One of the most frequent questions asked of ICS staff is whether it is acceptable to offer “time of service” discounts (sometimes called “prompt pay discounts”) to patients who pay in cash at the time of service. Some physicians offer these discounts as an incentive for immediate payment to avoid the administrative and financial costs of carrying an outstanding account. As is the case with any type of discount, providers should be cautious, informed, and wary of assuming that unrestricted discounts are allowable simply because competitors may be promoting them.
Although providers most often use these discounts for patients who are either uninsured (not in any health plan) or who have insurance that does not cover the services in question, this article will also address whether in-network providers may offer time of service discounts to patients in the same network. (Time of service discounts are not to be confused with licensed medical Discount Plans, discussed below, in which patients pay a fee to gain access to a network of providers and the patient pays the provider based upon the network’s negotiated discount rate schedule.)
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