Practice Management Alert

An occasional discount for a physician's elderly mother or a single parent scraping for money seems like a generous practice policy, but if you don't follow the rules, discounts can put your practice in hot water with your contract payers or even with federal regulators. But you don't have to be a miserly office to satisfy regulations. You can legally offer discounts for services if you heed government and contract stipulations. Offering patient discounts can actually benefit Medicare carriers and private payers, so they're not entirely unwarranted, as long as you abide by the rules. Discounts for Cash Payment: The most common reason to appropriately discount patients is when they pay in cash, says Bill Sarraille, an attorney at Arent Fox Kintner Plotkin & Kahn in Washington, D.C. Discounts for cash payment accurately reflect the office's reduced costs no claim submissions, follow-ups or disputes, he says. You can issue these discounts for cash payment if you avoid situations that lead to compliance questionability, Sarraille says. If you give discounts to uninsured patients, avoid pushing the OIG's buttons: Don't routinely discount the uninsured patients below the Medicare allowable. If you offer discounts below the allowable for more than 50 percent of your services, you risk violating the OIG provision against routinely charging Medicare substantially more than you charge other payers, Sarraille warns.

Don't price discounts below the Medicare allowable for Medicare beneficiaries unless you note the reduced charge on your claim, Sarraille says. When you charge the Medicare patient below the allowable, it no longer applies, and if you don't note this change, your claim will be false. Medicare may penalize you when the practice receives a payment based on the higher fee schedule and not the lower actual charge "meaning that the practice will receive an overpayment," explains a recent alert from Sarraille's law firm. You may have to return the overpayment, or you may even face charges. Make sure your discounts don't look like waivers of copayments or deductibles in whole, or in part, Sarraille says. The feds might smell lurking incentives that violate antikickback laws prohibiting you from offering discounts that induce the purchase of services Medicare pays for. Out-of-Network-Penalty Relief: Honesty is the best policy for allotting discounts as an out-of-network provider. Come clean when you eliminate the out-of-network penalties that patients incur by consulting an out-of-network provider. "You want to somehow alert the payer to what the situation is" so the payer can decide payment on your actual charges, Sarraille says. In doing so, you have not "pulled the wool over their eyes in any way," he says. Third-party commercial payers voice complaints when you help their clients and not them with this cost of service. [...]