by Richard D. Weber, J.D.
MDA Legal Counsel
Published in the July/August 1996 issue of the Journal
Question: Is it illegal for a dentist to waive or discount a patient co-pay under an insurance policy after the insurance company has paid its portion?
Answer: The Michigan Health Care False Claim Act makes it illegal for a person to make a claim that person knows to be false for benefits to a health care corporation or insurer. The act defines "false" to mean wholly or partially untrue or deceptive. It defines "deceptive" to mean making a claim to a health care corporation or health care insurer that contains a statement of fact or that fails to reveal a material fact, and that leads the health care corporation or insurer to believe the represented or suggested state of affairs to be other than it actually is.
Waiving or discounting a patient co-pay without disclosing this fact fits within the definition of a false claim under the Health Care False Claim Act. The dentist has failed to reveal the material fact that he did not charge the patient as much for his services as he represented to the insurance company. Therefore. the claim was "deceptive" and "false" under the act. Although there are no appellate court decisions interpreting the act in this factual context, the practice of waiving or discounting the patient's co-pay without disclosure to the insurer would likely be deemed a violation of Michigan law.
An American Dental Association advisory opinion declares this practice to be unethical, and states, "A dentist who accepts a third party payment under a co-payment plan as payment in full without disclosing to the third party that the patient's payment portion will not be collected, is engaging in overbilling. The essence of this ethical impropriety is deception and misrepresentation; an overbilling dentist makes it appear to the third party that the charge to the patient for services rendered is higher than it actually is.
Question: In our office we see many handicapped/underprivileged/ psychiatric patients. The homes/caregivers/nonguardians bring these patients to our office. For whatever reason, the guardians/ parents do not have contact with these patients. Hence, who should be responsible when a signature is needed on a health history, consent or other necessary form?
Answer: Most people have the legal capacity to make most decisions for themselves. This is true of patients and their ability to consent to treatment and to the release of their patient records to third parties, and their ability to contract for dental services. Simply because a patient is handicapped, underprivileged or a psychiatric patient does not mean that this patient does not have the legal capacity to make legal decisions or sign legal consents. There are, however, two groups of people who cannot sign consents for themselves: minors and incompetent persons.
Minors are defined as children under the age of 18. With the exception of the few minors who have been legally "emancipated," or granted independence from their parents or guardian, a minor cannot independently consent to dental treatment. Minors are also incapable of entering into binding contracts, such as agreements to pay for dental services. These disabilities are also applicable to a person who has been declared to be legally incompetent. People are legally incompetent when they have been determined to be incompetent as the result of a legal proceeding designed for that purpose.
Minors and incompetent persons must have a person who is legally responsible for them and can make decisions and sign consents on their behalf. In the case of a minor, this person must either be a parent or a guardian. An incompetent person must have a guardian appointed to make such decisions. In situations where a patient's consent and signature would be legally required, the dentist must obtain the consent and signature of the parent or guardian on behalf of a minor or a mentally incompetent person. Not obtaining consent from a parent or guardian in this situation is equivalent to not obtaining the consent of the patient.