One of the most common medical billing questions we get from out of network providers (non-contracted) especially for referral-based facilities like imaging center billing, laboratory billing, and ASC billing is whether they can waive patient balances.  Following is some information that may help your practice.

Financial hardship

Waiving a patient balance due to financial hardship is typically allowed for commercial insurance and even for government payers like Medicare.  There are specific rules governing this for Medicare and must be on a case by case basis.  It is not recommended to provide a financial hardship form to every Medicare patient, because this could be seen as an inducement.

Although it is generally accepted that financial hardship is a reason to legitimately waive copays, coinsurance and deductibles on a case-by-case basis, it may even be illegal to waive these for commercial insurance even if based on the financial hardship of the individual patient.  For example, in a slightly ambiguous opinion from the General Counsel of the New York State Insurance Department states “A chiropractic group that, as a general practice, waives insured patients’ co-payment amounts, even if based on the patients’ financial hardship, may be in violation of N.Y. Penal Law § 176.05.”

Can You Routinely Proactively Waive Coinsurance/Copay/Deductible?


It is well known that one cannot routinely or proactively waive the patient copay or deductible for any government payers like Medicare and Medicaid and would risk a provider being subjected to criminal charges.

Commercial contracted

If the provider has a contract with the insurer which requires collection of the patient balances, they cannot be waived.  This would be at least breach of contract and possibly more depending upon the state.  The first question is whether the contract between the specific provider and insurer requires this.  We have reviewed and had our attorneys review provider contracts with major insurers and interestingly we were not always able to find a provision in the contract that requires collection of the patient balances.  Even if this were permissible by the contract, a thorough review of state laws must be conducted to ensure there is no violation of a state statute.  Additionally, as noted in a previous article, the routine waiver of copays/coinsurance/deductible for in network providers is not only not widely practiced, but is almost non-existent and has questionable benefit for a practice either in marketing or in financial terms, so there seems little reason to consider this.

Out of Network HMO

Some state laws govern balance billing for HMO’s out of network, but these are typically designed to protect the patient and not require the provider to bill the patient the full balance.

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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.