If you have a high deductible, a “Cash Discount” sounds like something that could save you money…but the devil is in the details, as the saying goes.
What is a Cash Discount?
Like a menu, every medical practice has a list of services and prices called a Fee Schedule. A Cash Discount is a price that the provider agrees to for a service or services, on the condition that the patient makes payment at the time of service. With a cash discount, you don’t file a claim with your insurance, and you cannot be billed later for services that were provided.
Let’s say that you come in with an insurance plan which has a $5,000 deductible. You want to save some money, so I provide a service that is $100 on the fee schedule, but you and I have agreed to a Cash Discount price of $75. You must pay $75 at the appointment, and I do not file an insurance claim.
Isn’t It a Good Deal?
Well, what if I told you that your insurance company had already arranged a discount for you? This special discount that your insurance plan gets is called the “allowable” or “contracted” rate. That discount applies to services provided by someone in your insurance plan’s provider network. And best of all, it counts against your annual deductible!
Now what if your insurance plan had arranged a discounted price of $65 for that $100 service? In many (if not most) cases that I have seen, the cash discount price being advertised is actually HIGHER than the insurance contracted rate, and didn’t count toward the annual deductible or out of pocket (stop-loss) limits.
Can It Be Fraudulent?
In many cases, an offer of a cash discount to a patient who has insurance is considered enticement, which is a type of insurance fraud in Texas.
Enticement means a kick-back or bribe was given to a patient (and taken from the insurance company), to influence the decision on which provider to use. Let’s say that you paid a cash discount of $75, but the provider reported to the insurance company that you paid $100, which was credited toward your deductible. You received a $25 credit against your deductible that you didn’t pay for. If you knowingly inflate your deductible, you are also committing insurance fraud.
How Can I Get the Best Possible Price?
Go with a provider in your insurance network! If you have out of network coverage, be prepared to pay significantly more. The 10% in-network coinsurance (of an in-network, contracted price) is much less than a 10% coinsurance for an out of network provider, where there is no contracted rate. The price could be anywhere from 50% to even 500% more.
Discuss your treatment options! In physical therapy, like home remodeling, “sweat equity” can save you a bunch. Make sure you’re working on all of the items you were assigned by your therapist, and you’ll need significantly fewer visits. If you understand and independently execute your home items, then you will spend your clinic time on specific items that the therapist must help you with, rather than spending your hard-earned money on repeating the same tasks each time you come in.
Don’t be afraid to discuss price! There are some contract restrictions that preclude your provider from disclosing the exact price on any given item, however, a “good faith estimate” should never be a problem. Be honest with what you can afford, and be prepared to pay an estimated portion each time you come in.