Discounts & Credits – Not Just Benefitting Your Patients
Posted by Administrator at 4:26 PM on Nov 20, 2015
Image Credit: © Dreamstime.com
We’re seeing a problem arise regarding one of the fundamental concepts about dental insurance billing. This problem is being missed by practices, usually because of innocent oversights, but the consequences can be damaging.
We’re talking about billing an insurance company for the actual cost of dental treatment. It doesn’t sound like a big deal, but what if you’re offering your patient a five percent discount for paying at the time of service? This is typical, and many practices are then billing insurance companies for the full amount. However, the cost of treatment should really be the full cost for dental services minus the five percent discount you extended to the patient, and that is what you bill for their insurance as well.
Yes, the insurance company also receives the discount!
For example, say you’re offering a $200 courtesy credit to a patient who is having a substantial amount of dental treatment done. Many practices will simply lower the patient’s out-of-pocket costs by $200, but still bill their insurance company the full price. What you should be doing is billing the insurance company for the cost of dental treatment minus the $200 credit, as that is the true cost of treatment. You do not get to selectively apply the discount to the patient only.
The consequences for violating these rules can be costly. You may be unknowingly violating state laws and/or participating provider contracts. Depending on the case, you could be accused of overbilling insurance companies or of fraudulent billing practices. These can both turn into very serious matters.
For help with applying discounts and credits, or for more information on insurance billing, please contact Dental Bookkeeping.