Ep. 70 – Use caution before charging patients extra fees

As healthcare providers face mounting administrative burdens and tighter reimbursement rates, some are exploring the idea of charging patients for “extra” services, such as administrative tasks or added “perks.” But before rolling out such a program, there are serious compliance issues that providers and compliance officers must understand.

Medicare participation means limits on extra fees

If you accept Medicare and have not formally opted out, you’re required to accept Medicare’s approved payment as full reimbursement for all covered services. That means adding on mandatory administrative fees – even for tasks like prescription refills or care coordination- can violate federal law. The Office of Inspector General (OIG) has issued warnings and pursued enforcement actions against providers who tried to charge Medicare patients extra fees for items deemed to be included within “covered services,” including expedited referrals and prescription refills.

Medicaid and private insurance raise similar concerns

Medicaid programs, like Medicare, prohibit billing beneficiaries for services the program already covers. Some states also have rules outlining when and how charges can be applied for truly non-covered services. Similarly, private insurers generally do not allow providers to charge insured patients separately for services included in their coverage, and doing so can violate both contract terms and state law.

Defining “non-covered” services is tricky

What complicates things further is when there’s no bright line between what is or isn’t covered. Tasks like care coordination, appointment scheduling, or 24/7 phone access can exist in a gray zone. Even if you believe a service is non-covered, the payer may see it differently.

To navigate these nuances, it’s critical to work closely with your legal counsel to:

• Clearly define which services you’re charging for
• Ensure those services are not already reimbursed by a payer
• Document patient consent with transparent written agreements
• Check for applicable state laws and licensing board rules
• Monitor changes in how services are classified

Other ethical considerations

If you are considering a concierge or membership-based model, the American Medical Association (AMA) provides additional ethical guidance, including that participation be voluntary, clearly explained, and equitable and that patients are not denied necessary care simply because they cannot – or choose not to – pay an added fee. State laws, including licensing regulations, may provide additional requirements. Any agreement to participate in a membership or concierge-based model should also be structured with the assistance of legal counsel.

Final Takeaway

Extra fees and administrative charges may seem like a practical solution to rising overhead, but they carry real compliance risks – especially for Medicare and Medicaid providers. Proceed with caution, seek legal guidance, ensure transparency with patients, and continuously monitor regulatory developments.