Let’s talk about billing & questionable practices when billing. I recently had a conversation with a professional regarding inflating one’s fee when billing insurance. In this case, the professional routinely charged one rate for clients paying by cash or check, but when submitting bills to insurance companies (out of network), inflated the rate to 3.5 x the routine rate. For illustration purposes, use these numbers:  cash rate for 90834  = $130, insurance rate = $450.

Yes, you read that right. And when asked about the insurance rate, the professional claimed that because she was out of network, she was not contractually bound to offer the same rate to insurers, and had been “assured” by others in the field that this was perfectly fine. Furthermore, she went on to state that she inflated her insurance fees “in order to make therapy more affordable to the people who need it.” The rationale is that if insurance only pays 50%, then 50% of $450 will cover completely the fee for therapy, so the client won’t be stuck with a $65 cost they cannot afford. Furthermore, for clients with large deductibles, the inflated billing “helps them reach their deductible faster” so insurance will start paying. Pressed even further, the professional claimed that by “hitting for the fence” (charging a very high fee), she was helping the entire field as it would drive insurance’s calculation of “Usual & Customary” fees higher.

So, is this perfectly okay?  Or not?

I propose to you that not only is it not okay, but also it is not okay on several different levels, including potential harm to patients.

First of all, let me state my opinion that while something might not be illegal, it can still be wrong. Secondly, this might involve illegal activity, perhaps even felony level insurance fraud, according to APA’s Legal & Regulatory attorneys.

Does your view of whether it is okay change if the patient requests the arrangement?  Would you feel comfortable if your patient asked you to change your billing amount on the bills submitted to the insurance?  I invite you to sit with that hypothetical for a few moments, and consider whether you would agree or feel comfortable agreeing. For many of us, it might touch off feelings of discomfort, or feeling recruited into a scheme. It might feel like a boundary-crossing.

So, if it were not okay when requested by a patient, why might it seem okay if initiated by the clinician?  It’s tempting to think that this price inflation is “victimless” or that the only party harmed would be the insurance companies, who we often view as profit-hungry or mean.

I would argue that first and foremost, the clinician’s integrity is harmed by agreeing to or offering such an arrangement. As a patient, alarm bells go off in my head if my clinician bends the rules or shows questionable integrity. I find myself asking, where else are they crossing boundaries?  Can I trust this professional?

Does this behavior (again, whether requested by the client or offered freely by the clinician) change the balance of power in the therapeutic relationship?  Could a client feel that they now “owe” the clinician for this act of lowering their financial cost of therapy?

Consider another scenario: the patient did not request the fee inflation, and the patient is a healthcare provider, perhaps in another discipline. The patient worries that if the inflated fees are discovered, the patient’s own contracts with the health insurer could be threatened, because they noticed the fee inflation but did not report it, thus making them feel complicit in fraudulent billing.

Professionally, I have spent much of my career in Oregon pushing back on a narrative that mental health costs are “out of control” and need to be “better managed” (which is usually borne on the backs of outpatient psychotherapy). Charging 3-4 times the going rate in town, even if presumably with the altruistic claim that it moves the needle on usual & customary rates (UCR), I believe, opens up a reason for insurers to push back against the mental health parity gains we fought so hard for in Oregon and on the federal level.

So, as OPA’s Director of Professional Affairs, what do I recommend?

• Keep your billing consistent & clean.
• Set your usual & customary rate according to what you need in income & what you believe your patients can afford.
• Always bill your same rate(s) (different rates for different procedures, such as 90834, 90837 or intake is fine).
• You can offer a cash discount, but keep it reasonable. Document the discount as a write off/write down. Have a written policy about discounted fees.
• Read all your insurance contracts, if you take insurance. Make sure you know under what circumstances you may offer discounts to covered insured patients.
• You can offer a discount or write down for financial hardship. You can’t routinely write off copays (see APA Good Practice article here:  APA Good Practice, 2009). You cannot make a blanket statement/plan to waive patients’ coinsurance. If an insurer with whom you are contracted has a 20% coinsurance fee and you were to waive the fee entirely, you are violating your contract (and the insurer might consider it fraud) because you are now accepting the 80% insurance payment as 100% of the fee. Don’t do this.
• If you bill insurance on behalf of PUBLIC insurance (Medicare, Medicaid, Workers’ Compensation), you might be violating the laws of those programs.

As your OPA Director of Professional Affairs, I welcome emails or phone calls to discuss these kinds of issues.  If I don’t know the answer, I will research and reach out to APA colleagues.