The patient wanted to pay as a cash pay patient because he did not want any other doctor to do his cataract surgery and he did not want to wait. We were fine with letting the patient pay as a cash pay, but the ASC(who is also out of network) refuses to do the surgery as long as the patient has insurance. That is who told me it was illegal and considered insurance fraud to give a cash pay discount to an insured patient. We were just curious after being told this.
Your initial post left a lot of important info out, so I'm going to revamp my answer. The ASC has every right to question billing practices for the surgeon's who operate in their facility. IF the patient has out of network benefits, the insurance company may or may not have responsibility to pay the claim. You don't mention that the patient is willing to pay the ASC in cash. If they bill on an AOB the surgeon's records/op report can be requested. It will raise a red flag to the insurance company. If you are going to let patient pay in cash, that is fine, paying in cash should NOT move the patient's surgery UP at all. I hope that is not a factor in your office, as that could land you in a lot of trouble with that alone. I would have to really ask WHY the patient doesn't want the insurance billed? If they have insurance and they pay their out of pocket up front, great. Since the ASC is refusing, I'm thinking that the patient may have out of network benefits to which they can bill and I'm guessing the patient hasn't offered to pay them up front. Don't forget your dealing with a surgical procedure to which you really can't guess costs for anything extra (problems that might arise).
There's a few fine lines here, but the bottom line is that the ASC does indeed have right to question billing practices if they are billing insurance. And if there are any cash discounts being made they must be reflected IN all the billing done to the insurance carrier.