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    Pros and cons of offering professional courtesy

    This traditional practice now involves insurance carriers

    Professional courtesy, waiving all or part of professional fees, now has become a field day for lawyers and third-party carriers—and an unwary trap for the well-intentioned doctor. This practice was once almost a given when visiting a colleague for professional services. The concept hasn’t changed, but the rules have now levied a chilling effect on how professionals treat each other and their families.

    While professionals are free to extend professional courtesy to whomever they wish, the difficulty is we now live in a controlled insurance environment with copays, insurance-only patient billings, and interprofessional referrals. Due to this shift in the way we do business—unless you have a cash-only practice—keep legal ramifications in mind.

    Related: Managing an office and optical move

    Origins of the practice

    The original purpose of professional courtesy was to discourage physicians from treating themselves and their immediate family members.1

    While the custom dates back to Hippocrates, Thomas Percival endorsed complimentary professional care in 1803 with his essay on medical ethics. This courtesy extended to pharmacists, physicians, surgeons, and their children and spouses. This concept was further endorsed by the American Medical Association’s Code of Ethics in 1847.2

    Insurance involvement

    Clearly it is your financial bottom line that is directly affected should you choose to waive or discount a patient’s charge or copay. Unfortunately, third-party carriers have a different take on your generosity.

    They argue that if you give your patients a break, they are entitled to the same level of generosity.3 The fact that reimbursements for your services may already be discounted as a plan provider is not considered.

    Doctors may cut patient costs by waiving the copay and thus give patients a discount on their care. However, the federal government—as well as private payers—does not just discourage waiving the fee; it outright bans it.3 Furthermore, the doctor must make a reasonable effort to collect those copays.3

    If you elect to give a discount or reduction of your usual and customary fee, you must apply that discount or percentage off the entire bill—both what the patient pays and what the insurance company is billed.4 It is conceivable the patient may pay his entire copay and the insurance company alone benefits from your generosity.

    Related: The benefits of cleaning out your practice

    Giving dollars off materials constitutes a discount as well4 and should be considered professional courtesy, falling under the same rules and regulations as professional services.

    In addition, many insurance companies have a “most-favored nation” clause that allows the insurance plan to pay the lowest charge that you bill to anyone.4 Therefore, the doctor can neither hide medical information by not charging the insurance company when services are rendered nor refuse to charge the patient for a visit, then bill the insurance company for work that would not have been approved if it was part of a reimbursed visit.

    Yes, this is very confusing.

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