It is considered an inducement and illegal to waive the patient portion for Medicare patients.  Although Medicare patients typically do not have coinsurance on testing services like laboratory or radiology, they do however have deductibles typically, so you should bill this in all cases to be compliant.


The two key legal frameworks that govern this are:

  • Medicare Civil Monetary Penalty Statute
    • 42 USC § 1320a-7a(a)(5); 42 USC §  1320a-7a(i)(6)
    • Any person who offers or transfers remuneration to any Medicare or Medicaid beneficiary “likely to influence such individual to order or receive . . .”
    • “Remuneration” = includes waiver of coinsurance and deductible amounts and transfers of items or services for free or other than fair market value.
  • HIPAA Section 231(h)
  • Sections 1128B(b) (the anti-kickback statute) or 1128A(7) (relating to payment of kickbacks) of the Social Security Act [42 U.S.C. §§ 1320a-7b(b) and 1320a-7(b)(7)]
  • OIG policies, including Opinion 97-4


Can you balance bill for more than the Medicare allowable rate?

This is so well established that it hardly needs referencing that you cannot do this.


Can I sometimes waive copays or other patient receivables for Medicare patients?

A safe harbor protection is afforded if:

  • The waiver of copayment is not offered as a part of an advertisement or solicitation (enducement)
  • Provider doesn’t routinely waive the copayment
  • A waiver is made following a good faith determination of the financial need of the patient
  • Waiver determination is made without regard to diagnosis or length of stay
  • No bad debt for the unpaid receivable is claimed


If I don’t collect from every Medicare patient, will I be liable?

Some clients have asked whether if they are unsuccessful in collecting the balances from Medicare patients whether they could be held liable.  The short answer is no, as long as you make a “good faith effort” to collect.  OIG 97-4 stated that failure to collect from a group of Medicare patients would likely result in a violation.  There is some debate on what constitutes a “good faith effort”, so this is an area in which you should consult your attorney, but some have suggested that sending at least one patient statement to patients may be sufficient.


Disclaimer: Apache Health does not practice law or give legal advice.  The information contained herein is for informational purposes only.  Please consult with your healthcare attorney in order to ensure compliance with the law.


About Apache Health

Apache Health is a revenue cycle management (RCM) analytics, benchmarking, and auditing company. The founders of Apache formerly ran a large RCM company that was acquired by a private equity group in a rollup. Apache’s predictive analytics will benchmark billing performance and project exactly how much more revenue you should earn from your existing volume of patients.  Using many factors and a blend of artificial intelligence and specialty specific benchmarks, the model projects whether changing the billing process would improve collections for your particular mix of procedures and payers. Apache Health can help you evaluate whether to outsource the billing, determine which billing company to select to maximize performance, or track inhouse billing performance improvement over time.

Sean McSweeney

Apache Health



Legal disclaimer:

Apache Health is engaged in the business of healthcare revenue cycle management analytics.  We offer information about regulations, rules, and industry practices relating to compliance.  Apache has researched that subject and has set forth the results of that research herein.  Apache Health is not a law firm and we do not offer legal advice.  Apache does not guarantee the completeness nor the accuracy of its research.  You should consult with your qualified healthcare attorney.