Out-of-Pocket Medical Expenses

We have many requirements when it comes to healthcare. These requirements include out-of-pocket medical expenses. There are three different types. This article will discuss and compare each.

Copays

A copay or copayment is a fixed, out-of-pocket amount that patients are required to pay for healthcare, typically at the time of service.

However, not all patients have copayments, such as Medicare Part B patients. I have Medicare Part B, so I pay for my premium, and I have no copayment. A patient under Medicare Part C could have a copayment. Three hundred seniors live near me, many of whom have a Medicare Part C plan, and they all have a $50 copayment. For many of them, it is difficult to find a medical provider who accepts their insurance. One of my neighbors came to my apartment and asked me to look up a medical practice 50 miles away that accepts her insurance. I informed her that there is a practice within walking distance from our complex, but she said she can't go there because their doctors don't accept her insurance. I was unable to drive her the 50 miles, so she went from apartment to apartment asking others, but no one could or would take her—unfortunate when you need care. I went back to the internet and verified that a new healthcare practice near our building accepts her insurance, but she refused to go because she had a $50 copay and couldn't afford it. I then suggested that she walk the mere 200 feet to the local emergency room; per EMTALA, once she walks in, they are required to treat her until she is stable enough to be discharged. I told her that per her health insurance, she does have a $50 copay, but she could be billed for it, and when the bill comes in, to contact the billing company and arrange timely payment. She didn't like that idea either. She asked me how I knew this, and I informed her that I used to be the office manager for that billing company. While I did try to help her, ultimately, her insurance requires a copay, and it is her responsibility to pay it.

Coinsurance

Coinsurance is what you pay after your primary insurance pays for your medical care.

This is the percentage of medical care costs for services that patients pay after meeting their deductible. A typical coinsurance is 20%. I have Medicare Part B as my primary health benefit plan or health insurance. I pay 20% for my healthcare costs out of pocket for coinsurance, and my Medicare Part B plan pays 80% of the allowed medical bill. Medicare submits an Explanation of Benefit (EOB) to my secondary insurance. My secondary pays the remaining 20%, which is my coinsurance. This is very helpful because, between both plans, 100% of my medical care is paid.

This does change when I see a doctor who is not honest with me by having me undergo medical care without my knowledge or permission, so he can bill me for medical care that is not covered. I am cognitively disabled, so I always have a family member with me at all medical care visits. My primary care provider sent me to see a specialist. My late wife went with me. The specialist took me into one of the private rooms, and my wife was told by his receptionist and nurse that she was not allowed in the room, per the “hippo” (HIPAA) law. The specialist performed tests that were not covered services under Medicare or my secondary insurance, so I received an expensive medical bill. Even though I am now cognitively disabled, per my neurologist, my medical billing knowledge didn't disappear. So, in the short term, I requested my medical records, which the doctor denied. And in the long term, the Department of Health intervened, as well as the FBI, for fraud.

Deductibles

A health insurance deductible is an out-of-pocket expense that a patient pays for covered services each year before insurance pays. Deductibles usually start in January of each year. A patient must meet their annual deductible before their health insurance claim is paid. After it is met, patients typically pay only their copay and/or coinsurance.

Some doctors will try to bypass insurance by delaying a claim. The problem with delaying the claim is the timely filing limits. Once delayed, the claim is denied, and once denied, the patient is usually informed that they need to pay for their visit out of pocket. The patient will contact their insurance company, and one thing about insurance companies, they do not and will not accept excuses. “I'm sorry; we couldn't send this claim because we are overstaffed/our biller quit” doesn't work. That is not the insurance company's problem. They are there to process the claim for payment or denial. If the insurance company denies a claim due to untimely filing, patients may contact state and federal regulatory agencies, which results in investigations and potential sanctions.

There is another secret behind deductibles. Providers know when a patient's deductible is due, and some of them are more focused on their practice's administrative and financial workflow than the patient's health. Oftentimes, when a patient has a November or December appointment, they have met 100% of their deductible, and some providers will contact the patient and tell them that their appointment needs to be rescheduled for January. When I receive a call to change my appointment to January, I simply tell them that there is no need to reschedule my December appointment, as I won't be returning. I follow through with a certified letter, terminating the provider and our relationship.

