About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

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


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
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


What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.

Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Contact us for annual subscription options:

Already a HeinOnline Subscriber?

profiles profiles most