Is It Legal to Waive Deductibles and Copayments?

Q. Another dentist in our area tells patients that he will do their dentistry for what the insurance company pays. In other words, he does not require patients to pay their copayments. I've always thought that this is against the law, but when I ask other offices, I am often told that it is okay. Is it legal to write off the patient’s portion?

A. Generally speaking, dentists cannot accept payments from third party payers as payment in full when a copayment is contractually required by the patient’s dental plan. The American Dental Association’s Code of Ethics (5.B.1) states: “A dentist who accepts a third party payment under a copayment plan as payment in full without disclosing to the third party that the patient’s payment portion will not be collected is engaged 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.”

Patients accept responsibility to pay the copayment by signing the claim form, "I agree to be responsible for all charges for dental services and materials not paid y my dental benefit plan, unless prohibited by law, or the treating dentist or dental practice has a contractual agreement with my plan prohibiting all or a portion of such charges."

When asking dental teams why they think it is okay to forgive deductibles and copayments, I often hear comments such as the following:

“Our office manual states that waiving the copayment is an employee benefit for employees whose spouses have dental insurance.”

“It’s okay to waive copayments for anyone since the dentist owns the practice and can make that business decision.”

“As an employee, we receive a bonus equal to the copayment so we don’t have to pay.”

Many states have laws that prohibit the forgiveness of copayments. However, each dental practice should check its own state law prior to drawing any final conclusion regarding this issue. All state dental boards post a copy of their dental practice laws on the internet (see table on page 4). As an example, in the state of Washington, “It is against the laws of the state of Washington (RCW 18.32.533[5.B.1]) and considered ‘unprofessional conduct’ for a dentist to abrogate [waive] the copayment provision of a contract by accepting the payment received from a third party payer as full payment.” Likewise, the state of Oregon (OAR 818-012-0030) considers it to be “unprofessional conduct” for a dentist to “attempt to obtain a fee by fraud or misrepresentation.”

John J. Greaney—an attorney in Kent, Washington, specializing in malpractice defense, disciplinary investigations, criminal defense, and Medicaid fraud defense—offered a quick answer, “The status of the patient (i.e., family, friend, employee, etc.) does not change the dentist’s obligation to follow the law.”

Cathy Reunanen, a risk management consultant with NORDIC (a liability and malpractice insurer), also gave an answer that was short and to the point, “It is not legal to forgive copayments.” Reunanen cautions dentists to be careful about extending professional courtesies because forgiveness of coinsurance or copayments is also forbidden by many managed care/insurance contracts. In addition, the routine waiver of Medicare deductibles and/or coinsurance is prohibited by federal law.

Wendy Wils, Senior Associate General Counsel of Legal Affairs for the American Dental Association, agrees that each dental practice must be familiar with its own state laws. Wils noted that there are a few states that do allow the forgiveness of copayments, but the vast majority do not since the contract is between the patient’s employer and the insurance company.

Wils also points out that the ADA’s Code of Ethics includes the statement “without disclosing to the third party that the patient’s portion will not be collected.” This means that a dentist can forgive a copayment as long as he/she alerts the insurance company that he/she will not be collecting the copayment. It is then up to the dental plan to decide if it will accept this, ecalculate the claim and pay a lower amount, require the patient to pay the copayment, or refuse payment.

Carriers vary in how they handle the forgiveness of copayments. Some practices report that when they inform the patient’s dental plan in the remarks section of the dental claim form that they do not intend to collect the patient’s copayment, many carriers do nothing and pay the claim as submitted. However, some carriers pay nothing when they learn that the practice does not intend to collect the patient’s portion.


The bottom line is that each dental practice should check its state laws and participating provider contracts to understand its obligation for collecting deductibles and copayments. If questions still exist, contact your malpractice carrier. It is in its best interest to provide you with accurate guidance so you are never accused of overbilling or fraudulent billing practices.