HI 00401.325 Effect of Waiver of Coinsurance or Deductible on Determination of Actual and Customary Charges

The criteria that the carrier considers in determining the reasonable charge ( HI 00401.305 ) for a service or item include (in addition to the prevailing charge HI 00401.320 ) the customary charge ( HI 00401.315 ) of the physician or supplier who furnished it, and the actual charge made. In this regard, a billed amount that is not reasonably related to an expectation of payment is not considered by the carrier to constitute the “actual” charge.

Therefore, when a physician/supplier routinely and consistently waives the collection of coinsurance or deductible amount, from or on behalf of Medicare beneficiaries generally, the carrier reviews the circumstances to determine whether this constitutes a reduction of the physician's or supplier's actual charges and customary charges.

Situations where a physician or supplier does not have a general policy of waiver of coinsurance but accepts a lesser amount than the usual charge in discharge of a patient's liability because of a particular patient's straitened circumstances will not be considered to constitute a reduction of the actual charge made.

If the DO learns of a physician's or supplier's prior advertisement of a general intention to waive collection of Medicare coinsurance or deductible amounts, or other evidence that such waiver is settled business policy; or that the physician/supplier generally fails to make reasonable collection efforts (similar to those customarily made to collect comparable amounts from non-Medicare patients), report this information to the carrier.