When Discounts Go Wrong (and When They Go Right!)

When Discounts Go Wrong (and When They Go Right!)

We are in the business of helping people, which can mean that our ultimate purpose is more than just treating teeth; it’s preventing financial barriers from standing in the way of a patient’s oral health. With that said, a well-meaning gesture can quickly become an insurance contract nightmare.

Offering discounts can be a simple and mutually beneficial strategy for the practice. However, it’s crucial to ensure the process is executed correctly to avoid any insurance mishaps or potential accusations of insurance fraud.

Thinking about your dental practice right now – are you currently offering patient discounts? Or maybe you want to offer discounts, but the fear of doing it wrong has stopped you.

Are Your Discounts Helping Patients — or Endangering Your Practice?

Let’s explore discounts by looking at these scenarios:

Scenario 1:

A patient is receiving a ceramic crown (D2740) on tooth number 30.

• Your Full Practice Fee: $1,000
  Discount Amount: 10% (or $100 off)

The Action Taken: The office recognizes the $100 discount before submitting the claim, and the claim is submitted for $900 instead of the full office fee of $1,000.

Scenario 2:

This is the same scenario as stated above.

The Action Taken: The office submits the full office fee of $1,000 to the insurance company. After the insurance pays their portion, your office takes the 10% discount from the remaining patient balance.

What is the only compliant option?

If you chose Scenario 1, congratulations! You’ve avoided a crucial discount mishap.

If you chose Scenario 2, you are not alone. The second scenario is a common, but critical error that many dental professionals make every single day. Many dental professionals believe that you should always report your full practice fee on the claim form. While that sentiment is typically accurate, the caveat to this is when the office plans to offer the patient a discount.

Best practice is to:

Submit the full practice fee on the claim form, less any discounts.

Now let’s look at one final example:

Scenario 3: The Discount Disaster

Again, a patient is receiving a ceramic crown (D2740) on tooth number 30.

• Your Full Practice Fee: $1,000
  Discount Amount: 100% (the patient is not being charged their portion)

The Action Taken: The office submits the full office fee of $1,000 to the insurance company. After the insurance pays its portion, your office writes off the entire patient balance.

Before You Waive that Copay – Read This

Generally speaking, taking a patient discount after the insurance company has paid its portion would be considered copay forgiveness and overbilling, potentially fraudulent billing practices.

Consider the following:

• The ADA’s Principles of Ethics and Code of Conduct states that doctors should not accept payment from third-party payors as payment in full when the patient’s plan contractually requires a copayment. This applies regardless of whether the office is in-network with the patient’s plan.
• In addition, all states have laws prohibiting copay forgiveness in some form, with a few exceptions for financial hardship or extreme circumstances. Every dental practice should understand its state dental practice laws before granting any copay forgiveness, which can be found on your State Dental Board website or in your state’s general statute regarding insurance matters. These laws apply to all healthcare providers in the state, including dentists.
• Federal laws also restrict copay forgiveness for federally funded plans. One of these laws is the anti-kickback statute (AKS).
• Almost all PPO contracts specifically state that contracted providers cannot offer copay or deductible forgiveness. It is a violation of the contract—and consequently a high audit area. Participating providers who waive copayments could be in breach of the PPO contract.

Take control of your billing integrity.

Offering discounts can be a powerful tool for patient loyalty and case acceptance, but remember – ignorance is not a defense. Don’t let administrative uncertainty expose your office to legal and financial risk.

If the fear of the unknown has kept you from using discounts effectively, fear no more! It’s time to stop guessing and start administering dental discounts correctly and with confidence.

Want to learn more about offering dental discounts? Click here to purchase your copy of Dental Administration with Confidence TODAY!