Patients who lose their insurance: To treat or not to treat?
Legally Speaking
Robert M. Portman, JD, MPP, is a health care attorney with Powers Pyles Sutter & Verville, in Washington, DC, and serves as legal counsel for the AAD and AADA.
By Robert M. Portman, JD, MPP, and Christina L. Krysinski, JD, January 1, 2018
Recent proposals in Congress to repeal the Affordable Care Act have raised the prospect that between 14 and 25 million Americans could lose their health insurance coverage in the next few years. Even absent a change to the health care law, there is always the possibility that patients may lose their insurance coverage as a result of job loss or another life event. As a physician, this raises the question: What do you do when one of your patients suddenly loses their insurance coverage and doesn’t have the financial means to pay your fees? While physicians often confront the effects of lack of access to adequate health care on a larger scale, your responsibilities are different when you have a physician-patient relationship with an individual. This article covers your potential legal and ethical obligations to patients who have lost their insurance coverage.
Q: Am I legally required to continue treating a patient who has lost their insurance coverage?
A: No, but you generally must give the patient enough notice to find a new doctor and you should not terminate a patient who is in an unstable condition.
Under common law, physicians typically do not have an obligation to treat any patient — doctors are free to choose or refuse patients as they see fit. The (significant) exception to this rule is when there is an established physician-patient relationship. Most, if not all, states have patient abandonment laws that protect patients from being left in the lurch by their doctors. Once a physician-patient relationship has been established, the physician has an obligation not to abandon the patient, even if the patient is unable to pay. This does not mean that you can never terminate the physician-patient relationship — but there are certain rules that should be followed to avoid legal liability.
While a patient is free to terminate the relationship at-will (i.e., at any time and without notice), a doctor typically must give a patient adequate notice that the provider intends to terminate the relationship. This gives the patient sufficient time to find a new physician. This is a patient-centered standard and the ultimate question is whether the patient reasonably could have found alternative care in the time allowed. For instance, some states require 30 days’ notice. When providing notice, physicians generally should provide the patient with recommendations or resources to help the patient locate another provider, especially where the basis for terminating the relationship is loss of insurance coverage or other financial hardship. This does not necessarily mean providing the specific names of other providers, but you may refer the patient to public or charitable resources or your state medical society. As always, make sure to accurately document the process used in terminating the relationship, just in case any issues arise.
You should not terminate the relationship when the patient is in an unstable condition. This means that you should not terminate treatment when there is still a need for continuous care unless the patient can be immediately transferred to another physician without interrupting the course of care. A physician generally cannot simply refuse continuing treatment for an unstable patient just because of a failure to pay — this is abandonment. Once the patient is stable and the above procedures are followed, the physician-patient relationship can be terminated.
Q: Am I ethically required to treat a patient who has lost their insurance coverage?
A: No, but you should follow ethical guidelines when terminating the relationship.
The ethical standard for terminating a physician-patient relationship is similar to the legal requirements. Under the American Medical Association (AMA) Code of Ethics, a physician shall “be free to choose whom to serve, with whom to associate, and the environment in which to provide medical care.” Again, while this freedom exists, doctors should be mindful of terminating relationships with existing patients. The American Academy of Dermatology (AAD) Code of Ethics specifically states that “having undertaken the care of a patient, the dermatologist may not neglect or abandon that person.” In order to avoid abandonment, “the dermatologist may discontinue service only after giving adequate notice to the patient so that the patient can secure alternative care.” Patients should expect that their physician will not suddenly stop treating them without giving them sufficient notice and reasonable assistance in making alternative arrangements for care.
In addition, under the AAD Code of Ethics, it is unethical to withhold services that are medically necessary. Therefore, you should not withhold necessary services from a patient unless you have properly terminated the relationship as discussed above. This is similar to, but goes beyond, the requirement that physicians not terminate their relationship with patients who are in an unstable condition.
Under the AMA Code of Ethics, patients are responsible for meeting their financial responsibilities with regard to medical care and discussing financial hardships with their physicians. It is important, therefore, before terminating a patient relationship, to have a conversation with the patient about what loss of coverage means for them — would the patient still be able to afford paying out of pocket for his or her health care or would the patient be entirely unable to afford care?
When considering withdrawing from a relationship, physicians generally must notify the patient long enough in advance to permit the patient to secure another physician and facilitate transfer of care when appropriate. The AAD Code of Ethics states that a dermatologist has the responsibility to assist a patient in obtaining follow-up or alternative care. This may include supporting the transition by asking the patient to sign a release to allow you to make medical records available to their new provider and to discuss the case with the new physician if needed. Again, it is important to document all patient termination procedures.
Q: Does a patient’s loss of insurance coverage change the information that the patient needs to give informed consent?
A: The general rules for informed consent still apply — physicians should be transparent about the costs of treatment and relevant alternatives, as well as the potential costs of forgoing treatment.
Informed consent to treatment is fundamental to both medical ethics and law. In order for consent to be effective, patients should have the opportunity to discuss the benefits, risks, and costs of appropriate treatments and alternatives with their physicians. Patients should be able to expect that their physicians will provide guidance about what the provider considers to be the optimal course of action for the patient based on the physician’s objective, professional judgment.
Patient autonomy is the cornerstone of medical ethics and informed consent. In order to make autonomous decisions, however, patients rely on their physicians to give them the information that they would reasonably want to know to make informed, well-considered decisions about their health care. This includes cost information, especially where the patient is paying out-of-pocket. Above all, be truthful and transparent with patients about the costs of treatments — as well as the costs that could be associated with forgoing treatment. Physicians should also disclose the cost of relevant treatment alternatives. Make sure to record the options that you discuss with patients and note if a particular treatment course is not chosen by the patient because of its cost.
Q: Does the fact that a patient is paying out-of-pocket alter the standard of care I must provide?
A: Absolutely not. You are encouraged to help the patient find an alternative source of care or payment so that the standard of care may still be met despite the patient’s loss of coverage.
The standard of care is determined without regard to cost. However, as noted above, the patient’s choice of treatment option may very well be influenced by cost if he or she is paying out-of-pocket. If the patient’s choice of treatment option itself deviates from the standard of care, the AMA Code of Ethics encourages physicians to assist their patients in obtaining needed care or payment for care through public or charitable programs when patients cannot do so themselves.
Q: Can I offer discounts to patients who lose their insurance coverage?
A: Yes, but physicians should be cautious when offering discounts.
You may also consider reducing fees, waiving fees, or making billing adjustments for your newly uninsured patient — but be cautious. For Medicare and Medicaid patients, it is important to be aware of potential violations of the federal Anti-Kickback Statute or other federal laws. For private-pay patients, most states have their own anti-kickback statutes, fee splitting laws, and other patient-protection statutes that might govern discounts to patients that are intended to induce referrals. However, for the most part, physicians can offer discounts or waive fees for indigent patients, but they must do so based on the individual patient’s financial need and should do so under an established policy with the proper documentation.
Indeed, under the AAD Code of Ethics, dermatologists are encouraged to devote some time and work to providing care for individuals who have no means of paying. You may satisfy this requirement by providing free or discounted care for patients who have lost their insurance coverage, but you should be careful to establish clear guidelines for when such care is provided to protect your practice and to ensure that you are only providing free or discounted care to those who truly need it.
