The good, the bad and the illegal regarding compliant discounting and a chiropractic discount plan
Nothing stirs up emotions in a conversation quite like the wildly debated topic of offering discounts in your chiropractic office. My team and I have all been challenged, and even yelled at, when answering a question about a chiropractic discount plan, especially when the answer wasn’t exactly what the doctor or chiropractic assistant (CA) wanted to hear.
It’s OK if you are confused about what you can and can’t do about offering discounts in your practice. Although it seems counter-intuitive, the rules and regulations were apparently not written to provide clarity, just confusion. Why?
Because the rules and regulations surrounding discounts are dictated not by one entity, but by just about every entity in our practice. This includes our boards of examiners, our provider agreements, state and federal rules on anti-kickback and anti-inducement, Medicare, and ultimately, the Office of Inspector General (OIG).
The truth is that you can offer discounts in your office, but there are limitations.
Mary is 32 and a new patient. After her initial exam, her chiropractor recommends 12 visits. During the financial report of findings, Mary is informed that she has a high-deductible plan and will be responsible for paying out-of-pocket for all 12 visits. The office offers Mary a 15% discount on the total cost of her care if she signs up for an auto-debit plan today and spreads the payments over the next 90 days.
The 15% discount offered to Mary is a good discount, provided that discount is not applied to her deductible or co-payment. The OIG has provided broad guidance in the area of time-of-service discounts. In Advisory Opinion 08-03, posted on Feb. 8, 2008, the OIG opined that a 5-15% discount was reasonable for a particular hospital.
There were some caveats, such as not advertising the chiropractic discount plan. However, when a third-party payer is involved, this discount must also be passed on to them. In Mary’s case, she must meet her high deductible before insurance provides coverage for her chiropractic care and is, for all practical purposes, a self-pay patient in this example.
My personal experience, and why I am committed to educating the profession on compliant discounting, comes from my worst day in practice.
Mrs. Jones and her family had been longtime patients in my office. They had never had insurance, and so I charged them my “cash fee” at each visit. My cash fee was significantly less than the actual fees in my practice; however, I felt justified charging less since I was relieved of the additional burden of filing claims with insurance and waiting for the money to come into the office.
One day Mrs. Jones was in an automobile accident, and I began treating her for those injuries. On her final visit to my office, I walked into the treatment room and in her hand was an EOB (Explanation of Benefits) from the insurance company. She had seen that I had charged them significantly more than I had been charging her and her family for years, and she was furious. She put her finger in my face and said, “Doc, it’s guys like you ripping off insurance companies that prevent my family and me from affording insurance, and by the way, I’ve reported you to the state attorney general.” And then she left, never to return.
While my heart was in the right place, this is an example of a bad chiropractic discount plan. I made the mistake of never telling Mrs. Jones what her actual fees would have normally been and then provided the discount without having a contractual basis to do so.
Illegal chiropractic discount plans
Frequently, I have heard of doctors who routinely offer no-charge services. They feel that by not charging anyone (patient, insurance, Medicare, etc.), they are not violating any rule or regulation. They need to think again.
A doctor in Iowa thought the same thing and began offering electrical stim for no charge to all of his patients. The United States Department of Justice thought differently about it. They alleged that the doctor’s conduct violated the Anti-Kickback Statute, and, in turn, the False Claims Act. The doctor settled his case for nearly $80,000, in addition to his attorney’s fees, during the year-long investigation.
One survey from NORC at the University of Chicago and the West Health Institute published in early 2018 stated that 44% of patients skipped care because of costs, while another study showed as many as 64%. Of those who do seek care, 41% are willing to ask for cost estimates before agreeing to treatment, and 57% check their health plans to ensure coverage. Affordable payment options are a must for every chiropractic office, yet our current health care system is not geared toward allowing chiropractors to provide free or highly-discounted care to our patients. And as a business owner, free care doesn’t make good sense either.
A good chiropractor and business owner should have options in place to remain profitable and still give their patients access to affordable care. Using a discount medical plan organization (DMPO) is one of the simplest ways to keep care affordable for your patients, remain compliant with state and federal guidelines, and remain profitable as a business owner.
RAY FOXWORTH, DC, FICC, MCS-P, is president of ChiroHealthUSA and a certified medical compliance specialist. He maintains his practice on NewSouth Professional Campus in Flowood, Miss., home to a large multidisciplinary spine center, with services ranging from chiropractic to neurosurgery.
Want to test your discount knowledge? Take the Discount Challenge and enter for your chance to win $11,181. Why $11,181? Because that is the average “per occurrence” fine for inducements! That doesn’t mean it’s $11,181 per patient; that is per visit. Go to chirohealthusa.com for more information on the Discount Challenge.