This article is about insurance claims and how they work. See Part 1 of this series for any insurance terms and background information.
After you visit the doctor, if it's an in-network doctor, a claim will get filed for you to your insurance company. This filing is done by the doctor's billing office, and is almost always done electronically. Electronic claims are subject to federal law regarding the information that is required and how it's formatted. This is a good thing for you, because it means there's little possibility of it getting screwed up. On the claim there's information about you, the doctor, where the service was rendered, who the insurance company is, what services were rendered, what the doctor's official charges are, and so on.
The insurance company takes the information from the claim to find you and the policy you are insured under so it can pull the correct benefits for paying your claim. It also uses the information about the doctor to identify the network so all the information related to the network agreement can be brought in as well.
At the end of all this, here's what the insurance company determines:
1) Which services are covered and which, if any, are not covered.
2) The negotiated allowed amounts for all the covered services.
3) What copay, if any should be applied for the services
4) What deductible amount, if any, applies for the services
5) What coinsurance, if any, applies for the services
6) If there are any of a variety of other things that need to be considered: max payments, out-of-pocket limits, etc.
Which is a fancy way of saying that the money, the charges submitted by the doctor, get divided into three basic chunks:
Provider Write-off: This is the non-covered amount, the amount the doctor agreed to forgo in return for being a member of the network.
Subscriber Liability: This is the amount you have to pay the doctor due to non-covered services, copays, deductible, coinsurance, etc. See below for some definitions of these terms.
Payer Liability: This is the amount that the insurance will pay the doctor as part of your benefits.
The insurance company then sends out the results of the claim processing. You will receive an EOB, or Explanation of Benefits. It lays out the specifics of how they decided the claim should be handled, and you will see information that matches the items described above. This document will also state how much money the doctor can bill you within the terms of the network agreement. This is important. You should ALWAYS review your EOBs and compare them to the bills you get from the doctor. Or how much you paid them when you were in the office.
The insurance company also sends this information to the doctor's billing office. This document is called a remittance, and describes again how the charges got divided up. Some offices get paper remittances mailed to them, others get an electronic version: but the information is the same. How much goes to write-off, how much you the member can be billed for, and how much the insurance company will pay. It's very common for remittance information to be bundled together - in other words, the doctor may get a combined remittance that has information about all the claims that were submitted and processed within some period of time, like a week.
So now, you and the doctor know what's what. What could possibly go wrong? Stay tuned for Part 3 and find out!
A few more terms:
Copay: a flat fee that accompanies specific services. For example, you may have a $25 copay for any visit to your primary physician, and a $60 copay for a specialist visit. You have to pay this every time, and they don't add up towards any kind of limit. However, it comes out of the allowed amount for your visit.
Deductible: This is a dollar amount which must be satisfied by you before the insurance company will start to pay, depending on the service. Insurance policies vary widely as to which services are subject to deductible and which are not. Really, this is all over the map and you have to read your benefit booklet to know how your plan is set up. Again, though, the deductible only applies to allowed amounts.
Coinsurance: A percentage that usually kicks in after the deductible has been met. For example, it's pretty common that a covered service is subject to deductible, then after that the insurance company will pay 80% of the allowed amount. This would be described as "Deductible, then 20%".
This Series:
Part 1 is a description of fee-for-service health insurance in the US, including lots of boring terminology.
Part 3 describes my personal experience of how a medical practice tried to cheat ME.
Summing Up: Don't Let them cheat you
Sunday, March 20, 2011
Friday, March 18, 2011
Is Your Doctor's Office Trying to Cheat You? Part 1
I don't believe most doctors are trying to cheat their patients. However, I have way less faith in medical group practices, which are businesses that have little direct relationship with patients. Very few doctors can afford to have stand-alone practices, so they join groups. These docs are disconnected from the business side of things and probably have no idea when fraud is being perpetrated.
Knowledge is power, and in this case, knowledge can save you money. Those who are trying to cheat you are counting on your ignorance. I'm going to give you just a few basic definitions so you will understand the things I'll explain later.
First, let me clarify: I'm talking specifically about fee-for-service coverage for doctor visits in the United States. If you live in some other country, chances are good that you don't have to care about any of this because it will never apply to you. Ditto if you are in the US but have insurance like Kaiser, Group Health, or some other self-contained HMO like that. Lucky you! I had Kaiser when I lived in Hawaii and I loved it.
So, on with the definitions. Some of these are industry-standard, some of them may vary according to who you are talking to. BUT the concepts are the same regardless.
Service: something that can be billed for by your doctor or other medical provider. These include things like office visits, lab tests, X-rays, out-patient surgical procedures, supplies used during your visit, etc.
Covered service: A service that is included in your insurance policy. Even if you have to pay for a covered service yourself, it "counts" in the insurance company's eyes. I'll explain more about this later.
Non-covered service: You are on your own with one of these - it is not covered by your policy, the insurance company will flat out reject any claim for it, and your payment will not count towards any deductible or out-of-pocket limit you may have to accrue.
Provider Networks: Doctors and health insurance companies enter into mutually beneficial relationships. The doctor agrees to take reduced payments in return for the insurance company steering business their way. The insurance company refers to these relationships as "networks", and each network has terms and conditions that are specified in the network agreement. These are contracts that both parties must abide by.
