Insurance charge vs. retail charge

If I am a in network provider for a insurance company and they will reimburse $60 a treatment…does this mean I have to charge all my patients $60 for a treatment or can I charge more to non-insurance clients….or can I charge more and just wave the difference on the insurance clients?

A Johnson

Hello and thanks for the question. Short answer  – yes  you can always charge more to a cash patient than what you agree to accept from being a provider in an insurance network and yes – you can and should charge your full cash price when billing insurance even though you have agreed to take less and wave the difference.

 It is far more tricky if you try to charge less to a cash patient than what you bill an insurance company because you can’t have a two-tiered pricing structure – one for insurance and another lower one for cash patients. You can, however, give a modest discount for cash patients. In my book, I mentioned this saying you can give a cash discount but that terminology is no longer used. Instead, the term “time of service” (TOS) discount is now being used, the idea being it is reasonable to give a modest discount when paid at the time of the service rather than having to wait for payment (like from an insurance company).

 How much is a “modest” discount? No one will go out on a limb to give a set figure but I think the insurance industry actually provides us a reasonable figure with their own use of “Discount plans”. A Discount plan is when an insurance company’s plan does not pay for acupuncture as part of an actual “Benefit” of their policy but requires Network providers to agree to give a discount off their normal fees. The rate of theses discounts is usually 25% or maybe 20%. To my mind, it seems only reasonable that if an insurance company want us to agree to accept a 25% discount off our normal cash price for one of their policy holders they are not providing an acupuncture Benefit for, we can give a 25% Time of Service discount for our cash patients compared to what we charge when billing insurance.

Of course, this is just my logic and unfortunately the powers that be have not agreed to accept my logic as their own although the world would undoubtedly be a better place if they did.

Matthew Bauer

I’ve read your book during my third year of Acu school and I thought it was very helpful and insightful.  I’ve recently been thinking along to lines of the “middle way” and wanted to get your thoughts on a pricing model.  

Regular price for acupuncture $55 (what you charge insurance patients)

TOS discount to $40

Prepaid discount for 5Tx at $35

Prepaid discount for 10Tx at $30

These prices would obviously require a higher volume than you advocate in your book.  The goal is to be able to approximate Community Acupuncture prices and their affordability factor while still being able to have insurance patients and not run afoul of their regulations regarding pricing.

Do you think the $30 discount for prepaid treatments is too large?  Any other thoughts on this pricing structure?