Physicians May Legally Waive Coinsurance Relative To 2.2% Medicare Pay Increase

The recently enacted law that temporarily replaces a 21.3% cut in Medicare reimbursement rates with a 2.2% increase also retroactively increases what patients owe in coinsurance.  However, according to the Office of Inspector General (OIG), physicians can legally waive the additional amount owed under the increased rate.  The 2.2% raise came into effect on June 25th but retroactively covers any Medicare services rendered on or after June 1st.

According to Medicare policies, it is mandatory for physicians to collect the entire 20% coinsurance amount from Medicare patients.  Physicians who fail to collect the full amount owed risk violating federal fraud and abuse laws.  The OIG’s waiver of this requirement with respect to the 2.2% increase provides relief for physicians who do not have the time or resources to go through the trouble of collecting the extra coinsurance amount due under the new rate.  In many instances, the administrative cost associated with billing the patient exceeds the cost of the additional coinsurance amount.

According to the policy statement issued by the OIG, providers “will not be subject to OIG administrative sanctions if they waive retroactive beneficiary liability.”  However, the statement also contains several conditions applicable to the waiver:

  • Physicians waiving the additional coinsurance amount should offer the waiver to all of their affected Medicare patients;
  • Physicians should not offer the waiver as part of any advertisement or solicitation; and
  • Physicians should calculate and collect coinsurance based on the new payment rates going forward.

The OIG policy statement does not apply to waivers of beneficiary cost-sharing amounts that were calculated using the prior lower payment rates, nor does it apply if the waivers are conditioned in any manner on the provision of items, supplies or services.

Questions regarding the new policy statement can be directed to James Cannatti III, Senior Counsel in the Office of Counsel to the Inspector General, at (202) 619-0335.