COVID Surcharges: What Are They? Should I Charge One?

The COVID-19 pandemic has forced healthcare practices to adopt new policies and procedures to protect patients and staff and mitigate the spread. But who should pay the costs for these safety measures?

COVID-19 N95 mask laying outside.

Over the course of the pandemic, businesses have had to implement new policies and procedures that require extended effort and supplies. Many have had to train employees to perform pre-visit screenings and conduct temperature checks. They’ve also invested in greater amounts of PPE and more extensive cleaning measures.

The result? COVID surcharges have popped up everywhere in the past year—from hair salons to restaurants to medical offices. Typically seen by consumers in the form of an extra fee tacked to the end of their bill, charges have ranged from a few extra dollars in the salon to hundreds in a nursing home. 

With the extra costs and time necessitated by new safety measures, adding a “COVID fee” to a patient’s bill might seem like an easy way to make up for losses. But are these surcharges legal? Are they a bad business practice?

The States’ Responses to COVID Surcharges

Because the concept of a “COVID surcharge” is rather new, it’s not clear just how widespread the practice has become. Still, the use of COVID-related fees (and subsequent complaints) has state consumer protection offices buzzing. 

Some states have issued guidance warning their residents of such fees, while others have remained silent on the matter. New York state even required its health insurers to issue refunds for extra COVID-related charges to patients.

A key to many of these consumer protection problems is disclosure—being upfront and transparent about extra charges is less likely to bring about complaints. Even so, if the fee doesn’t seem reasonable or proportional to the extra services being provided, it could implicate state price gouging or professional laws. Overall, businesses should consider state regulations and guidelines before implementing any fees. A reasonably-priced and transparent fee may be okay in one place but not in another.

Insurance and COVID Surcharges

Moreover, the question of who pays these extra costs raises more concerns. The American Medical Association (AMA) attempted to provide relief for providers wanting to impose these charges and bill insurance. Late last year, the AMA called for a new billing code that would allow providers to bill for extra supplies and staff time associated with COVID-safe procedures.

CMS, however, has so far declined to offer the extra reimbursement that this code provides for. Instead, CMS argues that payment for these sorts of services has already been bundled in with existing billing services. As a result, insurance coverage of COVID-related surcharge fees is spotty.

Patient Reactions to COVID Surcharges

When insurance isn’t footing the cost, these extra charges might be an unexpected and unwelcome addition to a patient’s bill. And in a time when medical care has moved to the forefront of the national conversation, patients might react angrily to having to pay even more to receive their medical care, leading to complaints. Therefore, while many places have not expressly prohibited these types of fees for now, a COVID surcharge that places increased costs on the patient might not be the best business practice to impose.

Perhaps a tempting fix for rising operating costs, the use of a COVID surcharge fee comes with significant considerations. As guidance from states continues to evolve, new legal concerns may arise. Moreover, patients dislike extra fees, even transparent and reasonable ones. An experienced attorney can help you consider what is best for your practice.

The COVID-19 pandemic is a dynamic and evolving public health emergency. The laws and situation are fluid, and this article may not reflect the most current situation.

This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.

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