Many questions I receive at chiropractic speaking events, in private coaching sessions and from the profession in general revolve around fees.
In fact, if I had to pick the top 3 “most popular” chiropractic fee questions, it would be some variation of…
- How much can I charge for…?
- What kind of fee discount can I give…?
- Is it legal to charge ___ patients, a ___ fee?
Basically, chiropractors (and their staff) 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. A few years ago, I wrote a post entitled, Top 10 Chiropractic Fee Questions: How Much Can I Charge For…? which continues to be one of our most popular posts, so I thought I might be a good time to update this and add a few more questions we frequently get.
While there may be some variation state to state, here are the most common FAQs on chiropractic fees (and their answers, of course):
Q1. Can I charge different fees for different types of patients?
A. In general, the answer is “no.” Your fee for the same service should be the same regardless of payer type. 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, there are generally three permissible ways to discount your fees:
i) One type of discount that is allowed in every state (and even by most payers) is a reduced fee due to a financial hardship. However, in order to give a financial hardship discount properly, you should have your hardship policy in writing and you should clearly define the criteria of the policy. Unfortunately, many chiropractors offer hardship discounts, but few protect themselves by doing it correctly.
ii) Some states permit some sort of “time of service” (TOS) discount as an additional method of legitimately discounting your fee. There are many problems with this method and chiropractors can get into hot water quickly by doing this incorrectly. The chief obstacle to using a compliant time of service discount is the fact that most states do not have anything in writing that spells out what amount of TOS is acceptable. So, for example, if your state says, a 10% time of service (or bookkeeping discount is acceptable, then it’s pretty clear what you can and cannot do). However, since most chiropractors practice in a state that has nothing in writing about fee discounts, you are guessing (and gambling) as to whether yours is acceptable of not. Consequently, the TOS discount is probably the most used (and abused) method of dangerously applying a discount in chiropractic.
iii) A third method of applying a discount to your fees is by utilizing a Discount Medical Plan Organization (DMPO). These organizations are allowable in most states and basically work in a similar manner to joining an insurance network. For example, when you are a provider with insurance, you essentially agree to accept their allowable fee, even though your fee may be higher. The DMPO works similarly, but the aim is to benefit your patients. They join the DMPO (of which you are also a member) and this allows them to access a discounted fee schedule. How is this legal, you ask? Simple: in the same way that each insurance company pays different allowable amounts for their services, you are essentially creating your own network, with accompanying fee schedule, for your patients; and just as different payers have different allowables, different providers inside the DMPO may have different fee schedules. Since they join the network (generally by paying a fee), they get to access your fee schedule and your discounts. In chiropractic, the best example of a DMPO is ChiroHealthUSA.
Q3. Are pre-pay plans legal?
A. Most states allow some form of pre-pay plans but the legalities vary widely from state to state. For example, some states require you to disclose your pre-pay and refund terms in writing. In other states, it is legal to offer pre-pay plans as long as you fully refund the patient’s money upon request. Still other states allow a pro-rated refund, as long as the patient has been informed of such. And a few states require you to 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.
Q4: Can I offer a “Senior discount” to my Medicare patients?
A: Medicare is very specific about how much of a discount you can offer without violating their “inducements” or “enticement” policies. In fact, in 2017, Medicare updated their rule for how much care you can give away. You may now offer a discount your Medicare patients of no more than $15 per incident or $75 aggregate annually. In other words, your “senior discount” cannot reduce the fee any more than $15 at a time. And you may not extend this discount more than 5x per year (else you exceed the $75 annual limit).
Q5. 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.
Q6: 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. As stated above, you may be able to offer a TOS discount, bookkeeping discount or prompt-pay, or self-pay discount (all different ways of saying the same thing). However, as I pointed out previously, the question of how much discount is too much is the subject of much rumor and fuzzy logic. And if your discount is considered too steep by your state board, you will be in trouble.
Q7. 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.
Q8. 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.
Q9: 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!
Q10. Can I offer discounts to various groups, such as military, clergy, students, etc?
A. Be careful here. If you decide that uninsured members of the clergy or military personnel or students are part of your hardship discounts, then you may be safe in offering that discount to all members of those groups, provided you follow hardship guidelines properly. However, it’s also important to construct your hardship agreements so that they target those truly in need, while they are in need. Case in point, one of the “missing” items I see in many hardship agreements is a timeframe. For example, if you offer a hardship to an unemployed father of four based on their financial criteria, that may be acceptable. But be sure to create an “expiration date” so that when dad lands a $150k per year job, you don’t look foolish for offering a hardship discount.
Q11: 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 geographic al area than that. So, setting your fees by calling neighboring DC’s is somewhat silly. Set your fees according to regional standards, 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.
Q12: Do I need to document free or discounted services differently?
A: Not necessarily. You will be held to the same standards of care and documentation by your state board, regardless of what you have charged. In that respect, it’s important to remember that documenting everything you do is the best way to protect yourself, as it’s just as possible for a patient to get hurt or sue you over a free or discounted service, as it is for a service for which they paid.