Practice Management Alert

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Question: May I give discounts to patients who pay at the time of service? Can I give a discount if they pay in cash, as opposed to a credit card or check? How much of a discount for such prompt payment is allowed? Wyoming Subscriber Answer: If you give a discount to one patient, you must give it to all patients. Otherwise, you are treating patients differently, ergo discriminating against a group of patients. When you offer a discount, you alter your charge from the established amount to the discounted amount. For example, if you charge $100 for an office visit and give a 20 percent discount for paying in cash up front, your service charge is really $80. Medicare considers charging various amounts for the same service fraud. Therefore, if your price for a service is $100, you must charge $100 regardless of what type of patient receives it. Some experts say that to avoid the appearance of fraudulent billing and illegal kickbacks to patients, you should avoid discounts of any kind. Other experts say that although you should not reduce or discount your charges, you could consider entering into a contract with a patient to accept a reduced payment. For example, a patient presents for the $100 office visit, but can pay only $80. The patient asks whether the doctor will accept that amount. The physician can agree, take the payment and record the contract in the patient's chart. The note should state that the physician entered into a contract with the patient to accept a reduction in the fee for immediate payment. Both parties must sign the statement. In such a case, accepting a reduced payment is not the same as reducing charges. Medicare rules require beneficiaries to pay deductibles and coinsurance, and providers must make reasonable efforts to collect them. The requirement can be waived only upon proof of financial hardship, which the patient must prove by providing statements of income, assets and basic living expenses. Practices should also request copies of income tax returns and W-2 and 1099 forms to see whether the patient's earnings meet state and federal poverty guidelines. If the patient proves financial hardship, the provider can write off the amount of the bill that's owed. Copies of the proof supplied by the patient should be placed in the patient's file. The physician should write in the medical record that the charge for that particular date of service is being written off due to proof of financial hardship, which is in the patient's file. The patient and the physician should also sign a [...]