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Patient Discounts Policy

You may have recently read that hospitals were scolded by the Office of the Inspector General for refusing to offer discounts to indigent and needy patients. The Healthcare Billing and Management Association (HBMA), of which Practice Management is a member, went one step further to find out if the OIG holds a similar view for discounts offered by physicians. The OIG responded indicating that their policy for hospitals also applies to physicians. A portion of the original OIG directive is reprinted below, the word physician has been inserted to reflect the OIG clarification.

“Hospitals (Physicians) have the ability to provide discounts to uninsured and underinsured patients who cannot afford their hospital bills and to Medicare beneficiaries who cannot afford their Medicare cost-sharing obligations. Nothing in the Office of the Inspector General (OIG) rules or regulations prohibits such discounts, and the OIG fully supports the hospital (physician) industry’s efforts to lower health care costs for those unable to afford care. While every case must be evaluated on its own merits, it is important to note that the OIG has never brought a case based on a hospital’s (physician’s) bona fide discounting of its bill for an uninsured or underinsured patient of limited means.”

“Hospitals (Physicians) should use a reasonable set of financial need guidelines that are based on objective criteria and appropriate for the applicable locality. The guidelines should be applied uniformly in all cases.”

“The OIG recognizes that what constitutes a good faith determination of “financial need” may vary depending on the individual patient’s circumstances and that hospitals should have the flexibility to take into account relevant variables.”

“While the OIG is not concerned about bona-fide cost-sharing waivers for beneficiaries with genuine financial need, we have a long-standing concern about providers and suppliers that use “insurance only billing” and similar schemes to entice Federal health care program beneficiaries to obtain items or services that may be medically unnecessary, overpriced, or of poor quality.”