Professional Courtesy in the Context of Health Care Fraud and Abuse
In response to the numerous questions the American Medical Association (AMA) receives on the appropriateness of professional courtesy, the AMA's Board of Trustees developed a report, Board of Trustees Report 18-A-98, that sets out the ethical underpinning to professional courtesy and discusses application of Medicare fraud and abuse authority where professional courtesy is provided. Key points from that report are presented here.
Physicians have a long tradition of extending professional courtesy to their colleagues. In prior days, a decision to provide professional courtesy was strictly between the physician and his or her patients. However, today's legal climate means that a decision to provide professional courtesy is not a simple determination. In discussing professional courtesy, Current Opinions 6.13 and 6.12 from the AMA Council on Ethical and Judicial Affairs are instructive.
Ethical Opinion 6.13 - Professional courtesy. Professional courtesy refers to the provision of medical care to physician colleagues or their families free of charge or at a reduced rate. While professional courtesy is a long-standing tradition in the medical profession, it is not an ethical requirement. Physicians should use their own judgment in deciding whether to waive or reduce their fees when treating fellow physicians or their families. Physicians should be aware that accepting insurance payments while waiving patient copayments may violate Opinion 6.12.
Ethical Opinion 6.12 - Forgiveness or waiver of insurance copayments. Under the terms of many health insurance policies or programs, patients are made more conscious of the cost of their medical care through copayments. By imposing copayments for office visits and other medical services, insurers hope to discourage unnecessary health care. In some cases, financial hardship may deter patients from seeking necessary care if they would be responsible for a copayment for the care. Physicians commonly forgive or waive copayments to facilitate patient access to needed medical care. When a copayment is a barrier to needed care because of financial hardship, physicians should forgive or waive the copayment.
A number of clinics have advertised their willingness to provide detailed medical evaluations and accept the insurer's payment but waive the copayment for all patients. Cases have been reported in which some of these clinics have conducted excessive and unnecessary medical testing while certifying to insurers that the testing is medically necessary. Such fraudulent activity exacerbates the high cost of health care, is unethical, and violates Current Opinion 2.19. (Physicians should not provide, prescribe, or seek compensation for services that they know are unnecessary.)
Physicians should be aware that forgiveness or waiver of copayments may violate the policies of some insurers, both public and private; other insurers may permit forgiveness or waiver if they are aware of the reasons for the forgiveness or waiver. Routine forgiveness or waiver of copayments may constitute fraud under state and federal law. Physicians should ensure that their policies on copayments are consistent with applicable law and with the requirements of their agreements with insurers.
Clarifying the right to provide professional courtesy
The routine waiver of copayment has been construed as a fraudulent misrepresentation of physician charges against payers of all types. While the routine waiver of copayment should not be confused with the occasional grant of professional courtesy, physicians must be aware that laws designed to prevent fraud might have an effect on legitimate, even honorable, conduct. For example, physicians have often characterized professional courtesy as accepting whatever the insurance plan allows as payment in full. However, where the patient is a Medicare beneficiary, such an action would run afoul of the Medicare program.
Under traditional Medicare, physicians are paid 80 percent of the allowable amount: the lower of the payment schedule amount or the actual charge. In an instance where Medicare allows $100, the program pays $80 and the copayment amount is $20. A determination to only accept "what insurance pays" as payment in full could be seen as the physician having an actual charge of $80, and the resulting insurance payment should be $64.
Even extending professional courtesy through the promise of free care could be viewed as a violation of the federal anti-kickback law if there is a link between the care provided and subsequent referral of patients who are Medicare or Medicaid beneficiaries. Under this law, an illegal kickback occurs where there is a referral for a Medicare or Medicaid covered service as a result of the receipt of remuneration that influences the ordering or receipt of services from a particular practitioner or entity. One of the Health Insurance Portability and Accountability Act (HIPAA) amendments to the anti-kickback law expanded the definition of "remuneration" to include "waiver of coinsurance and deductible amounts (or any part thereof), and transfers of items or services for free or for other than fair market value." While the law allows exceptions for financial need, it is unlikely that financial need would be applicable in many cases of professional courtesy.
Physicians should exercise caution in extending professional courtesy where the patient may be in a position to make referrals. If the physician's intent behind extending professional courtesy is to generate referrals for Medicare or Medicaid covered services, the government will be in a position to prosecute a fraud or abuse case for a violation of the anti-kickback law.
Extensive research has failed to uncover any instance where a physician has been prosecuted by either the OIG or the DOJ for fraud or abuse based on the extension of professional courtesy. Furthermore, the OIG is unlikely to initiate a fraud or abuse investigation related to the traditional act of professional courtesy. On the other hand, prosecutions for the routine waiver of Medicare coinsurance have involved schemes to provide medically unnecessary services, and were not examples of professional courtesy.