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
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