A Patient Who Cannot Afford the Copay
A 62-year-old patient with ALS needs a bi-level positive airway pressure device with a backup battery. The patient is on Medicare Part B and has a Medicare Advantage plan with a 20% copay. The supplier's billed amount for the device and battery is $6,800, leaving an estimated copay near $1,360. The patient lives on Social Security and says she cannot pay the copay. The supplier's policy is to collect copays at delivery, but the patient's physician says the device is urgently needed. The patient's daughter offers to pay $200 now and the rest later. The supplier's billing staff are unsure whether they can waive the copay or set up a payment plan.
1. Can the supplier waive the copay? Explain the reasoning and the risks.
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Routinely waiving Medicare copays is risky. Waiving cost-sharing can be treated as an inducement to the beneficiary to use the supplier's services, which raises anti-kickback and beneficiary-inducement concerns, and it can also affect the supplier's billing integrity. A waiver is generally permissible only when there is a genuine financial hardship determination made under a documented policy applied consistently, not a routine practice of forgiving copays for anyone who asks.
The supplier should not simply waive the $1,360 because the patient says she cannot pay. It should apply its financial hardship policy, which should define eligibility, require documentation of income and expenses, and be applied consistently to similarly situated patients. The supplier should also check whether the Medicare Advantage plan has cost-sharing reductions or a maximum out-of-pocket limit that affects the amount.
2. What options should the supplier offer the patient, and how should it document the arrangement?
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The supplier should offer a written payment plan: the $200 now, with a schedule for the balance, signed by the patient, showing the amounts and dates. The supplier should also screen the patient for financial hardship under its policy and for any assistance programs, and check whether the Medicare Advantage plan has a cost-sharing cap or reduced copay for this equipment. The supplier should not condition urgent delivery on full payment if the device is medically necessary and the supplier can safely deliver it; it should deliver, document the need, and pursue the balance through the payment plan.
The supplier should document the patient's financial statement, the payment plan, the delivery date, and the device's medical necessity. It should also document any hardship determination and the reason for it. If the supplier later decides to write off part of the balance, that decision should be made under the written policy and documented, not handled informally by billing staff.
3. The patient's daughter asks whether she can be responsible for the balance. What should the supplier tell her, and what are the limits?
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The supplier can accept the daughter's voluntary payment and can enter into a payment plan with her if she agrees to be responsible for the balance, but it must be genuinely voluntary and documented. The supplier should not tell the daughter she is legally required to pay the patient's debt unless she has agreed to be a guarantor; family members are not automatically liable for a patient's copay. The supplier should explain the amount, the schedule, and what happens if payments are missed, and get her signature on the agreement.
The supplier should keep the patient's and daughter's obligations separate and clear, and should not use pressure or imply that the patient will lose the equipment if the daughter does not pay. The supplier should also confirm the arrangement complies with its financial policy and that the patient's own hardship screening was completed. All discussions and the signed agreement should be documented in the record.