Non-covered Charges: the charges for non-covered services. You the member are always going to have to pay these in full.
Covered Charges: the charges for covered services. These amounts generally get divided up into different chunks, described below.
Allowed Amount::This is also known as the approved amount. These are the amounts that the in-network doctor has agreed to accept as payment for covered services rendered to members of the insurance company. Any money that comes out of your pocket is based on this amount, and applies to it.
Non-covered Amount: This is known under HIPAA as Provider Write-off under Contractual Obligation. It's the amount between the doctor's normal charges and the agreed-on network allowed amount. Under most network agreements the doctor is not allowed to make you pay this difference.
Balance Billing: What it's called when the doctor bills you for the non-covered amount described above.
OK, that's enough for now. Coming in Part 2 - How Insurance Claims and Payments Work.
This Series:
Part 2 is a description of how health insurance claims work, and how to tell what you should pay the doctor.
Part 3 describes my personal experience of how a medical practice tried to cheat ME.
Summing Up: Don't Let them cheat you
Knowledge is power, and in this case, knowledge can save you money. Those who are trying to cheat you are counting on your ignorance. I'm going to give you just a few basic definitions so you will understand the things I'll explain later.
First, let me clarify: I'm talking specifically about fee-for-service coverage for doctor visits in the United States. If you live in some other country, chances are good that you don't have to care about any of this because it will never apply to you. Ditto if you are in the US but have insurance like Kaiser, Group Health, or some other self-contained HMO like that. Lucky you! I had Kaiser when I lived in Hawaii and I loved it.
So, on with the definitions. Some of these are industry-standard, some of them may vary according to who you are talking to. BUT the concepts are the same regardless.
Service: something that can be billed for by your doctor or other medical provider. These include things like office visits, lab tests, X-rays, out-patient surgical procedures, supplies used during your visit, etc.
Covered service: A service that is included in your insurance policy. Even if you have to pay for a covered service yourself, it "counts" in the insurance company's eyes. I'll explain more about this later.
Non-covered service: You are on your own with one of these - it is not covered by your policy, the insurance company will flat out reject any claim for it, and your payment will not count towards any deductible or out-of-pocket limit you may have to accrue.
Provider Networks: Doctors and health insurance companies enter into mutually beneficial relationships. The doctor agrees to take reduced payments in return for the insurance company steering business their way. The insurance company refers to these relationships as "networks", and each network has terms and conditions that are specified in the network agreement. These are contracts that both parties must abide by.
Non-covered Charges: the charges for non-covered services. You the member are always going to have to pay these in full.
Covered Charges: the charges for covered services. These amounts generally get divided up into different chunks, described below.
Allowed Amount::This is also known as the approved amount. These are the amounts that the in-network doctor has agreed to accept as payment for covered services rendered to members of the insurance company. Any money that comes out of your pocket is based on this amount, and applies to it.
Non-covered Amount: This is known under HIPAA as Provider Write-off under Contractual Obligation. It's the amount between the doctor's normal charges and the agreed-on network allowed amount. Under most network agreements the doctor is not allowed to make you pay this difference.
Balance Billing: What it's called when the doctor bills you for the non-covered amount described above.
OK, that's enough for now. Coming in Part 2 - How Insurance Claims and Payments Work.
This Series:
Part 2 is a description of how health insurance claims work, and how to tell what you should pay the doctor.
Part 3 describes my personal experience of how a medical practice tried to cheat ME.
Summing Up: Don't Let them cheat you
Thursday, March 17, 2011
My Heart is Heavy and Sad
I hope your month is going better than mine.
I don't know how much more I can take right now. All I see around me are greed and corruption and fear and hate. Power gone mad. The tragedy in Japan, compounded by the potentially worse tragedy if things go wrong-er at the nuclear plants. Cheating and lies and cronyism and intimidation and willful disregard for others' well-being.
An acquaintance of my husband's was murdered - shot - yesterday, along with her two children, by her drunken ex-fiance, who then committed suicide.
My own doctor's office tried to cheat me out of money that they are not legally allowed to collect. And because of the way it happened, I'm certain that they are doing the same thing to other people, who are probably paying because they don't know any better. I actually had to get my insurance company to step in to fix it for me.
So my next couple of blog posts will be about health insurance as it works in the US and how to make sure that YOU are not getting ripped off by unscrupulous billing.
I don't know how much more I can take right now. All I see around me are greed and corruption and fear and hate. Power gone mad. The tragedy in Japan, compounded by the potentially worse tragedy if things go wrong-er at the nuclear plants. Cheating and lies and cronyism and intimidation and willful disregard for others' well-being.
An acquaintance of my husband's was murdered - shot - yesterday, along with her two children, by her drunken ex-fiance, who then committed suicide.
My own doctor's office tried to cheat me out of money that they are not legally allowed to collect. And because of the way it happened, I'm certain that they are doing the same thing to other people, who are probably paying because they don't know any better. I actually had to get my insurance company to step in to fix it for me.
So my next couple of blog posts will be about health insurance as it works in the US and how to make sure that YOU are not getting ripped off by unscrupulous billing.
Subscribe to:
Posts (Atom)