Can physicians waive out-of-network patient co-pays?

Health care providers ought not to waive or discount a patient’s copayment, as it has serious legal and business implications. However, some providers do waive the extra charges for patients, if they think they are hard-pressed financially. This is a practice insurers view as fraudulent. They consider it a ploy by non-contracted providers to retain out-of-network patients. So in light of the foregoing, can physicians waive out-of-network patient co-pays.

As a general rule, patients treated by out-of-network providers, are charged extra for going outside the network.  They often go this route, when they are aware that some of their out-of-pocket expenses will not be billed. For their part, some doctors are willing to forgo the extra expenses, because the fees they collect being outside the network are higher than in-network fees.

This was brought into focus in November 2014, by the ruling of the Ninth Circuit’s Court of Appeals in the Spinedex Physical Therapy v. United Healthcare of Arizona, Inc. matter. Spinedex brought the suit against United Healthcare for non-payment of health claims submitted. United was the claims administrator for several health plans to which patients treated by Spinedex were enrolled. Spinedex was an out-of-network provider, and United argued that they failed to collect its charges from the patients.

The Ninth Circuit Court of Appeals ruled in favor of Spinedex. This has been seen as a victory by out-of-network providers, in their ongoing dispute with health plans about waiving co-pays.

However, attorneys caution that the judgment by the Court of Appeals does not signify an endorsement of the practice. A lot depends on the terms included in the respective health plans. It is therefore best to seek legal advice before deciding to waive out-of-network patient co-pays. For more information contact Nelson Hardiman, LLP at 310-203-2800 or email [email protected]

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