Question Self- Pay Discounts

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I work for a very rapidly growing multi- specialty clinic. One that started with 3 family practice providers over 30 years ago. Some of the providers and upper management are still in the mindset that they can make their own rules and that certain laws don't exist.

They are trying to force my staff to no charge patients who have insurance (ones we are contracted with), downcode to benefit patient, change codes to get paid for services that are normally non covered (straight Medicare PEs, changing them to an OV), and giving cash discounts for services where patient has insurance but doesn't want it billed.

I KNOW all of this is illegal. But I need tangible resources. Can anyone point me in the right direction to be able to provide them with CLEAR concise laws prohibiting these types of practice?

Thank you so much!


Pasadena/LaPorte Texas Chapter
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Sounds like a well established practice that has been around for many years. Hopefully, your guidance will help them maintain the reputation that they've built.

I'll share my thoughts based on only what you provided.

Can a healthcare provider give a cash discount for services where patient has insurance but doesn't want it billed? Actually, they can if the patient instructs them to.
The patient (not the provider) may opt to avoid insurance billing for the test (even if the service is routinely covered.) The HITECH Act, Section 13405 of Subtitle D of the HITECH Act (42 USC 17935)], allows a patient to restrict the provider from filing a claim to the payor. See page 39 of the Act. --- Basically, the patient is saying, protect my privacy and do not share this PHI with my insurance company. To protect the practice, have the patient document their request in writing. If the payor comes back and asks why you didn't bill the payor for a covered service, you can indicate you received a written request from the patient where the patient instructs you to NOT bill the payor. I would not provide a copy of the letter to the payor unless advised to do so by an attorney. As mentioned, the patient doesn't want the payor to know anything. Let me provide a scenario. Married couple going through a difficult time and neither has slept with each other for a while. The woman cheats and believes she might be pregnant. She goes to the doctor for a pregnancy test but does not want the insurance to be billed because her husband is the policy holder and will get an EOB. She opts to pay in cash instead of having insurance billed so that her husband doesn't learn about the pregnancy test through the insurance activity.

Can the doctor waive the charge of a covered in-network test to reduce the patient's out of pocket expense? No.
Is your doctor enrolled as a provider with Medicare? Consider how they might feel if they learn that a private insurer's claim is waived but theirs is not. Now its a Medicare issue.
The documentation you are looking for is in the provider's enrollment contract AND the provider's manual (oftentimes published for all providers.)

Can the doctor downcode to benefit the patient? No. The doctor must bill for all services performed.

Can the doctor change codes to get paid for services that are normally non-covere? No.

You didn't ask this question - Can the doctor waive or reduce a patient's financial responsibility based of financial hardship? Yes; however, not routinely. Also, there should be a documented policy as to how a patient's financial hardship is determined and the administration of such a program should be consistent and fair for all patients. Document everything. Stick with the policy and don't make exceptions.

I recommend you look for a document published by CMS called, "A Roadmap for New Physicians - Avoiding Medicare and Medicaid Fraud and Abuse."

You have an obligation to report (if this has already taken place.) MAYBE THEY ARE TESTING YOU. Speak to your internal Compliance Manager or Officer. If one is does not present, report it to the outsourced Compliance group that manages the practice. If one does not exist, Reach out to the OIG. Lack of tangible documentation is not an excuse for not reporting. You already know what the right thing to do.