A discount fee is the difference between what a buyer pays for a claim and what that claim ultimately collects, disclosed upfront as the buyer's compensation for purchasing the claim.
What it means
When a buyer purchases a claim, it pays the provider less than the claim is expected to collect. That gap is the discount fee. It is the buyer's compensation for purchasing the claim and carrying it until the payer settles, and it is set and disclosed at the time of purchase.
Because the claim is bought rather than borrowed against, the discount fee is a flat, known amount, not a rate that compounds over time. There is no interest and no repayment schedule, since the provider is selling an asset it already owns rather than taking on debt.
This is what separates a discount fee from loan interest. Loan interest grows the longer a balance stays unpaid. A discount fee is fixed at purchase and does not change based on how long the payer takes to pay.
Why it matters for your practice
For a practice owner, a disclosed discount fee means you know your exact cost before you agree to anything, with no surprise interest building if a payer is slow. The fee is the price of getting paid the next business day instead of waiting 30 to 90 days, and because it is fixed at purchase, the math does not move on you later.
How this relates to Copay
When Copay purchases your eligible claim, the discount fee is disclosed upfront and is Copay's compensation for buying the claim. There is no interest and no repayment schedule, because this is a purchase, not a loan. If a payer takes longer than expected, your fee does not grow.
See how Copay works.
Written by Eitan Glick, CEO, Copay Inc.
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