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Discounting Fees for Self-Pay Patients

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Recently, you had a question about discounting fees for private-pay patients, and you stated you could do that. I just talked to a Medicare consultant who used to work for Medicare, and he stated what we had always been told: If Medicare or any other insurance company found out, they would state that the discounted fee would actually be your “usual and customary” fee, and you could face fines from Medicare for doing so. Could you clarify your answer?

Question: Recently, you had a question about discounting fees for private-pay patients, and you stated you could do that. I just talked to a Medicare consultant who used to work for Medicare, and he stated what we had always been told: If Medicare or any other insurance company found out, they would state that the discounted fee would actually be your “usual and customary” fee, and you could face fines from Medicare for doing so. Could you clarify your answer?

Answer: Sure. For one thing, you need not drop your price below Medicare’s price (or that of commercial payers) but you can still offer a discount from your fee schedule. In that case, if Medicare wanted to pay what your uninsured patients pay, great.

For another, you set a very detailed, written guideline for when the discount can be offered - if the patient is uninsured and pays in full at the time of service, for example. This might be, what, 20 percent of your patients? That’s not usual and customary. You have legitimate cost savings when you don’t have to bill and get more for your money when it arrives on the day of service.

Certainly, there is some gray here. But there is also a lot of hocus pocus that doesn’t stand up to scrutiny. I’d love to see Medicare publicly defend a policy that says uninsured patients should pay four times as much as Medicare does.

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