OK TO WAIVE CO-PAY?
The question whether it is acceptable for dental offices to waive a patient’s co-payment when accepting their dental insurance plan and accept the insurance as payment in full frequently arises. Many dentists who demand the patient’s full co-pay feel they are unable to compete with neighboring dentists who accept insurance as payment in full in that patients may make their practice selection based upon the financial demands of the office. Dentists who do waive co-pay feel they are making dental services available to those who could not otherwise afford them by fully utilizing the plan. Further, this issue arises in State Board actions and other civil and criminal actions alleging insurance fraud and other related claims against dentists.
As a practicing dentist, I always thought that to waive co-pay was ‘illegal.’ This is generally
the case, however, the question is certainly not that simple. And, to complicate matters, the
different regulating and enforcement agencies and courts often disagree. In this article I will briefly
review some of the different positions and discuss other legal issues on the subject.
The legality of requiring co-pays was recently upheld in Smilecare Dental Group v. Delta Dental Plan of California. In that case, Smilecare offered a supplemental plan (Smilecare Coverage Plus) which provided coverage for the co-payment. Delta does not recognize co-pays made by supplemental insurers as contractually valid and finds dentists who accept such payments to be in breach of contract. Smilecare’s position was that Delta’s policy violates the Sherman Anti-trust Act by restricting competition.
The court found in Delta’s favor and uttered a profound statement:
“insurance creates a moral hazard because it desensitizes patients to costs and induces them to
seek inordinate amounts of care; co-payments offset this hazard by forcing patients to reflect upon
the cost of services and moderate their demands for treatment.”
In conclusion, the issue is still somewhat unsettled and it remains a ripe area for future litigation. But, if I were you, I wouldn’t hang my hat on the Attorney General’s opinion because the stakes may be high!
© Bette Robin, DDS, JD 8/98