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.
It really isn't illegal