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Do self-pay discounts encourage patient responsibility?

By Shannon Geis
May 26, 2016
Body of Knowledge Domain(s): Financial Management

As patients assume greater responsibility for their healthcare costs and professionals grapple with changes issues by payers, MGMA members are considering encouraging patients to self-pay by offering discounts.

“If, as an industry, we want to encourage patient responsibility and freedom to pick doctors, let’s offer them our best price,” says Charles R. Wold, CPA, PFS, MGMA member, business consultant, World Consulting PC, Phoenix, in a recent MGMA community thread.

There are definite benefits to having cash paying patients, Wold says, which include:

  • No pre-authorizations
  • No third-party contracts
  • No special billing

“So if the self-pay patient pays at time of service why not discount to your best rate?” he adds. “Let’s try to give the self-pay [patient,] who is willing to promptly pay our best price and encourage the behavior.”

On the other hand, David L. Smith, FACMPE, MGMA member, executive and advisor, Lawrence, Kan., says he’d rather standard fees at a reasonable rate. “In some specialties it might make sense to offer discounts for full payment at time of service (if that isn’t the norm), but I try to set fees so that after the prompt pay discount, the rate paid is comparable to the best contracted rates.”

What’s the discount?

If you do decide to offer a self-pay discount, what should it be?

Susan Childs, FACMPE, MGMA member, president, Evolution Healthcare Consulting, Rougemont, N.C., recommends taking a look at your master fee schedule first and has seen everything from 20% to 50% “but most typically 30% or 40%,” she says.

Mary Pat Whaley, FACMPE, CPC, MGMA member, co-founder and president, Manage My Practice, LLC, Morrisville, N.C., thinks self-pay rates should be slightly above Medicare. “Self-pay should reflect the fact that the patient is paying in full at time of service and there is no practice expense for filing a claim and collecting from insurance.”

Some MGMA members talk about the role of competition in setting rates.

Paul I. Berkley, FACMPE, MGMA member, administrator and chief executive officer, Healthcare Associates in Medicine, P.C., Staten Island, N.Y., described regional charges as obscene, which led to the establishment of a simple self-pay schedule. “We make our rates global since we see many injuries (orthopedics). It includes the visit, x-ray and, if there is a fracture, a flat rate based on body part,” he explains. “…the simplified fee schedule is very helpful.”

Whether you decide to give self-pay discounts or not, there are a lot of individual factors to consider. And in the end, “you know your patient population better than anybody else, and I think you can quickly come to some numbers you’re happy with,” Childs says.

What do you think about self-pay discounts? Do you think the discounts encourage patient responsibility? Do you give them in your practice? Let us know and read more of this discussion in the MGMA Member Community Financial Management Network.

Shannon Geis, Staff writer/editor, MGMA

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