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  • Angel Callaway, CPC, CPB

Self-Pay Billing

Billing for self-pay is pretty straightforward, however, there are some considerations to keep in mind.


1. Medicare law prohibits submitted claims to Medicare that contains charges substantially in excess of your usual charges. This provision could apply toa doctor who regularly discounts charges to self-paying patients while submitting higher charges to Medicare patients to less than 30 percent of their total business, which should avoid any allegation that the discounted charges are, in reality, the doctor's usual charges.

2. If ever questioned, a physician should be prepared to defend the self-pay discount on some legitimate basis, such as decreased paperwork and administrative expense compared to insurance or government billing, prompt pay considerations, or the ability of an individual to pay full charges.

3. Check your contracts of insurance; they may not allow you "to just take cash" from a patient with that insurance, even if the patient wants to self-pay. There is often a clause that mandates you directly bill the insurance company for any covered services provided to their insureds.

4. Effective January 1, 2022, a provider must furnish a self-pay patient with a notice and a good faith estimate of the cost of care prior to all scheduled services.


Providers often ask "Can I bill a self-pay patient less than Medicare allowed amount?" Yes, you can, as long as it is an unusual circumstance and it is documented. In every aspect of your billing process, you must show that you always charge a self-pay patient the same amount you charge Medicare with very few exceptions. You should treat each adjustment to a self-pay patient as an unusual event.


Example: An established patient comes in for a sick visit, she has lost her insurance and asked about self-pay. You discount the visit to below Medicare's allowed amount. You document the discounted rate and the reason for the discount showing this is an unusual event.


Another question often asked is " Can I charge a self-pay patient I saw in the emergency room a lower rate than my usual self-pay office rate? No, because billing one self-pay patient a different rate without a documented hardship is a violation of Medicare laws. All self-pay patients must be charged the same amount in the absence of financial hardship.


Following these guidelines, as well as the federal guidelines can help stay compliant in your billing practices.

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