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14 Health Law. 1 (2001-2002)
Waiver of Copayments as False Statements

handle is hein.journals/healaw14 and id is 111 raw text is: THE ABA HEALTH LAW SECTION H EALTH H LAWYER IN THIS ISSUE WAIVER OF COPAYMENTS AS FALSE STATEMENTS Waiver of Copayments as False Statements ................ 1 Judicial Recognition and Enforcement of HIPAA Subpoenas .......................... 10 Medicare Provider Liability Following the Sale of Assets or Stock of a Provider Operating Under Chapter 11 .............. 15 In Furtherance of Accountability in Health Care: Rush Prudential HMO, Inc. v. Moran, et al ..... 22 Legal Ramifications of the Formation of Digital Hospitals ................. 27 Ronald J. Nessim and Benjamin N. Gluck Bird, Marella, Boxer & Wolpert Los Angeles, CA Introduction Under Medicare, Medicaid, and most private insurance plans, the payment of healthcare costs is divided into two elements, a deductible or copay that is paid by the patient, and the remaining cost that is paid by the insurance provider, whether government or private. For Medicare and Medicaid, this division is 80% - 20%, meaning that the government pays $80 of a $100 service and the patient pays the remaining $20. The healthcare provider has the responsibility to bill and collect the copay directly from the patient. One reason for collecting copays is simply the money they bring in. When patients pay 20% of the cost of a proce- dure, the primary payer's expenses are reduced by that amount. But copays also serve another purpose. Because most people are more careful with their own money than they are with someone else's, requiring patients to chip in by paying a copay helps ensure that they will not seek medical services unless they really have to. Though copays are supposed to be collected in all cases, providers sometimes formally waive copays or merely fail to collect them. Sometimes this is for good reasons and motives, such as in the case of historically charitable hospitals which have resisted charging copays because they conflict with the hospitals' mission to provide free healthcare. Also, the patient may be indigent or otherwise unable to afford the copay. Sometimes, however, providers waive copays for motives that are not so virtuous, such as in an effort to increase patient utilization. In two separate pronouncements, the government has asserted that in addition to constituting an illegal kickback, when a provider improperly waives a copay, it makes a false statement when submitting a claim seeking reimbursement based on the full charge. Specifically, the government asserts that the charge entry on the provider's claim forms requires that the provider state the total amount, including the copay, it expects to collect. When the provider waives the 20% copay on a $100 procedure, however, the true charge is not $100, but $80. Therefore, according to the government, indicating that the charge is $100 when there is no intent to collect the $20 copay is a false statement. In this article we examine the federal government's false statement argument, which to date is untested in any reported judicial opinion, and conclude that a defendant charged with making such a false statement may have strong defenses to continued on page 3 Volume 14, Number 4 June 2002 AS FALSE STATEMENTS

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