...“you are not allowed to give away anything of value over $15, or you could be accused of inducing a patient to use your office or services over another provider.”...
During the past decade, healthcare costs have risen faster than the average annual income in the U.S. Many of our patients feel the pain of higher premiums, deductibles, and copays. As a patient, I understand the pain. As a provider, I feel the increased burden of rising costs in my practice and diminishing reimbursements.
When facing similar challenges, some doctors try to justify not charging for some services in their practices. I hear it all the time. “Well, I do XYZ for free. But it’s okay because I don’t charge my patients or the insurance company.” That sounds good in theory, but the reality is that giving away any service for free can be risky. Most chiropractic offices offer discounts, but are they good, bad, or illegal?
What is the difference?
A “good” discount is compliant and may be given to any patient no matter who is paying the bill (legally defensible). A “bad” discount is one that your state may allow but not the feds or insurance carriers (subject to interpretation). An “illegal” discount will likely land you in hot water if your office is audited (not legally defensible).
As business owners, we all feel that we should be able to operate our businesses as we see fit, but the truth is that we can’t always do what we want, especially in health care. The business of health care is the second most regulated industry in the U.S. If we choose to participate with third-party payers, then we are obligated to follow our contracts, many of which include a clause stating we will not charge the insurance company more than we charge a private-paying patient.
Additionally, when it comes to Medicare and other federally funded programs, the rules must be followed explicitly. For example, if your actual exam fee is $100, and you run a promotion that gives the exam for $29, you could receive penalties from Medicare for offering an “inducement.” Per Medicare regulations, you are not allowed to give away anything of value over $15, or you could be accused of inducing a patient to use your office or services over another provider. The charge could be considered less than fair market value, which is also part of the inducement prohibition.
The Office of Inspector General (OIG) continues to ask for additional funding to fight Medicare fraud, waste,
and abuse. More money equals more audits. They also have introduced new and easier ways for patients to anonymously report concerns about pricing and discounts by provider offices. We reported in early 2019 that the OIG began utilizing the impact of social media to educate patients on how to report pricing and discount concerns. With regular videos posted to social media and FB live events, the OIG is using every available channel to educate patients on identifying and reporting even their smallest concerns.
In March 2018, a colleague in Iowa agreed to pay nearly $80,000 for violating the False Claims Act. He is alleged to have violated the act by billing Medicare and Medicaid for chiropractic adjustments after providing free electrical stimulation to influence those people to receive chiropractic adjustments. The investigation lasted over 18 months, and the doctor agreed to the settlement because of the rising costs of legal fees and the reasonable settlement offer.
In July 2016, two primary auto insurance payers filed suit in federal court against a chiropractor alleging fraud. The payers claimed that the doctor was charging lower fees for cash-paying patients, advertising-free consultations, and offering free massages. National Association of Chiropractic Attorneys member Larry Laurent said, “You cannot charge one fee for insurance cases (e.g., personal injury) and a lower fee to cash patients, despite the obvious fact that your cash patients require lower overhead.”
Our current healthcare system is not geared toward allowing chiropractors to provide free or highly discounted care to patients. As a business owner, free care doesn’t make good sense. A good chiropractor and business owner should have options to remain profitable and still give patients access to affordable care. If it is in your heart to help everyone regardless of ability to pay, then partner with other local providers who may offer services one day a week at a local shelter or charitable organization.
You simply need to read the headlines, posts, and tweets about providers across the healthcare profession being audited, fined, and even convicted to see that the costs of noncompliance are real. We tell ourselves, “It won’t happen to me.” The reality is that it easily could. Your license is your livelihood. Your families, employees, and patients depend on you to do the right thing in the right way by following the rules and regulations. The cost of ignoring potential problems in your practice could cost you far more than you imagine.
As part of our commitment to protect and educate the profession, we have launched the Discount Challenge 2.0. You have five minutes to review 10 scenarios and identify which discount practices are good, bad, or illegal. If you miss one or two, you’ll see information about the correct answer with links to sources where you can learn more. Test your knowledge by visiting www.chirohealthusa.com/discount-challenge/.
Dr. Ray Foxworth is a certified Medical Compliance Specialist and President of ChiroHealth USA . A practicing Chiropractor, he remains "in the trenches" facing challenges with billing, coding, documentation and compliance. He has served as president of the Mississippi Chiropractic Association, former Staff Chiropractor at the G.V. Sonny Montgomery VA Medical Center, and is a Fellow of the International College of Chiropractic. To request a free onepage financial policy, send an email to [email protected].
