Some Doctors Letting Patients Skip Co-Payments
By MILT FREUDENHEIM

For years, health plans have sought to control medical costs by negotiating fees with a group of preferred doctors and requiring patients to pay extra for going outside the network. But some doctors and clinics - eager to help hard-pressed patients or calculating that it can benefit their business - have begun to foil the cost-control efforts by waiving those extra charges.

The move by these providers to dispense with collecting what are known as coinsurance payments comes as employers and insurers try to discourage overuse of health care by making patients pay more costs from their own pockets. But those efforts - and the squeeze on doctors as health plans shrink payments for in-network care - are generating resistance, experts say.

Health plan members are "going out of network for surprisingly expensive medical services,'' said Tom Farley, who audits managed care plans across the country for the Towers Perrin consulting firm. That behavior suggests "some sort of tacit agreement between the provider and the patient to not bill for some of those out-of-pocket expenses,'' he said.

Dr. Michael O. Fleming, president of the American Academy of Family Physicians, said that doctors' efforts to find ways around the insurers' cost-control strategies are "a reaction to the ratcheting down of managed care fees.''

Doctors are waiving coinsurance payments for several reasons, analysts say: to recruit patients who would otherwise go to doctors on a health plan's preferred list; to help people struggling with the cost of care, and to reduce their own costs for processing insurance paperwork and dunning patients who are slow to pay.

These doctors can afford to pass up the payments because the out-of-network fees they collect from insurers often are higher than those they would collect as members of a health plan's network.

… Regularly waiving co-insurance payments or co-pays _ the $10 or $20 payments many plans impose for office visits - is against the rules in the government Medicare and Medicaid programs. A few states - Colorado, Georgia, Nevada, South Dakota and Texas - also prohibit the practice for patients covered by commercial insurance, according to Dennis M. Barry, a Washington lawyer who studies health care reimbursement issues.

Colorado and Georgia also forbid advertising the waivers to attract business. A handful of states have banned the waiver of co-payments and deductibles by dentists and chiropractors. And Ohio prohibits routine waivers of co-payments, but not deductibles, by physicians, pharmacists, psychologists, physical therapists, nurses and optometrists, according to a survey published last month by Mr. Barry and Lori Mihalich.

Waiving payments for indigent patients or to placate those who have complaints about their treatment "should not pose legal issues,'' however, they said.

A policy statement by the American Medical Association's Council on Ethical and Judicial Affairs says that "physicians should forgive or waive the co-payment'' if it would pose "a barrier to needed care because of financial hardship.'' The statement warns, though, that "routine forgiveness or waiver of co-payments may constitute fraud under state and federal law.''