Risky Business: The Right Way to Discounting in 2024!
by Ray Foxworth, DC
Discounting is a common practice in many chiropractic offices across the United States, and for good reason. It can help make chiropractic care more accessible to patients and ensure they continue receiving the necessary treatment. However, offering discounts in your chiropractic practice requires careful consideration and a strategic approach to avoid putting your practice at risk.
Discounting is not simply about reducing prices. It is about striking a balance between providing affordable care to patients and ensuring the sustainability of your chiropractic practice. As a chiropractor, your primary goal is to improve the health and well-being of your patients, and discounting can play a vital role in achieving this objective, but not to the detriment of your practice's financial success.
Compliance with federal and state laws is one of the most crucial aspects of discounting. You must know the regulations related to dual-fee schedules, inducements, and anti-kickback statutes. Violating these rules may result in severe consequences for your practice. The most common discounting errors we see include:
Dual-Fee Schedule: Practices that charge more to insurance companies than their self-pay/cash patients have a dual fee schedule. Not only does this violate your provider agreements, but it is also a potential False Claims Act violation.
Improper Time-of-Service Discount: Time-of-service, or prompt-pay, discounts are offered based on bookkeeping savings. The Office of Inspector General (OIG) stated that a reasonable time-of-service discount falls between 5% and 15% in one opinion. This opinion serves as broad guidance for others in health care. We often see providers with time-of-service discounts upwards of 30%, which are used as cover for a dual fee schedule. (OIG, 2008).
Inducement Violations: The OIG permits incentives up to $15 per item and no more than $75 annually to patients. This violation occurs when you offer patients something that may "induce" them to choose your office over another. For example, free services, or the waiver of co-pays or deductibles, could be potential inducement violations. Civil monetary penalties (CMPs) for an inducement violation range from $10,000 to $50,000 per wrongful act. (OIG, n.d.).
Anti-Kickback Violation: The federal Anti-Kickback Statute (AKS) is a criminal statute prohibiting the exchange (or offer to exchange) anything of value to induce (or reward) the referral of federal healthcare program business. Most everyone knows that you cannot pay attorneys for referral of PI cases, and you cannot accept payment from labs or MRI centers for patient referrals. However, most people do not know that waiving deductibles and copayments and not charging for services can also be considered an anti-kickback violation because patients receive something of value rather than a third party. Violation of the AKS is a felony punishable with a fine of up to $100,000 and up to 10 years in prison. Civil monetary penalties (CMPs) for a kickback include $100,000 per kickback plus three times the amount of the remuneration. (Whistleblower Law Collaborative, 2022).
False Claims Act: The False Claims Act, also called the "Lincoln Law," is a federal law that imposes liability on persons and companies who defraud governmental programs. In healthcare, violations often occur when doctors falsify their documentation, use improper coding, or engage in other billing practices that lead to higher reimbursements than they should have received. Examples include up-coding for higher reimbursements and down-coding to avoid more scrutiny. As of January 30, 2023, civil penalties range between $13,508 to $27,018 for each claim. Criminal penalties for submitting false claims include up to 5 years in prison and criminal fines of $25,000. (Sidley, 2023).
Healthcare providers should continuously strive to avoid healthcare fraud. Increased scrutiny and pressure from third-party payers and government agencies will not go away anytime soon. The National Heath Care Anti-Fraud Association conservatively estimates that healthcare fraud costs about $99 billion annually — about 3% of the nation's healthcare spending. Other estimates range as high as 10% of the annual healthcare expenditure, or $330 billion. Healthcare fraud is a serious crime that affects everyone and should concern everyone—government officials and taxpayers, insurers and premium payers, healthcare providers and patients—and it is a costly reality that none of us can afford to overlook. (National Health Care Anti-Fraud Association Headquarters, 2022).
Proper discounting in chiropractic offices is a delicate balance between affordability for patients and safeguarding the sustainability of your practice. It is essential to stay informed about regulatory compliance, offer legal and compliant discounts, and maintain ethical billing practices. As a chiropractor, your mission is to provide high-quality care that enhances the well-being of your patients. Remember, helping your patients should not put your practice at risk. It should strengthen your community's bonds of trust and care.
National Health Care Anti-Fraud Association Headquarters. (2022). The Challenge of Health Care Fraud. Retrieved from NHCAA: https://www.nhcaa.org/tools-in...
OIG. (2008). OIG Advisory Opinion No. 08-03. Washington, DC: OIG.
OIG. (n.d.). Civil Monetary Penalties Law [42 U.S.C. § 1320a-7a]. Retrieved from OIG: https://oig.hhs.gov/compliance/physician-education/fraud-abuse-laws/#:~:text=Civil%20Monetary%20Penalties%20Law%20%5B42%20U.S.C.&text=OIG%20may%20seek%20civil%20monetary,%2410%2C000%20to%20%2450%2C000%20per%20violation.
Sidley. (2023, February 1). DOJ Announces Increases to FCA Penalties Due to Inflationary Adjustments. Retrieved from Sidley: https://fcablog.sidley.com/202...
Whistleblower Law Collaborative. (2022, April 19). AKS – Anti Kickback Statute Explained. Retrieved from Whistleblower Law Collaborative: https://www.whistleblowerllc.c...
Dr. Ray Foxworth is a certified medical compliance specialist and the president of ChiroHealth USA. A practicing chiropractor, he remains “in the trenches,” facing billing, coding, documentation, and compliance challenges. Foxworth has served as president of the Mississippi Chiropractic Association and is a former staff chiropractor at the G.V. Sonny Montgomery VA Medical Center. He is a fellow of the International College of Chiropractic. To request a free one-page financial policy, send an email to [email protected].
