Guideline: Refunds & Waivers
Chiropractors strive to provide their patients with high-quality, effective care. However, some patients inevitably will not be satisfied with their results, regardless of whether appropriate care was provided. These patients, or their caregivers, might request refunds of the professional fees they paid or waivers of outstanding fees.
In some cases, a chiropractor may wish to comply with the request. However, the chiropractor might worry that a refund or waiver could be misconstrued as an admission of negligence. Moreover, forgiveness of debt might trigger reporting requirements under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA Section 111).1
Because every situation is different, one set of standards relative to refunds and waivers does not exist. ChiroPreferred does not have a formal position regarding refunds and waivers, but generally does not advocate refunding or waiving professional fees that have been earned. However, if a chiropractor wishes to offer a refund or waiver, he/she should contact a ChiroPreferred patient safety and risk consultant or personal attorney with any questions or concerns.
This guideline will cover various factors that chiropractors should consider when contemplating refunding or waiving professional fees for patient care.
The objectives of this guideline are to:
Describe the various options that chiropractors have when confronted with a request for a refund or waiver of professional fees
Provide guidance on steps to take when offering a partial or full refund or waiver of fees
Review federal statutes and regulations that have potential implications for refunds and waivers
Discuss the concept of a release from liability as part of the refund or waiver transaction
Cover other important factors that chiropractors should consider when thinking about refunding or waiving fees
REFUND OR WAIVER REQUEST
When confronted with a request for a refund or waiver, chiropractors have several options: (1) deny the request for a refund or waiver, (2) refund or waive a portion of the fees, or (3) refund or waive the total fees.
Denying a Request for a Refund or Waiver
If the chiropractor plans to deny a request for a refund or waiver, it is usually best to reply to the request with a short letter. The chiropractor should send the letter via standard and certified mail with return receipt requested. See Appendix A for a sample letter denying a refund or waiver request.
Offering a Partial or Full Refund
Another option is to refund or waive some or all of the professional fees associated with the patient’s care. Chiropractors can offer refunds or waivers without the appearance of an admission of any wrongdoing. In doing so, avoiding any verbal or written acknowledgment of professional liability is important.
If a chiropractor decides that a partial or full refund of fees is appropriate, he/she should first determine who originally made the payment. If a third party, such as an insurance company, paid any portion of the fees, the chiropractor should notify that party of the intention to provide a refund.
The third party might request a direct refund of the fees it paid (rather than refunding the patient or caregiver). This request should be honored, with the understanding that copayments or deductibles paid by, or on behalf of, the patient will be refunded to the patient or caregiver.
Next, the chiropractor should notify the patient or caregiver in writing of the intent to partially or fully refund or waive the professional fees. See Appendix B for a sample letter that can be used in a refund or waiver transaction.
Finally, documentation of the transaction is necessary. The chiropractor should note the offer of a refund or waiver, and the acceptance of the offer, in the patient’s health record. Below is a sample of a suitable note:
“After several conversations and attempts at remediation, we have not been able to fully satisfy <patient name> with the results of <his/her> treatment. A refund/waiver of professional fees in the amount of $<dollar amount> has been offered/provided as a patient accommodation.”
NOTE: Special considerations relative to refunds and waivers apply to Medicare patients. Specifically, the Office of Inspector General (OIG) for the U.S. Department of Health and Human Services (HHS) finds that routine waivers of copayments, or providing “professional courtesy” discounts other than for financial hardship, may violate the federal Anti-Kickback Statute, the Federal False Claims Act, and other federal and state insurance fraud laws.2
When considering refunds or waivers for Medicare patients, chiropractors should consult with their ChiroPreferred patient safety and risk consultants and/or their attorneys.
National Practitioner Data Bank Reporting Considerations
Chiropractors should also be mindful of federal requirements concerning refunds and waivers that must be reported to the National Practitioner Data Bank (NPDB). Malpractice payments that are made must be the result of a written complaint or a written claim that demands monetary payment for damages, which includes any form of writing including pre-litigation written communications.
An entity that makes a payment (in whole or in part) on behalf of a chiropractor as a settlement or in satisfaction of a written claim or judgment for malpractice against that chiropractor must report the payment information to the NPDB. This requirement includes refunds of professional fees if they result from a written complaint or claim demanding monetary payment for damages, and they must be based on a chiropractor’s provision of, or failure to provide, chiropractic services.
