Sunday, August 2, 2009

Know your benefits

Healthcare is expensive. Even without getting into the complicated discussion of the uninsured and under-insured, I can tell you both as an employer who pays for health insurance for employees as well as someone who has a high-deductible insurance plan, healthcare can be very expensive.

My dad says, "the best, most compassionate way to reduce the cost of healthcare is to make Americans healthy."

Obviously, if you're sick and/or unhealthy, you cost more. You cost more to yourself, to your insurance company, and to the healthcare system in general.

But, we also spend a whole lotta money in this country proving that healthy people are still healthy.

Aside from achieving and maintaing health, another way to reduce the cost of care is the know your insurance benefits.

Many, many people make the mistake of assuming that whatever their doctor orders will be covered by their insurance. And, maybe it is, but that doesn't mean it still won't cost you a good amount of money (out of pocket).

One of the most common billing questions I get is, "why didn't my insurance pay for this?"

The first question to ask is, "did the insurance approve the charge and just apply it to your deductible?" Or, did they just flat out deny it as non-covered and/or not medically necessary?

I'll address the deductible question first. Most plans these days have a deductible. For the sake of simplicity, a deductible is defined as the amount of expense that must be paid out of pocket before an insurer will cover any expenses. The average individual deductible is $250-500. This means that you (the patient) must pay the first $250 of your healthcare expenses during the plan year.

When you receive your EOB (Explanation of benefits) from your insurance company, it will detail what the charge was, how much was approved, what amount went towards your deductible, and what amount is your responsibility. Just because the insurance didn't pay for the service, doesn't mean it wasn't covered. It may be a covered service, but chances are, you haven't met your deductible. If a service is covered and applied to your deductible, then the provider will likely take a write-off (or adjustment for the CPAs out there).

Let's say you see the doctor and the office visit charge is $70. The doctor has a contract with your insurance company and agrees to provide office visits for $55. The maximum the office can collect for your visit is $55. The remaining $15 ($70-55) is written off by the office.

How the remaining $55 is paid depends on if you've met your deductible or not. If you haven't met your deductible, you'll be responsible for the entire $55. Chances are, you already paid your $20 copay at the time of the visit, so you'll likely receive a bill for $35 ($55-20=35).

If you've already met your deductible, then you're only responsible for the $20 copay. The insurance will write a check to the doctor's office for the remaining $35.

So, if receive a bill for a service thats more than the copay you already paid, it's likely that your deductible hasn't been met and you're responsible for the bill. The bill will most likely be for less than the charge (b/c remember that the doctors office probably has a contractual write off they take).

Sometimes, though, you'll receive a bill for the ENTIRE charge. There are a few reasons why a charge is flat out denied by your insurance. I've listed two common denials below:
  1. The insurance determined that the service wasn't "medically necessary." When people say that your insurance company has become your doctor, this is why- the insurance can determine if a procedure or service was medically necessary or not. Even if your doctor writes a nice letter to the insurance and states the service provided was medically necessary and why, the insurance can still deny the claim. This happens most commonly when a mole or skin tag is removed. The insurance company's position is that the mole was removed for cosmetic, not medical, reasons. Skin tags are notoriously denied as being not-medically necessary (even if the skin tag was located on your chest, right where your seat belt lies, rubbing over the tag, making it painful and irritated).
  2. Your policy doesn't cover the service. In Family Practice, immunizations are one of the most frequent "non-covered" services denials. Know your insurance benefits! Unfortunately, most people assume their immunizations are covered and its not until they receive a bill for $300-500 that they realize their policy doesn't cover immunizations. Immunizations are expensive. With the current state of the economy, some employers are going to plans that have higher deductibles and less preventative services, including immunizations. Before you and/or your children are immunized, call your insurance company and ask if the specific vaccines you plan to receive are covered. If they are not covered by your insurance, you can go to the local Dept of Public Health and receive them at a discounted rate (the Health dept can purchase vaccines for much less than outpatient clinics can get them for) and they can pass those savings onto the patients.
There are several other reasons why a charge is denied, but these are two of the more common ones. If you are familiar with your insurance benefits, you'll ask the right questions and this can ultimately mean that you pay less out of pocket for a service.

Stay tuned for upcoming posts on...how to be a good patient!

1 comment:

  1. I didn't know you started this!! Great information!

    ReplyDelete