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Professional Courtesy


Question: Do Medicare and private insurance companies allow professional courtesy discounts?

"Professional Courtesy" refers to the provision of medical care to physician colleagues or their families free of charge or at a reduced rate.

The Health Insurance Portability & Accountability Act (HIPAA) of 1996 mentions that a physician is not allowed to give away services for free or for below fair market value as inducement for patients to come to his office.

The federal anti-kickback statute (42 U.S.C. 1320-a-7b) addresses this issue as well. This statute essentially prohibits physicians from "routinely" providing services at a reduced rate or for no charge as an inducement for those "patient's" to return to the facility.

If a physician routinely provides a discount or completely waives the fee for his "friends/colleagues" etc.. s/he is in direct violation. A violation of this provision of the anti-kickback statute is punishable by a prison term of five years of less, a $25,000 fine, or both.

The AMA Report from the December 1997 meeting addressed this issue to their Board of Trustees. The report states that their extensive research has failed to uncover any instance where a physician has been prosecuted by either the OIG or the DOJ for fraud or abuse based on the extension of professional courtesy.

On the other hand, prosecutions for the routine waiver of Medicare coinsurance have involved schemes to provide medically unnecessary services, and were not examples of professional courtesy.

The AMA continues to press the DOJ and HHS that:

1. Professional Courtesy should not be confused with routine waiver of co-payment and other schemes to defraud payers.

2. Professional Courtesy not be confused with intentional acts to generate referrals for the provision of Medicare/Medicare covered services.

The best advice is to consult your attorney. Additional information is available on the following web sites:

Full text of 42 U.S.C. 1320a-7b:

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