Q: My questions revolve around charging practices and usual and customary charges. First, is there a way to post an adjustment to self-pay accounts to reduce charges to self-pay patients before billing them, without violating usual and customary charge principles?
Secondly, we are looking at instituting an automated self-pay discount for all self-pay, regardless of charity status. Can this automated discount be applied without attaching to prompt pay?
Our facility is an integrated delivery system with a large provider-based clinic. We have many percent of charge contracts with commercial payers, even on our clinic side. Our current practice for certain modifiers-such as 51 (multiple procedures), 52 (reduced services) and 80 (assistant at surgery)-is to reduce the charges on these codes. The problem with this is that our commercial payers that pay on a percent of charges are then reducing the charges again, in accordance with the modifier rules before paying us (in spite of proof that we have already reduced them). This is costing us a good deal of money. The payers have suggested that we bill them full charges and allow them to reduce the charges. We are concerned about the impact of this policy on our self-pay patients.
A: There are two perspectives to consider:
Payer perspective: It is advisable to bill payers consistently with your normal billed charges for covered services. The usual and customary rate may vary by payer. Moving forward, consider negotiating the payment process for modifiers with each payer. We also recommend attempting to negotiate a settlement with each payer based on the difference of using normal billed charges versus the payer’s usual and customary charge. If the payer continues to violate the negotiated policy, consider filing a complaint with the Department of Insurance.
Healthcare provider perspective: Our experience shows that a healthcare provider can determine the discount for self-pay patients; it is advisable to have your legal team review your collection policies to ensure they comply with applicable state law and/or Medicare/Medicaid requirements.
Two Forum experts answered this question together: Dawn Boyd, director, managed care contracting, The Godbey Group, Irving, Texas, and Dan McAfee, senior managing director, payor contracting and reimbursement strategy, The Godbey Group.