Little Health Law Blog
Our healthcare and business law firm represents healthcare practitioners, including physicians and chiropractors, and their medical and chiropractic practice with compliance matters. A question we are often asked by our clients is, “Can I offer discounts to patients?” There are state and federal considerations before offering discounts, and this post discusses some of those considerations. If you would like to discuss compliance considerations for your medical practice, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@littlehealthlaw.com. You may also learn more about our law firm by visiting www.littlehealthlaw.com.
Consideration 1: Federal Statutes
The first consideration we’ll discuss falls under the Anti-Kickback Statute (“AKS”) and the Federal Beneficiary Inducements Civil Monetary Penalty Statute (“CMP”). The AKS generally makes it a felony to give or offer anything of value, including free or otherwise discounted services or the routine waiver of coinsurance/deductibles, to induce (or in return for) the purchase or order of any good or service that is reimbursable by a Federal or state health care program (such as Medicare, Medicaid, TRICARE, CHIP, etc.). Similarly, the CMP allows for the imposition of fines against anyone who gives or offers anything of value to a Medicare or state health care program beneficiary (e.g., Medicaid, CHIP) that is reasonably likely to influence the beneficiary’s selection of a particular provider for the order or receipt of any item or service for which payment may be made, in whole or in part, by Medicare or a state healthcare program. Notably, violations of the AKS and/or CMP are generally grounds for exclusion from participation in Medicare and other Federal and state health care programs and can be the grounds for professional discipline (including revocation of licensure) and/or exclusion from being eligible to receive payment from various third-party payors.
The U.S. Department of Health and Human Services’ Office of Inspector General (“OIG”), which is responsible for enforcing the AKS and the CMP, is generally concerned that offering discounts or gifts to beneficiaries to influence their choice of health care providers raises concerns regarding steering, unfair competition, improper utilization, quality, cost, and medical-necessity. The worry is that providers may have an economic incentive to offset the additional costs attributable to the discount by providing unnecessary services or by substituting cheaper or lower quality services. Another concern is that discounts may unfairly favor large providers with greater financial resources for such activities. The OIG has stated that there is an “unwritten” exception to the CMP for inexpensive gifts to patients ($15 max fair market value per gift and no more than $75 per patient in the aggregate annually), there is no such safe harbor to the AKS.
Although there are some limited exceptions/safe harbors for discounts offered to patients, the relevant AKS safe harbor is usually inapplicable in these matters. See 42 C.F.R. § 1001.952.
This leads us to a second consideration:
Consideration 2: Offering Discounts Only to Non-Federal Payors.
If AKS includes a safe harbor for a discount applicable to a non-federal payor, can a practice offer discounts only to non-federal payors? Not exactly.
Providers generally are only entitled to charge Medicare beneficiaries their “usual, reasonable, and customary fees” for goods and services provided. Put another way, providers cannot charge Medicare beneficiaries more for the same good or service than is charged to other payors (including self-pay patients) in the routine course of business. Further, many state and private health insurance plans have similar requirements in the form of “most favored nation” agreements or other clauses in their provider participation agreements that entitles the relevant insurer to pay the lowest amount the provider bills anyone, including self-pay patients, for the same good or service. The participation agreement may allow the payor to otherwise punish the provider for deviating from pre-negotiated rates with self-pay patients or other payors).
If a provide chooses to opt-out of Medicare, then some of the considerations may no longer pose a risk to the provider. Keep in mind, however, that chiropractors cannot opt-out of Medicare like physicians, nurse practitioners, and may other providers can. We hope you have found this information useful. If you would like to discuss compliance considerations for your medical practice, you may contact our healthcare and business law firm at (404) 685-1662 (Atlanta) or (706) 722-7886 (Augusta), or by email, info@littlehealthlaw.com. You may also learn more about our law firm by visiting www.littlehealthlaw.com.