General Category > General Questions
"Time of Service" Discounts?
Christy:
What's the deal with "time of service" discounts?
For example, a psychologist bills her cash patients $50 and for the same service to another patient, bills insurance $100? Then, the individual insurance carriers break it down to their contracted fee.
Many providers have similar cash dicounts, but what is the legality of it all?
thanks!
PMRNC:
It really isn't illegal as long as the cash patient is not billing a diff rate to an insurance carrier. I've seen providers who provide this discount and then give patient a superbill with the regular contracted rates to which they submit and get MORE back. THAT is illegal on both provider and patient's part. Providers can indeed give a cash discount, they just have to show it on the bill as a courtesy cash payment and they also have to adhere to ONE policy in their office financial policy. For example they can't just charge Mrs. Smith $50 (no insurance, cash pay) and then charge Mr. Black $40 (also no insurance cash pay) ONE policy for all cash pay discounts.
RichardP:
... they also have to adhere to ONE policy in their office financial policy.
It is not clear whether this statement refers to the percentage discount the doctor gives, or whether it refers to the cash price for a particular procedure.
Is this a Federal requirement? State requirement? Requirement of individual insurance carriers, based on the doctor's contract with them? If doctor is a non-participating provider, he can charge any amount he wants. What the patient bills their insurance is of no concern to the doctor. That is, I think the answer to the original question is more along the lines of "it depends" - on whether the doctor is a non-participating provider, and what his contract is with the insurance carrier if he is a participating provider.
[Edit] I'm thinking that, if a doctor is a non-participating provider, the insurance carrier cannot regulate what he charges or what discounts he gives. And if a doctor is a participating provider, I'm thinking that cash discounts would be regulated very heavily by the insurance carrier.
A link or reference to a regulation or insurance carrier requirement on this issue would be useful.
PMRNC:
--- Quote ---... they also have to adhere to ONE policy in their office financial policy.
It is not clear whether this statement refers to the percentage discount the doctor gives, or whether it refers to the cash price for a particular procedure.
Is this a Federal requirement? State requirement? Requirement of individual insurance carriers, based on the doctor's contract with them? If doctor is a non-participating provider, he can charge any amount he wants. What the patient bills their insurance is of no concern to the doctor. That is, I think the answer to the original question is more along the lines of "it depends" - on whether the doctor is a non-participating provider, and what his contract is with the insurance carrier if he is a participating provider.
[Edit] I'm thinking that, if a doctor is a non-participating provider, the insurance carrier cannot regulate what he charges or what discounts he gives. And if a doctor is a participating provider, I'm thinking that cash discounts would be regulated very heavily by the insurance carrier.
A link or reference to a regulation or insurance carrier requirement on this issue would be useful.
--- End quote ---
Again, I'm just one of those stubborn people who live by "better safe than sorry" so no I don't have a link or reference. I do know that if an office has a financial policy in their office (AS THEY SHOULD) swaying from that policy because maybe they like one patient over another is flat out unethical, not sure of law, but it being unethical would be enough for the doctor to get himself into some hot water. NOW what I did not mention, that's worth mentioning is that a case by case discount can be done ethically with a hardship case. This is why we have our providers HAVE financial office policies, so there are no questions. If I get such a question from my clients my FIRST plan of action is to consult his office financial policy. If it's done right it will HAVE a policy on what to do with patients who might need an "extra" break or discount. Insurance or not it's just ethical to have ONE policy in place and then you don't HAVE an issue of favoritism. I deal with pediatricians and believe me patient's talk.. MOMS will def talk about their pediatricians and I've seen problems where Mrs Jones got upset because Mrs. Smith was getting a better discount. Not a good situation. So that's why I don't bother with legal references. It's not ethical period.
RichardP:
I was just wondering - becausemy clients generally stick to a consistent percentage discount. But they don't hesitatate to vary from that when the patients circumtances call for it. But that is generally only when they are not PPO for the patient's insurance.
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