Prepayment of Medical Expenses: FSA Eligibility

Prepayment of Medical Expenses: reimbursement is not eligible with a Flexible Savings Account (FSA)
Expenses must first be incurred to be eligible so prepayment of medical expenses is typically not eligible for reimbursement with a flexible spending account (FSA), health savings account (HSA), health reimbursement arrangement (HRA), limited-purpose flexible spending account (LPFSA) or a dependent care flexible spending account (DCFSA). Check with your administrator for exceptions and details.

What is a prepayment of medical expenses?

When a patient sees a doctor or visits a specialist, in some cases they may ask for a prepayment of medical expenses. This is done for a variety of purposes, but for most medical facilities, asking for a prepayment of medical expenses is a means of generating a minimum income during leaner months of the year to avoid relying on credit or savings to stay afloat. However, it's important to note that patients do not have to adhere to these policies, and in the case of consumer-directed healthcare account holders, payment for medical services with these funds is only possible when a product or service has been incurred and proper documentation is available for reimbursement.

In the case that a medical practice requests a prepayment of medical expenses, prospective patients have a few options to consider. First, for those who are enrolled in government-issued coverage (Medicare, Medicaid, Tricare), the Centers for Medicaid and Medicare Services (CMS) has ruled that patients may not be asked for any upfront payment before a claim has been processed. Those who are covered under a commercial or employee-sponsored plan should also wait to receive a statement, as most of these plans will not cover advanced payments or it is unlikely that the account holder has met his/her deductible.