Understanding Patient Responsibilities – Deductibles, Co-pay, Co-insurance
Health Insurance – How to make sense of everything
- Co-Pays, Deductible, Co-insurance, Out of Pockets, all of these things can seem very overwhelming at first and hard to make sense of. In this blog piece we’re going to go over and breakdown different aspects of insurance benefits that can impact your practice’s cashflow and income. Having a skilled, detail orientated medical biller also ensures that the insurance company’s errors are noticed and corrected as soon as you receive claim payment.
- Before providing services to a patient, it’s always a good idea to verify their specific benefits prior to the session. This will inform you of what the insurance and patient’s financial responsibilities are for their visit.
- This is beneficial in both cashflow and capturing the patient’s responsibility prior to the appointment. It also is extremely useful when reviewing the insurance EOB (Explanation of Benefits) to ensure that they processed the claim according to the patient’s benefits.
- Unfortunately, a lot of times these claims processing errors will go unnoticed to an unskilled medical biller. Having a confirmation number of the verification of benefits is extremely useful in having the claim reprocessed and paid. Without that, the insurance can just simply say they made a mistake and “oh well”. That’s going to cause stress for both you the provider, and your new patient.
- Co-Pay – A Co-pay is a fixed amount that your patient would pay for each session. The co-pay would not vary and would remain consistent for the benefit period.
- Deductibles – A deductible is a set amount that the patient will pay out of their pocket before the insurance company will pay for any allowed services. The amount that applies to the deductible is also based on your contracted fee schedule with the insurance.
- Example: John has a $1,000 deductible, with $130 remaining for the year. He sees an LCSW for individual sessions. If you bill $150 for an individual therapy session, and your contracted allowed amount is $130, his insurance will apply $130 to his deductible and will use the remaining $20 as a provider write-off.
- Co-insurance – Co-insurance is a set percentage of costs of a covered health care service that the patient is responsible for, after their deductible is met. The percentage of co-insurance varies by plan, and service. Common Co-insurance amounts include 10% – 60% co-insurance depending on the plan and in-network status. The co-insurance percentage is based on the contracted allowed amount set by the insurance carrier. The patient would be responsible for their co-insurance percentage, and the insurance carrier would process and pay the remaining percentage. (20% co-insurance for patient responsibility, the remaining 80% is to be paid by insurance. 15% co-insurance / 85% by insurance, etc)
- Example: Now that John’s $1,000 annual deductible is met, his second session would then be subject to his 20% co-insurance. His insurance would pay 80% of the allowed amount, and John would pay the remaining 20%
- In this example, a provider with a $130 in-network contracted amount for 90837 would expect a payment of $104 from his insurance, and John would be responsible for $26 per session, for his 20% co-insurance.
- Out of Pocket – An out of pocket is the maximum amount a patient can expect to pay out of their pocket for their benefit period. (Most plans have a benefit period of January 1st to December 31st) This will include any claims that applied patient responsibility in the form of deductible, co-pay and co-insurance. If the patient were to meet the limit on the out of pocket, their insurance would then cover services in the benefit period at 100% with no patient financial responsibility.
- Verifying a patient’s benefits will help you and the patient better understand what services will contribute to the annual out of pocket. Each plan has different requirements and guidelines, and it is important to have confirmation from the insurance carrier.
- Now that you have a better understanding of both the insurance and patient’s responsibility, your medical biller has the knowledge to know and detect when the insurance is underpaying or incorrectly processing your claims.
0
