OIG nixes potential copayment waiver

In its latest advisory opinion dealing with the potential waiver of copays, the Health and Human Services Office of Inspector General (OIG) determined that an X-ray provider’s proposal to waive the Medicare Part B copayments applicable to the portable X-ray services it provided to nursing home patients potentially could violate the anti-kickback statute.

The X-ray provider proposed to waive the copayments of nursing home patients who are provided full, dual coverage by Medicare and Medicaid. While Medicaid frequently pays the Medicare copayment owed by dually covered beneficiaries, it does not pay the Medicare copayment for portable X-ray services provided by non-Medicaid-approved providers. Absent the waiver, the recipient would be liable for the copayment.

In making its decision, the agency expressed concern that the proposed waiver would not be based on a good-faith, individualized determination of need and would not be applied uniformly, since the provider intended to waive copayments only for nursing home residents.

The OIG also noted that the nursing home, which served as a potential referral source for the X-ray provider, would benefit from the waiver through decreased administrative costs and increased fees.

The advisory is a fairly straightforward application of the law, according to Ankur Goel of McDermott Will in Washington, DC, who says the provider basically was trying to get business it could not otherwise get because of a complicated Medicaid rule in a particular state. While the rules in question may not make sense to the provider, there was not a strong basis for OIG to waive the prohibitions, he says.

Technically, copays can be waived only on an individual financial basis, Goel notes. "Even if you think the state law is unfair and that the patient should be covered under Medicaid, that is not a sufficient reason to remove the restriction."

Goel adds that, in most cases, the OIG’s concern about waiving copays is overutilization of services. In this case, he says, the larger concern appeared to have less to do with overutilization than with competitive issues. "You don’t really see in the opinion any direct explanation of what the harm is to the program," he says. "It is written more in terms of harm to competitors."