The last patient of the day is the son of a local pediatrician. The boy fell off his snow board and sustained a wrist fracture. You cast the fracture, check the postreduction films, and tell his mom that you want to see the boy in a week to check the alignment with another X-ray. As you fill out the charge ticket, you tell the receptionist, “No charge for today.”

Easy, right? Think again.

Professional courtesy was once a time-honored tradition demonstrating mutual respect for others in the medical profession. Today, it is complicated by Medicare and Medicaid federal regulations, as well as by state business and professional fraud statutes. In some cases, extending professional courtesy could even lead to fines and/or imprisonment.

What happened to the concept of professionals simply taking care of their own? How far do the regulations go? If I suture my son’s chin laceration, do I have to collect the copayment first? If I do surgery on my partner, can I still bill the insurance, even though he has a large deductible? The issues surrounding these questions are complex and confusing, forcing physicians to wonder: Is professional courtesy worth saving?

Proceed with caution
We as physicians have all been through similar experiences in learning the craft and making difficult life choices. We’ve shared the indignities of internship and residency and learned to survive in a world of declining reimbursements and payer regulatory hurdles. One of the last areas we can demonstrate mutual respect to our cohorts in medicine is in the area of professional courtesy. For many of us, it is too important to just throw away.

Unfortunately, the complexity of the times and the increased emphasis on uncovering fraud and abuse in health care work against the continuation of this practice. Federal regulations specifically spell out that conspiracy to commit fraud is punishable by fines and possibly jail time.

An understanding of the potential liabilities begins with the Health Insurance Portability and Accountability Act (HIPAA) of 1996. Prior to HIPAA, federal fraud and abuse regulations only applied to Medicare and Medicaid. Under HIPAA, these same regulations were extended to include all federal health plans as well as private health plans. Private insurers were now free to pursue fraud and abuse activities in accordance with federal regulations.

Not collecting a copayment from a patient (eg, billing insurance only) is an act of collusion to defraud the insurance carrier. There does not have to be the intent of fraud; the act of collusion is the acceptance of less money than the provider is contracted to accept.

For example, if you charge $200 for a service for which the patient has a 20 percent copayment, the insurance company will assume you collected the $40 from the patient and send you a check for $160. If you do not collect the $40, the insurer assumes that the charge for the service is $160, and thus they should have paid you 80 percent of $160, or $128. The insurer considers that you were overpaid by $32 and that you “conspired” with the patient to defraud the insurer out of the $32.

If you selectively choose not to charge a patient any fee, you may find yourself in violation of antikickback statutes. Under these statutes, it is not necessary that the government prove that you actually purchased referrals, but only that your actions might induce the receiving party to refer to you.

Under certain safe harbors, you may still be able to give courtesy discounts. For example, you can establish and follow a written policy that you will waive the entire fee or certain types of fees (eg, professional services) to all physicians in your service area, whether they are in a position to refer patients or not. This way you are not defrauding the insurance company, nor is there an inducement to refer since the physician will receive the discount whether a referral is made or not. However, the physician/patient must fully disclose the amount of the discount in any cost reporting and should not claim that he or she paid a waived fee to meet a deductible.

Another safe harbor example would be to institute a waiver of deductible/copayments as a general policy in the case of indigent patients. The amount of money waived may not be used in bad debt calculations or as an inducement to influence any other purchase of goods or services.

Depending on the laws in your state, you may have the option as an employer to provide orthopaedic care reimbursements to partners or staff as part of your benefit package even though you cannot bill insurance as the provider of such services.

The penalties for violations can include monetary penalties of up to $15,000 per claim, and up to $100,000 for each referral-inducing financial arrangement. These penalties can be even stricter for teaching hospitals and nonprofit institutions and may affect their 501(c)(3) status.

What do we do?
Whether—and to whom—you extend “personal courtesy” is a personal decision best made when all of the facts are known. For myself, I care more about my colleagues and their families than I do about protecting insurance companies. Some decisions will have to remain just that—personal. Maybe that’s why it’s called “private” practice.

Thomas J. Grogan, MD, chairs the AAOS practice management committee. He can be reached at TJGrogan@aol.com