Billing Insurance vs Private Pay

Rochelle Garcia 7 years ago in Accounting/Collections Modules updated by sarah 6 years ago 15


Just a general question here...I would like to get advice or know what do other clinics do when a new client with insurance requests that we not submit claims to insurance and would just rather pay out of pocket.  As providers, if we know there is insurance should we submit to insurance or just allow the client to pay out of pocket? Does anyone have self pay policies they would be willing to share?

It is my understanding that we are required, by our MCO contracts, to submit claims to the patient's insurance company - unless we have a waver signed by the patient stating that the patient understands that they have the benefit of coverage for our services and they are choosing to not use that benefit by paying us directly.  The waver form, at least according my understanding, should include documentation of the date that this waver starts and their patient's understanding of what they will be charged for each type of service.  

I discourage this kind of request for all the comments stated. Generally it is a cost savings to utilize the insurance benefits vs Private Pay, full fee. Unless there is a proven financial hardship for the family, client, I don't allow private pay unless there are no other payment options.

I have some questions regarding client's wanting to Private Pay versus using their insurance.  Any help is appreciated!

1. If a person seeking services wants to Private Pay, can clinics legally allow them to private pay, especially if we are in network and they have the insurance coverage?  As we have contracts with different insurance companies.

2. Is is true that we cannot give a sliding scale fee to those clients that would have health insurance coverage but elect to Private Pay?

3. If they Private Pay, are they allowed to use their HSA funds to pay for these sessions, or would it depend on the type of HSA account?

Let me know if I need to clarify any questions, thanks!

This is rather a murky subject, in my experience. The answer to this question seems to vary based on the payer. We have contacted several payers and gotten different answers. Some have told us that if we know a client is contracted with a specific insurance, we are not supposed to allow them to pay privately. Others didn't seem to care. My advice is to contact the payers you are contracted with to find out how they approach this issue.

Yes, it seems to be.  I never thought to call insurance companies separately, that is wonderful advice!  Thank you!

You need to be very careful with doing this.  We did this many years ago and what this is what happened.  The client self paid and got a discount from us.  They turned around and submitted the claim themselves and made money on the deal.  Checking with the carriers is probably a good idea too.  We do let people self pay and not use insurance but absolutely no type of discount.


How we handle this is pretty much like what Debra said.  If client has insurance but doesn't want to use it, they can certainly self pay, but they receive no type of discounts.

Wow, that is scary.  Do you have clients sign a waiver stating they choose to not use their insurance benefits?

Did the insurance company look into why the client didn't use their insurance benefits and get the claim from your clinic, especially if you were in network/contracted?  

It is true that there may be a cost savings by utilizing insurance benefits.  But if the client can afford to, and chooses to private pay without any discount, isn't that their right?

Trying to find the balance in all of this; for the client's rights and also protecting our business.   

Has anyone ever thought that there are 3 contracts between the payer, entity, and client.  Which would take precedence?  The clients contract with payer, our contract with the client, or our contract with the payer? 


That is exactly why we let them self pay.  In all of this as a clinic we feel that the client has a right to choose.  We are not going to force them to use their insurance.  However Medicaid is a whole different story.  If the provider has a Medicaid number they can not have the client self pay.

In my experience, I've never had a client that has Medicaid that WANTS to private pay/self pay........But that is good info, so thank you!

We did not have them sign a Waiver at that time.  The insurance check actually came to us and that is how we found out!

What about Tricare patients?  With active duty members we are supposed to send the notes to the base every time they are seen due to PRP status.  If they self pay, then are you still required to do this?  We have active duty members that try to do this to get around the base knowing they are coming in.  We do not allow it?  Now with Tricare changing their carrier our provider will no longer be reimbursable, so family members still want to come in and self-pay.  My concern is that Tricare is government and you are required to bill them.

This is probably a dumb question, but do you require releases for possible one time/ private pay patients? There is discussion that you don't need to since you aren't sharing information with insurances, etc. but I'm cautious and thinking it'd be a good idea to have it, just in case. What are your thoughts? You all have some great information :)

Our Consent Form covers billing insurance, but is also consent for treatment, financial responsibility, acknowledgement of Privacy Practices, physician release, etc. We make everyone complete the form prior to being seen. It's a good layer of added protection, just in case something comes up later.