A Medical Biller's Experience: Personally and Professionally

In every billing class I taught, I told my students that doctors are not an extinct species. The doctor who chooses money over care does become an extinct species. Two and a half years ago, my wife developed cancer for the third time. She was given appointments to see every doctor in the practice. That was seven doctors, each visit with a $150 copay. That was $1,050 for all seven visits, and then each doctor wanted to see her every two weeks. That was over $2,000 a month just for her copays. Each doctor spent mere seconds with her and conducted no physical exam, just pecked on their laptop. My wife went into the hospital on May 17, and two weeks later, she was dead. The next day, still in total shock, while at the funeral home, my cell phone rang from the office manager, “Mr. Verno, Dr. Smith wants to see your wife at 1:00 today; please don't forget your $150 copay.” I didn't say a word. The office manager didn't care; it was his doctor who was in my wife's hospital room and saw me holding my wife's hand for the last time as he informed me that my wife was now dead. Two weeks later, I received a medical bill for $500 for a missed visit. I began to block all of those doctor visits. The doctor's medical biller sent me another bill for $5,000. There is an old medical billing tactic that informs the patient that if they don't pay their bill immediately, their medical debt will be sent to a debt collection agency. Once that debt goes to a debt collection agency, their debt will be reported to credit bureaus, and it could affect everything—seized bank accounts, garnished wages, loss of home, and worse. One thing I have learned in my 73 years of life, if you have nothing, all their threats mean nothing. When I got those nasty letters and letters from their attorneys, I immediately consulted with a local lawyer and filed for bankruptcy. Once the judge signed the bankruptcy order, all of my wife's medical bills were wiped clean. When I worked in medical billing, I worked for one of the best medical doctors I've ever met. He had a longstanding policy to work with patients to resolve their medical bills. That physician/patient relationship matters.

One of my jobs in medical billing was to monitor patients who were financially disabled. I had an 80-year-old grandmother whose grandson was shot in a gang-related shooting. His medical bill was in the thousands. He lived with his grandmother, who lived in a rundown shack. She arranged a payment plan to pay $5 a month. The doctor agreed to accept it, and he knew that the cost of the payment plan was more than the payment made. But she paid the $5 on time and without fail. Once a week, her case was discussed between the doctor and me. He asked me if there was anything I could do to help. I sent paperwork to Medicaid, arranging for the patient to be provided with Medicaid, backdated to his date of injury. In two weeks, all of his medical bills were paid in full. I also went to the Social Security office and helped him apply for disability. It took eight months to be completed, but he was approved for Medicaid and Social Security disability. He was also a student in my medical billing class, to ensure a bright future.

Conclusion

We have discussed that copays, coinsurance, and deductibles are mandatory out-of-pocket medical expenses.

This always raises more questions, but I try to answer simply:

• Is it legal to forgive a mandatory out-of-pocket medical expense?
  
  I am not a lawyer; I am a medical biller. These mandatory out-of-pocket medical expenses are all based on a health insurance legal contract between the patient and the insurance company. As a medical biller, I am not a signatory to any contract. What I can do is meet with the patient and calmly discuss their financial situation. I also do the same with my boss, the provider. Between us, we have the option to write off a medical bill due to financial hardship, or we can arrange low-cost, timely payments. Our goal is to keep the patient healthy—physically and financially.
  
  
• Is it legal to place a sign at the reception desk to inform the patient about their out-of-pocket expense(s)?
  
  Again, I am not a lawyer, so I cannot say if something is legal or not. But use common sense. If you want to keep your patients informed, especially in the area of finance, you communicate. Yes, I've walked in an office many times and seen a nice, printed sign that reads: “PAYMENT IS DUE AT THE TIME OF SERVICE.” But over time, your patients often ignore those signs. I recommend that before a patient makes an appointment, send the patient a copy of the doctor's financial policy. It discusses health insurance, out-of-pocket expenses, and financial issues, such as debt collection. The policy leaves no stone unturned. The key to a financial plan is patient/provider communication, and the key to communication is caring. Patients are not numbers on a spreadsheet or a medical bill; patients are people, and people keep a practice alive.

It is time to understand and educate your patients and medical billers alike on out-of-pocket medical expenses. Education is the keystone to success.

Never give up and never surrender.

Source: Steve Verno is a retired professor of medical coding and billing. Contact Steve: steve_verno@yahoo.com