Dynamic Chiropractic – November 5, 2007, Vol. 25, Issue 23

Discounting Services for Certain Patients

By Samuel A. Collins

Q: I want to discount my services for certain patients. I bill 98940 at $45 but have a patient that is paying cash, and I wanted to discount my charge to only $35. Can I bill 98940-52 to justify the lesser charge?

A: This is an interesting question.

Many offices would like to offer some financial incentive or just simply a discount for patients paying cash, but there are some legal ramifications. The modifier you chose to use for the "cash discount," -52, is the modifier for reduced services. I assume your intent for the modifier is to reflect this reduced fee. The -52 modifier's intent is to demonstrate that a lesser service was performed than would normally be done. As a consequence, the services would be reduced or "discounted."

According to the 2007 Coder's Desk Reference, "Modifier 52 identifies situations where the physician elects to reduce or eliminate a portion of a service or a procedure. Cover letters or reports are not necessary and may impede claims processing. However, physicians may find it helpful to provide the payer with an explanation of the reduced fee, compared to the usual fee. The reduction in charge reflects the reduction or elimination of a portion of the service."

Therefore, based on this explanation, it would warrant that the services (when done for cash) would be of a lesser nature than those in which insurance was involved. A possibility one may consider is that the time and detail needed for chart notes, along with pre- and post-manipulation assessments, were lesser for a cash patient, as the burden of medical necessity for a cash patient is less than an insurance carrier requires. As the chiropractic profession has witnessed in the past several years, health insurance carriers are increasingly requesting additional and more detailed documentation to justify care. This level of record-keeping and assessment can be very time-consuming for the provider, not to mention the additional time spent with the patient.

Conversely, medical necessity on a cash patient is, for the most part, decided once the patient seeks and follows up with care. Generally, any patient, and certainly a cash-paying patient, will not seek unnecessary care and would certainly not return for follow-up care should they feel it was not helpful. This does not mean the chart notes are not complete, but simply would not need the many added facets insurance carriers request to justify care. These added factors may include outcome assessments, disability indexes, more frequent and detailed functional assessments, detailed objective assessments on each visit, etc. (Note: This does not change the manipulation service itself, but the pre- and post-components associated with it.)

Bear in mind, I am not advocating that these patients do not need documentation of services, but that documentation potentially does not need to be as detailed as that demanded by third-party payers. Certainly, it is imperative to have adequate documentation of professional services, not to mention the documentation needs for risk management and potential litigation. Certainly, you must be prudent and document what you feel is needed, based on the patient's presenting problem and needs.

California providers: Be aware that California state law (Business and Professions Code 657) allows cash discounting of services when the patient has no insurance or they are not eligible or entitled to insurance reimbursement. This cash discount, by law, does not affect your regular insurance fee, which may be higher. Therefore, use of the modifier or some other designation would not be required. I currently teach billing seminars in 22 states, and I am not aware of any other state that has such a rule or law.

I am not necessarily advocating this practice, but simply as a potential. The use of the modifier is not to denote a reduced or discounted price, but that the service was reduced in some form and, as a consequence, the fee was also reduced. It is up to the individual provider to determine whether they can justify the reduction of service and discount.

When discounts for services are brought up, I think back to one of my mentors of practice management, Dr. Wayne Allen, DC, who said, "Money is not an issue unless the provider makes it one. Patients will choose their care wisely and prudently, but not simply based on being cheap or cheaper."

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