A world without reimbursements?
A discussion about cash-only and cash-discount practices
By Linda Segall

Imagine a world without insurance forms: Patients check in; you treat them; they pay cash; they leave. Pay and go. And the transaction is done.

No hassles of filling out and submitting insurance claims, following up on them, and (sometimes) hiring an attorney to get what is owed to you.

A growing number of practitioners are going “cash only.” According to this year’s Fees & Reimbursements Survey, 15 percent of respondents have cash-only practices, up from 6.4 percent in 2004.

Going “cold turkey” to a cash-only practice may be too drastic for some practitioners, but cash has its allure, nevertheless, and more than one-third of practitioners offer a discount when patients pay upfront. In 2006, 35.6 percent of respondents said they offer a discount for cash payment. This year, 38.7 percent said they discount their fees for cash payment.

But if you are considering joining the ranks of cash-only practices or those offering discounts for cash, pay heed to the advice of those who understand the legalities of payments.

Chiropractic Economics talked with several experts about cash practices and discounts for cash payments. Our experts include coding experts Kathy Mills Chang (www.kathymillschang.com), D. Henry Leavitt (ChiroCode Institute, www.chirocode.com), Michael Miscoe (Practice Masters, Inc., www.pmrcodingexperts.com), and health attorney Deborah Green, Esq. (healthattorney@aol.com).

We asked them several questions about “going cash.”

What is a true cash practice?

Miscoe: A true cash practice is one that renders only noncovered services, such as wellness or maintenance care (palliative, preventive, elective, or corrective care). These practices should represent services using S8990 (physical or manipulative therapy performed for maintenance rather than restoration), which carriers are not likely to pay. As a result, they can charge whatever they want on a case-by-case basis, since reimbursement will not be made under this code.

Any practice that renders a medically necessary service (as defined by the carrier), collects cash from the patient, but sends a bill or provides the information from which a bill is sent, not only has post-payment liability for the representations made regarding the service performed and the necessity of that service, but is, in essence, an insurance practice.

Since DCs cannot opt out of Medicare, even nonpar providers retain the obligation to bill Medicare for covered services (medically necessary manipulation).

Mills Chang: A 100 percent cash practice means patients pay at the time of service 100 percent of the time. I think this is unrealistic.

Do cash-only practices have to process insurance forms?

Leavitt: Every office should complete (at a minimum) the 1500-claim as a receipt for the patient.

Is it legal to give a cash discount?

Leavitt: Of course it is legal — unless some specific state law would impose limitations.

Mills Chang: Legality is particular to the state. I think the issue is this: Can you legally charge $75 for an adjustment for personal injury or insurance payer-class and then charge $30 for a cash-payer class?

That answer is “no!” You can get around this with time-of-service discounts, but only if you are collecting at the time of service and are offering the same thing to all your patients — PI, insurance, etc. Many states have clear rules about what the discount can be. Consult your state board about this.

Miscoe: Cash discounts generally become an issue in mixed practices — practices that deal with insured as well as uninsured (cash) patients and render at least some services covered by insurance.
Time-of-service discounts raise duplicate-fee schedule issues. If the uninsured (cash) patient and the insured patient are receiving the same service — and that service is medically necessary — the issue is whether it is appropriate for the provider to reduce the fee for the uninsured patient to induce payment at time of service.

Carriers do not have the ability to take advantage of such discounts.

Charging for maintenance care is a different story, however. Maintenance services, represented using the HCPCS Level II code S8990, can be different from those submitted to an insurance carrier for medically necessary services, since the services are different. The key is that the fee and code are predicated based on the necessity of care, not whether the patient has insurance or not.

But if two patients present with similar injuries and the services are necessary, they should be charged the same codes and pay the same amount.

Green: If you are dealing with cash only, do whatever you like. But remember: You may legally give a discount only if you give the same discount to the insurance company.

For example: The service provided is usually billed at $100. The insurance company pays 80 percent ($80) and the patient pays 20 percent ($20).

If you give the patient a 25 percent discount, the patient would then pay you $15. But you must advise the insurance company of the 25 percent discount and bill the insurance company only $60, which represents a 25 percent discount from your regular bill. To do other-wise would be a waiver of the co-pay and/or deductible and is illegal.

How can a practice avoid problems?

Leavitt: Make your policies plain and simple and follow your own rules.

Mills Chang: Offer time-of-service discounts to all patients — including insurance and PI patients. If they have insurance, they can bill the company on their own, at the reduced rate.

Green: If you are part of a plan, check your contracts to find out what you have agreed to do or agreed not to do.

Linda Segall is editor-in-chief of Chiropractic Economics magazine. She can be reached at lsegall@chiroeco.com.

Disclaimer: Answers provided are for educational purposes only and are not to be construed as legal advice. Please consult an attorney versed in healthcare law to discuss your particular situation.