Recently, an issue arose dealing with a practice’s ability to offer a discount exclusively to self-pay patients. Following the old educational philosophy that if one person has the question then the odds are that others do as well, I am addressing that matter here.
Generally speaking, there is no prohibition against a physician discounting a fee for a self-paying patient (that is, a patient who pays out-of-pocket and is not covered by a health plan, including Medicare or Medicaid). A practice can always offer purely self-pay patients a discount, and many do, otherwise the self-pay patient is stuck being charged the full fee schedule amount, while insured patients benefit from contractual write-offs which adjust the practice’s charge down to the contractual allowable.
Where a practice can run into issues is when it offers discounts to patients who have insurance coverage – most especially when that practice is participating with the carrier. When a practice is participating with a carrier, then part of the provider participation agreement addresses the fact that the provider agrees to collect all co-payments, file all charges, and collect all deductibles and co-insurance from the patient in exchange for being treated as in-network/participating. By offering discounts to patients with coverage, the practice is not adhering to its contractual obligations. NOTE that a “professional courtesy” and/or “insurance only billing” is the same as a discount – the patient is receiving a benefit (excused from payment obligation) that runs afoul of the provider’s contractual obligations (and in the latter case, runs afoul of federally recognized compliance guidelines).*
*Please note that since this article was written, the Omnibus Rule has had some impact on this, in that a patient can request that a provider NOT submit a claim to his/her insurance carrier, and that request MUST be accommodated. Such requests, legitimized by the Omnibus Rule, trump the contractual obligation of a provider to submit a claim pursuant to a participation agreement.
Furthermore, regardless of a practice’s participation status with commercial carriers, if the practice is a Medicare provider, then it must not discount below the fee charged to Medicare – and most especially, the Medicare allowable, as Medicare law prohibits you from submitting Medicare claims that contain charges substantially in excess of your usual charges. If the discounts consistently dipped below the billed fees, then Medicare would deem that new lower price to be the practice’s standard/customary fee. If this fee is below the Medicare allowable, then the practice would be leaving money on the table that otherwise could have been collectable!
As always, if your practice has any questions, please do not hesitate to contact us!