November 08, 2010
When someone has healthcare through insurance, whether self purchased, provided through the government such as Medicare, or non-workers compensation insurance from an employer, we can't assume anything. Providers, coders, and billers may have no clue about the benefits they are to receive, what benefits are excluded, how much the service costs, how much the insurance company pays for the care, and what is the claims process when seeking care from a network and out of network provider. One of the most misunderstood part of healthcare is the patient out of pocket expenses. This is money to be paid by the patient that is in addition to the premiums. There are at least three (3) out of pocket expenses. These are (1) co-pay, (2) co-insurance and (3) deductible.
Co-pay or Copayment: A co-pay is an amount that is to be paid, by the patient, at the time of service. The following is from an Aetna benefit manual: "A copayment is the part of the medical bill that you must pay. A copayment is usually only a small amount of the cost of the service. Providers will ask you for the copayment amount when you get services. The copayment can be anywhere from $15 to $100 per visit and it varies based on services being provided and it can change from year to year. For example, the following is from the same benefit manual: "There are no copayments for medicines. Do not pay any copayments as Aetna cannot pay you back." Sometimes I hear, " A patient told us that they didn't have to pay their copy because their secondary insurance pays for it. Is this true? Maybe and Maybe not. It all depends on their policy with their secondary. If you had a copy of the benefit manual, you may be able to verify this. Just remember, if it isn't documented, it doesn't exist and just because a patient said something, this doesn't mean it is true. Again, a co-pay is a patient out of pocket expense.
Coinsurance: A contractual requirement to pay X% of the medical treatment. The coinsurance is a separate out of pocket expense from the copay. Some policies have an 80-20 plan. This usually means the insurance pays 80% of the allowed expenses and the patient pays 20% of the allowed expenses. So, if the allowed expense is $100, the insurance pays $80. The coinsurance may also require the patient pay any amount above the allowed amount. This usually happens with HMO, PPO, or POS plans when the patient makes a freedom of choice decision to seek care from an out of network, non-contracted or non-participating (non-par) provider. The charge may be $200. The insurance company may allow $60. The plan pays 80% of the allowed amount. This means the insurance pays $48. The patient not only pays 20% of the $60 or $12 but the patient also pays the $128 difference between the charge and allowed amount, so the patient pays $140 for the visit. Some policies may have a $Zero coinsurance. The policy may pay 100% of the charges after the copay and after the deductible have been met. Another question that is asked is, will a patient's secondary pay the primary's co-insurance? That depends on the secondary's policy. You wont know unless you have the secondary process the claim or you read the benefit manual for the claims payment terms. Some may say all they pay is no more than what the primary paid. If this is so, then look up your State Coordination of Benefit Law. The law may state that the insurance company pays the difference between the charges and primary payment, but the combination of the primary and secondary payment is no more than the total of the original charge.
Deductible: A Deductible is the contracted amount the patient pays out of their own pocket before their insurance begins picking up any of the costs of health care. Whether the patient actually pays or not is of no concern to some insurance companies. Some deductibles begin in January with the Calendar Year, some begin in October with the Fiscal year. Not all deductibles are equal. Some policies have multi-tiered deductibles. Patient A may have a Tier 1 deductible of $300. Patient B may have a Tier 2 deductible of $1,000. Some patients may see a deductible go from $250 to $5,000. If the patient has primary and secondary coverage, will the secondary pay the primary's deductible? Again, the answer is up to the patient's policy. Usually the amount of deductible is based on the cost of the premium. The higher the premium, the lower the deductible and vice versa. Some patients may pay a very small premium amount, causing the payment of the visit to be applied to the high deductible. The patient may call you to try to get you to write off the deductible. It has been my experience that the people who have done this were doctors, hospital employees such as nurses, hospital executives or other doctor staff members. Some doctors want to hold sending claims, hoping that other claims will reach the insurance company and will be applied to the deductible. This can cause problems. The claims may be forgotten and the time to submit them has gone past contracted or statutory claim submission timeframes. The patient may not have sufficient visits to meet the deductible requirements. It is best to submit all clean claims within a timely filing limit. It is also not adviseable to routinely write off any deductibles that are owed. Again, a deductible is a requirement based on a legal and binding contract or Federal Law.
I wrote this after meeting with one of my providers who had no clue about all her out of pocket expenses. She thought all she had was a $300 deductible, which she met, and now she is getting a bill for several thousands of dollars. So, imagine the confusion your patient may have about their out of pocket expenses. When some people become confused, they become angry. It helps to speak with your patient to inform them about more than their medical health. You can be assured their insurance company wont tell them. I know because I've been in those so-called health insurance briefings. It has been my experience that those briefings are pitches to sell more insurance. I've also found that speaking with the patient about these out of pocket expenses, allows the patient to become better informed.