When I lecture on chiropractic billing, coding and documentation, I always get asked questions on fees. Doctors want to know how much they can charge, how much they can discount and what types of discounts, fee systems and plans are legal or not. Obviously, states differ in their opinions on some of these items, but here is my “top ten” list of FAQs on fees:
Q1. Can I charge different fees for different types of patients?
A. In general, the answer is “no”. In most states, the law prohibits you from “dual fee” schedules or charging higher fees to insurance payers, even though the cost of billing to insurance carriers is certainly more.
Q2. Is there a “legal” way to offer patients discounts off of my regular fee?
A. As above, you should have one “regular fee.” However, most states do permit some sort of “time of service” (TOS) discount. The other prevailing discount that is allowed in most states is a reduced fee due to a financial hardship.
Q3: How much of a cash discount am I legally allowed to give to my patients?
A: First, strike the word “cash discount” from your vocabulary. You do not have two fees – one for cash and one for insurance. You may, however, offer a TOS discount for prompt payments for services rendered that day. Secondly, the question of how much discount is too much is the subject of much rumor and fuzzy logic. I have yet to run across a state that has a law that specifies exactly how much one may discount their services in the TOS scenario. However, if your discount is considered too steep by your state board, you can certainly be in trouble.
Q4. What about reducing fees for patients who can’t afford care?
A. Believe it or not, most states and most payer contracts permit you to offer a hardship discount on an individual basis to your patients. Generally, this requires written documentation of what constitutes your hardship criteria, but there is no universally accepted determination of such criteria. However, on the flip side, if you deem that every one of your patients (or even every non-insurance patient) is a hardship, your “criteria” would be suspect.
Q5. Are pre-pay plans legal?
A. In general, most states allow some form of pre-pay plans but the legalities vary widely from state to state. In some states, it is legal to offer pre-pay plans as long as you fully refund the patient’s money upon request. Other states allow a pro-rated refund, as long as the patient has been informed of such. Still others demand that you keep pre-pay funds in an escrow account until they are all used up and that you offer a refund plus interest if the patient cuts their care short.
Q6. Can I offer family plans or discounts for families?
A. Family plans and other payment options that are unlimited in treatment visits are dangerous in two aspects. If you are offering unlimited care at a fixed fee, many states view this as an insurance product since you are accepting the risk of your being able to provide ongoing unlimited treatment for your set fee. Even if this option is legal in your state, family plans can also be a bad deal for the doctor who offers anything other than basic adjustments. For example, a family of 4 paying $200/mo for unlimited care may get 4 adjustments in a month which gives the doctor an average of $50/visit. If the family comes in more, the average fee goes down. If they get additional services (exams, xrays, modalities, rehab, massage, etc) the fee goes down even more.
Q7. Can I offer “free” services to patients, but bill the insurance carrier?
A. You can’t have your cake and eat it too. “Free” is free. If it is offered to patients at no charge, then don’t bill the insurance.
Q8: Can my patients pay me cash/TOS discount and then have their insurance billed so they can be reimbursed?
A: Remember, that one of the reasons TOS patients receive a discount is that your paperwork in reduced in exchange for that discount. If you turn around and bill the insurance, what have you gained? Secondly, if you do decide to bill the insurance on your patient’s behalf, do not bill your regular fee, but your bill must reflect the TOS discount. This is the correct way to do this and, on the odd chance, the insurance reimburses well, you don’t want your patients making money on the visit!
Q9. Can I offer discounts to various groups, such as military, clergy, seniors, etc?
A. Be careful here. If you deem uninsured members of the clergy or military personnel to be part of your hardship discounts, then you may be safe in offering that discount to all members of those professions. However, seniors who have Medicare represent a different group, as Medicare has specific provisions prohibiting “inducements” or enticements you may offer Medicare patients to come to your office. In general, you are prohibited from offering Medicare patients more than $10 per incident, or $50 aggregate annually. If your fee discounts exceed these amounts, you may be violating Medicare regulations and subject to penalties.
Q10: How are UCR fees determined?
A: Most payers use a proprietary blend of fee schedules to come up with the Usual and Customary Fees (UCR) that they will quote. Some payers will actually give you the source for these fees but many will not. In some states, fees are based on your Worker’s Compensation fee schedule. No matter what the route payers may choose, you should understand that all insurance fees are regional, as opposed to local or national. In other words, it really doesn’t matter much what the DC down the street charges, as your regional fees likely are comprised of a much greater geographical area than that. So, setting your fees by calling neighboring DC’s is somewhat silly. Set your fees according to regional standards (as available in fee product software such as ChiroCode), according to what your highest payers reimburse or according to state standards (such as Work Comp fee schedules). On the other hand, if you are practicing in Arizona, it also matters little what your cousin Lou is charging in New Jersey, as fees are not nationally based either.