"Don't worry, I'll take whatever the insurance company sends," says the doctor.
Many kindhearted doctors oblige, thinking to themselves that the patient needs care and shouldn't be turned away just because of lack of funds.For other doctors, discounted pricing is the bait in a marketing gimmick: no out-of-pocket expense, aka NOOPE.
The practice of waiving co-payments and deductibles can lead to a mess of lawsuits, fraud charges and even prison. Under Medicare and Medicaid laws, doctors who write off charges can be charged with filing false claims or violating anti-kickback laws. The recent Kennedy-Kassenbaum bill (Health Care Portability Act) is federal legislation governing write offs that can lead to a $10,000 fine and/or five years in jail. Private insurance also can file civil or criminal fraud charges against doctors who waive copayments. At the very least, such discounts can result in FBI agents showing up in your waiting room with a subpoena for your billing records.
While an occasional case with an extreme financial hardship may be overlooked, this practice by federal law requires such waivers of co-payments and deductibles be made on an individual basis, and must be documented in the patient's records. Regulators are skeptical on the routine use of such cases. A better method in such hardship cases is to charge the low income patient the copayment or deductible, making it clear you expect him to pay, but that you won't pursue the matter in court if he doesn't. Sending the letters is evidence of a good faith effort to collect. The law says trying to collect is the doctor's duty, not to actually collect it.
For the most part, many practitioners who use NOOPE are not doing it for the occasional well-documented hardship case. Instead, they let it be known in advertisements or in private conversations that they do write-offs to generate referrals. NOOPE seems to go hand in hand with other tacky advertising methods taught by unscrupulous advisors: free spinal exams, free chicken dinners, and the inclusive $25 new patient processing (consultation, exams, report and first adjustment). Although these tacky methods are not considered outright insurance fraud, unless the patient's insurance company is billed at the full price, they nonetheless are indicative of tasteless and deplorable ethics.
Playing ignorant of the new law is no defense. Under the U.S. Justice Department's fraud provisions, prosecutors no longer have to show criminal intent on the part of the physician, only that a "reasonable doctor" would known a certain practice is fraudulent. Recent data from the Federation of Chiropractic Licensing Boards indicate 196 board actions taken by 33 chiropractic licensing boards in the U.S., Canada and Australia. These cases were generally the most outrageous instances of fraud. If every board was to take action against every DC who committed any level of fraud, no doubt these numbers would be much greater -- perhaps in the tens of thousands.
The federal anti-kickback law prohibits the knowing and willful solicitation or receipt of any remuneration in return for referring an individual or for recommending or arranging for services paid for by Medicare or any health care program. Remuneration includes the waiver of coinsurance or deductibles or any other transfer of items or services for less than market value, as when the doctor submits a written document to the patient's third-party payor for the entire amount of the bill, yet knows that the co-payment was waived. While the doctor may consider this a professional courtesy, the laws calls it insurance fraud. Professional courtesy discounts may provide the patient with a prohibited benefit in exchange for seeing a particular physician. This practice of routine waivers not only overstate the fee charged, but also encourages overuse of services, as the patient has no financial consequence for securing the service.
In the chiropractic profession we see these discounts routinely used. In a local survey, over have of the DCs offered such waivers, even admitting it over the phone. It will be a sad state of affairs if and when an investigator decides to audit such practices, knowing this will result in another black eye for our collective image. Just as the use of free spinal exams, free chicken dinners and other tacky advertising methods are troublesome, the use of waivers is not merely tacky, it is illegal. With more people keeping an eye on insurance fraud, federal courts are looking more favorably on whistle-blowing suits that expose fraud and abuse. Rewards for those blowing the whistle can range from 15-25 percent. This is a powerful incentive for disgruntled ex-employees to use against their former employers. Employers beware.
Aside from the insurance fraud of such waivers, this practice is also plainly unfair and anticompetitive. If a prospective patient thinks all DCs are relatively the same, a discounted price would be a real incentive and advantage in new patient acquisition and maintenance. It is similar to a retailer selling below cost, such as the predatory pricing that Wal-Mart has done to underprice local pharmacies, which was found to be anticompetitive. It's difficult enough competing in managed care, but to add unfair predatory pricing by DCs who waive deductibles and copayments makes it ever harder for those who play by the rules.
Tacky ads, insurance fraud, and the PI mills in New Jersey, Florida, Connecticut and California that have gotten so much media and legal attention lately, reveal the desperate actions of greedy chiropractors. But the average violator is more likely a small, single-doctor office which is barely surviving, such as a new practitioner or one who has never learned to manage an office. Regrettably, marketing discounts to patients will only serve to attract cost-conscious patients -- those 13 percent of consumers who are looking for the cheapest price. When it comes to health care concerns, most people, the remaining 87 percent, go looking for the best doctor, not the cheapest.
Through external advertising or by word-of-mouth, a doctor who waivers deductibles or copayments will only attract the lower class of patients and thwart attracting value-conscious patients around whom a referral a practice can be built, instead of the turnstile practice that "cheap" creates. There is a huge difference between a Spine R Us office that offers free chicken dinners and waives copayments and a quality office built on internal business systems that empower the consumer (the wow factor) and teaches the added benefits of chiropractic health care (the value factor). Unfortunately for the Spines R Us practitioners, instead of the wow and value factors being paramount, their offices reek of the cheap factor and usually end in patient remorse, with patients leaving out the back door as fast as new patients enter the front door.
As the adage goes, "You get what you pay for." Sadly, those doctors who rely on insurance fraud, bait and switch advertising, turnstile patient management and an overworked staff usually end in burnt out doctors with little to show for their efforts. Rather than using these tacky methods, I urge these marginal practitioners to rebuild their offices using ethical business methods instead of gimmicks. It may take time, but just as the three little pigs learned, there's a hugh difference between a practice built with straw and one built with brick. It may take longer, but the rewards are longer lasting. And you may not end up in jail, or blown away by the big bad wolf.
Dr. J.C. Smith, 1978 graduate of Life Chiropractic College, is the author of The Medical War Against Chiropractors: The Untold Story From Persecution to Vindication. Contact Dr. Smith via his website, www.chiropractorsforfairjournalism.com.