“Health insurance 101” is back in session! In part one, we went over some common insurance terms you should know in order to help you understand your insurance. Many Americans don’t understand their medical bill or insurance, even some doctors like me, but that doesn’t mean you’ll never make sense of it. I hope to help you clear up any confusion you have about the basics of insurance and medical bills.
Let’s start with the part everyone wants to know first — understanding those different charges on your bill.
Doctor’s charges vs. insurance allowable rate: The amount charged to the insurance is never what is actually paid to the provider or hospital. The amount we doctors charge is NEVER what we are actually paid. It’s a little like Manufacturer’s Suggested Retail Price (MSRP): the only amount that actually matters is the insurance allowable or contracted rate with our practice.
Let me explain this further. If we are contracted, or “in-network,” with the insurance company, the difference between our charges and the allowable rate is “written off,”meaning that it just disappears. For example, the charges for an office visit may be $200, but the contracted rate is $120. The $80 difference is written off.
How doctors and insurers determine charges:
Before your visit: In my office, our billing specialist verifites your insurance and benefits and what percentage of your deductible has been met, along with your co-pay and co-insurance amounts. The specialists then gives you that information, which is an estimate and may be subject to change based on your insurance provider as there is no guarantee of payment.
After your visit: Our billing specialist submits a claim or bill to your insurance company. A claim lists the services provided to you. Your insurance company uses that information to pay us for those services based on our contracted allowable amount.
Once the claim has been filed and before we’re paid by your insurance company, you may get a report from your insurance company called an Explanation of Benefits, or EOB. An EOB is not a bill, so put away the wallet for now. You will just need to be able to read it to understand what your insurance company is paying for, not paying for, and why.
Another piece of paper, but don’t get confused yet:
Either before or after getting your EOB, you may receive a statement from us that shows how much we billed your insurance company for the services you received at our office. Again, this amount is how much we billed, not what we will get paid so do not pay the amounts listed at that time. If we are contracted or in-network with the insurance company, the difference between our charges and the allowable rate is ‘written off’, meaning that it just disappears.
After your insurance company pays us, we will then send you a statement with any balance due of the allowed amounts. For example, your co-insurance percentage due, or your deductible was not met and the insurance did not pay for the services or only a portion based on how far along to your deductible being met, but did put the amount towards your deductible.
An example of an EOB:
Helpful EOB definitions
- Service/product description— What you received from your provider.
- Dates you received service/product— When you saw your provider (month/day/year to month/day/year).
- Charges billed by provider— Amount billed to you and your healthcare plan(s).
- Provider’s fee adjustment— Difference between “charges billed by provider” and the amount providers have agreed to accept as full payment; see message codes at the bottom of your EOB for details.
- Your copay, deductible or amount not covered—
- “Copay” is a set fee you pay a provider at each visit
- “Deductible” is how much you pay each year before your benefits start
- “Amount not covered” applies to services or products not covered by your plan
- See message codes at the bottom of your EOB for details
- Total amount eligible for benefits— Provider’s billed charges adjusted to the provider’s contracted fee, copay, deductible or amount not covered; see message codes at the bottom of your EOB for details.
- %— Percentage level of benefits for covered services or products.
- Your coinsurance amount— What you must pay the provider after we pay the covered percentage.
- Adjustment— See message codes at the bottom of your EOB for details.
- Total benefits from your plan— Charges billed by provider or Total amount eligible for benefits, not to exceed billed charge “minus” Your coinsurance/Adjustment amount.
- Amount you’re responsible for— What you must pay of the billed charges after plan benefits are paid. If you received payment intended for a provider, it is your responsibility to pay the provider.
- Provider— The name of the doctor or other provider of your healthcare services.
- Message codes— Provides information about a specific charge or how a claim was processed. A description of your plan’s benefits as it pertains to the service/product listed on the EOB.
Wow – this is complicated to say the least
We will do our best to provide you the information about what you may have to pay out of pocket. Again, it’s not a guarantee, but an estimate as things may change with your insurance that is out of our control.
When you are trying to figure out what your insurance company will actually pay and how the insurance company breaks down your financial responsibility, what will go to your deductible and what will go to your co-insurance, you will need to figure out how much of your deductible and/or out of pocket expenses have been met, all your visits to doctors, etc. been included up to this date and then do the math.
We do our best to hold our costs down, however healthcare is expensive, just imagine the number of people employed by doctors’ offices, hospitals, surgery centers, insurance companies, pharmacies and other healthcare organizations whose only job is to figure this out.
At CSCC, we have a billing department of 10 team members who for the majority of their time, all they do is work with insurance companies to get benefits verified, services authorized, filing claims with insurers, setting up peer to peer conferences when a service is denied, claim denials or errors that come back to our office.
I realize this is a lengthy blog, however, I feel it is so important to educate our patients or prospective patients as best we can, as the insurance billing process is complicated.
Additionally, regarding PAP machines for the treatment of sleep apnea – some insurance companies are now paying monthly rental fees for 10 to 12 months for their members and requiring ongoing compliance data to ensure patients are using their machines properly and their health is improving. The follow up visits regarding compliance to our office are required by those insurance companies – as health care dollars are valuable, and insurers want to ensure the patient is using the PAP machine in order to continue to pay for a patient’s PAP and supplies.
If you have questions or want to make an appointment to talk with our sleep specialist, please call us at 703-729-3420 or contact us online at www.comprehensivesleepcare.com. You can also leave us questions and comments on our Facebook page or tweet to us.