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Thread Topic: Self Pay patients

Topic Originator: Tina
Post Date December 8, 2005 @ 2:52 PM
Self Pay patients Self Pay patients

Self Pay patients

Self Pay patientsDecember 8, 2005 @ 2:52 PM Reply  |  Email Friend   |  |Print  |  Top

I have a question about patients that are self pay. Can you charge them less then what you would charge insurance patients?

Self Pay patientsDecember 8, 2005 @ 6:46 PM Reply  |  Email Friend   |  |Print  |  Top

I work in an orthopaedic office and we give a 30% discount to patients who pay on the day of service. If they do not pay on the day then it is at full charge. However, I have seen the doctors charge less for self pay patients (OV 99212/99213) than they normally would for insurance patients (99214). So the decision in our office rests with them.

Self Pay patientsDecember 9, 2005 @ 7:56 AM Reply  |  Email Friend   |  |Print  |  Top

Most of our clients give a 20%-30% discount for SAME day self-pay patients.

Self Pay patientsDecember 9, 2005 @ 8:17 AM Reply  |  Email Friend   |  |Print  |  Top

But is there a law that says you can't give a discount or no? I just want to make sure we do not get in trouble for charging less than we would to the insurance patients.

Tammy Harlan
Self Pay patientsDecember 9, 2005 @ 10:39 AM Reply  |  Email Friend   |  |Print  |  Top

Hi Tina,

In a general sense of the question, the answer is "Yes, it is illegal to charge self (cash) pay patients less than the charge that is being submitted for those patients with insurance coverage."  This creates an illegal "dual fee schedule/structure."

There are exceptions, however.  Some practices will set-up a "Time of Service" discount that is offered to all paying entities.  If the discount is provided "across the board"...  (to all payers) insurance companies, attorney's and patients, it is not illegal.  A practice will provide this "discounted charge" in the event that the patient pays for the visit in full and then files their own insurance for reimbursement.  The discount can be justified by claiming that this method reduces their workload and decreases overhead and operations costs.

Another exception is in the event of "hardship."  As long as a practice has properly documented the hardship of the patient, it can reduce the cost for the patient - usually by waiving deductibles and copayments.

The following is an interesting article written by a doctor of chiropractic addressing "dual fee schedules."....

Tammy Harlan
Medical Billing Course

Self Pay patientsDecember 15, 2005 @ 2:51 PM Reply  |  Email Friend   |  |Print  |  Top

We have a physician that insists that charging private patients and insurance patients differently is not illegal. Do you have any documentation that supports otherwise that we can give her?
Thank you!

Self Pay patientsDecember 17, 2005 @ 8:58 AM Reply  |  Email Friend   |  |Print  |  Top

A quick call to Medicare or any insurance company should tell you what you need to know. They are the ones that really don't allow a dual fee schedule. They can provide whatever you need in writing to show he can lose his credentialing with them for charging that way. At least that is my understanding.

Steve Verno
Self Pay patientsJanuary 5, 2006 @ 5:02 PM Reply  |  Email Friend   |  |Print  |  Top

First, it is not illegal to charge an uninsured patient a different amount than a patient that has insurance.  When you say the word illegal, it must be backed by a State or Federal Law.  In 42 CFR 1000, it states the following:  We propose to define the term usual charges to include the amounts billed to cash paying patients, the amounts billed to patients covered by indemnity insurers with which the provider has no contractual agreement; and any fee-for-service rates it contractually agrees to accept from any payor including any discounted fee-for-service rates negotiated with any managed care plans."   This law goes further to state the following:  "Given the changes in the health care marketplace, negotiated rates have become a substantial portion of many healthcare provider's revenues.  To the extent a provider agrees to discount its rates, the discounted contract rate is it's charge to those patients."   In the same section it also states the following:  "We also propose that the following charges not be included when determining the usual charge:  Charges for services provided to uninsured patients free of charge or at a substantially reduced rate."

In my 32 years in this business, I have found NO state law that regulates what a doctor charges an unsured patient for their services.

Now, when establishing charges, a provider should establish a set fee for each procedure and that fee is what is charged to everyone, insured and uninsured.  There are several reasons behind this:

1)   By charging different amounts, you have no clue as to what your usual and customary charges are.  You have a charge for Insurance A, a different charge for Insurance B, a different charge for uninsured, etc.  By setting one fee, you are establishing your UCR for your geographical area.  What can do is establish reimbursement fees based on carrier and uninsured patients.

2)  By charging different fees, you are hurting my physician.  Lets say my doctor charges $100 for CPT XXXXX and your highest fee is $50 because that is what Insurance A reimburses you.  Therefore, the UCR for our geographical area is now lowered and the insurance company can use that against my doctor.  They will say he charges too much, when in reality, his fee is his bottom line in order to pay all of the bills.  The insurance company uses this to have the patient go to the doctor and tell the doctor his fees are too high.  This disrupts the patient-provider relationship.  It also causes problems when I want to try and negotiate a decent reimbursement rate when contracting because the carrier will come back and say that the UCR for the area is $50, not $100, so all they will pay is $50 at the most and they really want to pay me $20.

3)  By setting different fees, the doctor opens himself to investigations and possible fraud or abuse.  As we all know, it is considered Medicare abuse to charge Medicare more than what you would charge others.  So, if you charge Insurance A, $50 and Insurance B $30 and Medicare $35, Medicare is going to wonder why Insurance B is charged $30 and they are charged $35 for the same procedure.  Again, keep the fee the same, negotiate your reimbursement rates.  

4)  Some uninsured patients may consider the fact that your charging them a higher amount, discrimination.  Take the recent lawsuit against Tenet Health.  They were sued for charging uninsured patients more than insured patients.  Tenet agreed to settle the lawsuit, without admitting fault, and begin charging uninsured patients the same as insured patients.  Now they too negotiate settlements with uninsured.  If you charge everyone the same, no one can accuse you

I don't call it a discount when dealing with uninsured patients.  I called it a negotiated settlement of the patient's debt.  That is what you are doing - negotiating a setttlement and there is nothing wrong with doing this.  It's no different than what you do with the insurance companies.  You can have the patient sign a simple one page form that says, "Patient X is charged $X.00 for the visit on (Date of Service).  In exchange for immediate payment, Provider agreees to accept $X.00 as payment in full for this visit."  Both the doctor and patient sign and a copy is placed in the patient's record.

Again, it is not illegal to charge an uninsured patient an amount different than that of an insured patient and doctors can establish multiple fees for their services.  If it is illegal, point us to the law that says so. While not illegal, it is not good business practices to do so for the reasons I stated above.

Director of Reimbursement and Compliance Director
Medical Association of Billers

Self Pay patientsOctober 26, 2016 @ 10:30 AM Reply  |  Email Friend   |  |Print  |  Top


In light of high deductible plans, where you know the patient is liable for the first $3000, can you establish a self pay rate and deal directly with the patient?


Medical Coder
Self Pay patientsFebruary 7, 2017 @ 12:41 PM Reply  |  Email Friend   |  |Print  |  Top

can the office just base it on an insurance as in just charge what the insurance allowable is?

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