Providers should be aware that they are violating their Medicare Participation Agreement and could face sanctions for: (a) charging patients a late fee for unpaid co-pay and deductible balances; or (b) assessing an administrative fee to cover costs associated with running the medical practice. 

        Medicare laws restrict the amount that practices can charge patients when they bill Medicare as both participating and non-participating Medicare providers.  According to CMS, providers who accept assignment agree to accept the Medicare fee schedule amounts as "the full charge for the service."  Therefore, imposing penalties or late fees is interpreted by CMS as an impermissible increase to the charge for the Medicare-covered services that cannot be collected by the provider.  Although the position being taken by CMS may be challenged down the line, smaller practices should follow CMS rules since they likely cannot afford to fight CMS on the issue. 

        To comply with the law but still protect the interest of a practice, another option may be to charge patients for the co-pay upfront.  But even this approach can be a challenge for medical practices who may not know precisely what the patient owes until Medicare pays.  Practices that are worried about lost co-pays should focus on patients that are not treated often by the practice since patients who are seen regularly in the practice and who pay their bills are likely to continue to do so. 

        Providers should also be careful not to charge any fees for retaining, maintaining or retrieving patient medical records.  HIPAA forbids providers from charging patients for such services.  Practices are allowed to charge patients for items that are clearly not included in the Medicare payment, such as a reasonable fee for making a copy of the patient’s medical records, after hour prescription refills or writing letters to employers. However, practices would be better off charging patients when a request for a specific service is made, rather than instituting a blanket charge for all patients. 

        If you have any questions regarding the manner in which your practice operates and if you are in compliance with Medicare rules, please contact our office.