TOSR (Time Of Service Reduction) : Patient Discounts

Time of Service Reduction
Bibliography:  The Ohio State Chiropractic Association Journal


How Much Can I Charge My Patients?

By OSCA General Counsel Rob Sherman

My original article, "What Can I Charge My Patients," is the most requested article ever printed by the OSCA. It has appeared in state and national publications and is constantly faxed and emailed to members upon request. I've been asked to revisit the information in the original article and offer an update, based upon your continued questions on payment issues.

Let’s go directly to your specific questions.

Q. Can I increase my charges to insurance carriers?
A. Generally "no". The law in Ohio precludes you from "increasing fees" if you are billing third parties even though the cost of billing to insurance carriers has greatly increased over the years.

Q. Is there a "legal" way to offer patients discounts off of my regular fee?
A. My original advice is still sound: the safest method is to erase the words “cash discount” from your vocabulary. Cash discounts invite charges that you are increasing fees billed to insurance carriers. Instead of offering a cash discount, you can consider offering your patients a time of service reduction (“TOS”). This “TOS” reduction simply means that the patient pays when the services are provided. Under this scenario, the patient may decide to submit his or her charges to the insurance carrier. The amount submitted must reflect the TOS reduction since the patient paid at this lower rate. There is no increase of fees to the third party.

Q. How much can I discount for TOS if I decide to offer this an alternative?
A. The OSCA cannot suggest an amount. However, if the amount is out of proportion to the administrative costs of submitting paperwork and the hassles associated with waiting for your money, you could be accused of offering a discount that is a de facto increase to insurance carriers.

Q. Can I reduce fees for patients who can’t afford care?
A. You may always offer a hardship discount on an individual basis to your patients.

Q. What documentation do I have to complete to offer a hardship discount?
A. There is no hard and fast rule that says each hardship case requires a disclosure of certain information. Some practice management groups offer hardship forms that request disclosure of some financial information to demonstrate that you are making individual decisions as to hardship discounts.

Q. Can I offer a hardship discount to all cash patients?
A. No. You should individualize your hardship decisions. If every cash patient is a “hardship,” you open yourself up to accusations that you are increasing fees for insurance. Approaching patients about financial hardship may be difficult. You may want to place this statement in your intake form: The doctors of________ Chiropractic Office want to know if you have any financial hardship that makes it difficult for you to complete your treatment plan. Please feel free to discuss this matter with _______ and we will do our utmost to accommodate you.

Q. Can I waive deductibles and co-payments?
A. Ohio law provides that you cannot waive deductibles and co-payments as an enticement to attract patients. This law applies to all providers and has effectively stopped the advertising of NOOPE. You should be careful if you consider waiving co-payments and deductibles under any circumstances. Many insurance contracts provide that you must attempt to collect these amounts from the patient or the carrier is not liable to pay you.

Q. Can I offer patients the right to pre-pay for their care at a discounted rate?
A. There has been a great deal of discussion in the chiropractic press regarding patient pre-paid discount plans. We feel comfortable advising our doctors that pre-paid plans are acceptable if they offer patients a specific number of visits with a discount for pre-payment. These types of plans do not appear to be the business of insurance in Ohio. Plans that offer unlimited care may violate Ohio's insurance laws since the doctor is theoretically accepting the “risk” of unlimited care. Doctors should avoid these plans.

If you adopt a pre-payment plan, consider placing the patient's advance payment into an escrow account that you can set up with any bank. You then draw money out of this account as the patient comes in for services. This idea comes from Florida where it is the law that pre-paid moneys must go into an escrow account. If the patient wants his/her money returned before all services are rendered, it is available through this separate account.

Q. Are there any risks when offering these plans?

A. Defense attorneys in personal injury cases look for differences in payment plans to give an appearance that the doctor has raised fees because it is an accident case. I have personally witnessed fraud investigators at the Bureau of Workers Compensation inquire into billing practices during investigations.

The best approach to avoid these allegations of impropriety is to stick with a time of service fee reduction and/or pre-payment plans that allow for payment of a specific number of visits in advance. Unlimited plans or cash discounts are more problematic. Of course, you can avoid these issues totally by charging one fee under all circumstances.

Q. Can I exclude personal injury cases from my time of service fee reduction program?
A. No, you should offer the program to all patients. If a personal injury patient wants to pay in advance and bill his/her carrier at a lessor rate, you should provide that option. As a practical matter, most PI patients will reject this payment option.

Q. Can I exclude workers' compensation cases from my time of service fee reduction program?
A. Yes, workers' compensation patient patients are paid under a law that requires you to wait for payment.

Q. Can I offer an unlimited payment option for families?
A. Family plans and other payment options that are unlimited in treatment visits are technically an insurance product since you are accepting the risk of your being able to provide ongoing unlimited treatment for a set fee. While I know of no active enforcement by the Ohio Department of Insurance in this arena, there is not way to guarantee future conduct of the Department. An angry patient or past employee can always generate an investigation by this state agency. How the Department has not taken a formal position on this form of payment.

Q. Can I offer “free” services to patients, but bill the insurance carrier?
A. No. “Free” is free. If it is offered to patients at no charge, the insurance carrier should not receive a bill.

Q. Can I offer discounts to various groups, such as senior citizens, the clergy, local high school athletes, or whomever?
A. Yes, you can offer fee reductions, but be careful how you handle these offers. For Medicare patients you cannot induce seniors into your office with offers of discounts. Is a small percentage discount for seniors an inducement? Probably not. Is a large reduction in fees that is advertised thro