However, a waiver of a debt is not considered a payment and is not reportable to the NPDB. For example, if a patient has an adverse reaction to a treatment and accepts a waiver of fee as settlement, then that waiver does not need to be reported to the NPDB.
Additionally, individual chiropractors are not required to report to the NPDB payments made on their own behalf. So, a chiropractor or other individual that makes a malpractice payment from personal funds is not required to report the payment. However, a professional corporation or other entity composed of a sole practitioner that makes a payment for the benefit of the named practitioner must report that payment to the NPDB.3
Release From Liability
When offering a refund or waiver of professional fees, chiropractors may wish to seek a release from liability from the patient or caregiver, so as to discourage any sort of future legal action related to the care in question.
Whether to seek a release from liability is typically a decision made on the basis of the exact circumstances of each case. If a release form is used, it must be carefully worded to avoid an inadvertent admission of negligence or to further inflame an already upset patient or caregiver.
A ChiroPreferred patient safety and risk consultant can help ChiroPreferred policyholders determine whether requesting a release from liability might be appropriate. If a release is pursued, the consultant can supply the chiropractor with a release form that is appropriate for his or her state.
Refunds That Exceed the Amount of Professional Fees
If a chiropractor wishes to offer a refund in any amount that exceeds the professional fees already paid, the situation must be handled differently than described previously.
In this scenario, the chiropractor should contact his or her professional liability claims specialist, who will be able to provide advice about whether a payment can be made without violating any provisions of the chiropractor’s insurance policy or the NPDB reporting requirements.
Chiropractors should consider three additional points related to refunds and waivers. First, if the patient or caregiver is so dissatisfied that the chiropractor is considering a refund, then he or she might be uncertain as to whether to continue treating the patient. These decisions are best made on a case-by-case basis; however, it is prudent to consider whether ending the professional relationship is appropriate.
Second, as noted earlier, forgiveness of debt or a refund may trigger duties to report electronically to the Centers for Medicare & Medicaid Services (CMS) if the patient is Medicare eligible. Under MMSEA Section 111, a medical professional making any payment exceeding the $1,000 threshold to satisfy a claim may meet the definition of a self-insurer, thus becoming subject to federal reporting requirements.4
A reportable payment can be anything of value given to a patient or caregiver, including a refund of previously paid medical bills, forgiveness of outstanding medical bills, free services, gift cards, or any sum of money. Accordingly, chiropractors should exercise caution when making any refund or payment to or on behalf of a patient. Failure to report a required transaction may result in a penalty of $1,000 per violation per day.
Information regarding CMS and reporting requirements can be found at www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/Overview.html. Given the complexity of the issue, ChiroPreferred recommends that providers consult with their personal attorneys if they have additional questions.
Third, in refund or waiver situations, the tendency might be to view the patient or caregiver as a malcontent who simply needs to be mollified so that the chiropractor and staff can get back to business. Thinking of the situation this way may deprive the chiropractor of the opportunity to review an instance of care that was unsatisfactory — at least in the eyes of the patient or caregiver. It is good practice to review such patient encounters. The goal should be to identify any office policy or practice that staff could improve, so that future instances of dissatisfaction can be avoided.
Under the right circumstances, a refund or waiver of professional fees can be an effective tool. It may help diffuse patient dissatisfaction and bring final resolution to a disputed matter. However, the details of each case should be considered individually, and chiropractors should ensure that any transactions do not violate state or federal laws or requirements. Careful management of each case will facilitate an outcome that is satisfactory to all parties involved.
 Public Law 110–173, Approved December 29, 2007. Retrieved from www.gpo.gov/fdsys/pkg/PLAW-110publ173/content-detail.html
 42 U.S.C. § 1320a–7a; Social Security Act, § 1128A(a)(5). Civil monetary penalties.
 National Practitioner Data Bank. (2015). National Practitioner Data Bank Handbook. Retrieved from www.npdb.hrsa.gov/guidebook/EMMPR.jsp
 Centers for Medicare & Medicaid Services. (2014, December). Mandatory insurer reporting for non-group health plans. Retrieved from http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Mandatory-Insurer-Reporting-For-Non-Group-Health-Plans/Overview.html
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