Due to this year’s flu virus, chances are that many readers have recently visited a medical facility to seek some help. More than likely, many have a bill at home that relates to that visit. If you have questions on that bill or have ever had a question on a medical bill, this may be a good article for you to read.
Every day, our billing managers receive calls from patients who need help understanding their bill. Many questions relate to deductible amounts, co-pays, secondary insurance and denials. Having a good understanding of your insurance and the way claims are processed can be very beneficial to understanding your costs as a patient and possibly even reducing your overall healthcare costs in the future.
Let’s first discuss the process of medical billing. Suppose you recently were seen at an urgent care facility because you had the flu. You filled out the paperwork and the receptionist verified your insurance, which indicated you owed a co-pay of $25. You were seen in the back and got some excellent advice and care. While checking out, the receptionist informed you that your visit would be sent to your insurance carrier to be processed.
After your visit, most likely that day or the next, the urgent care would start working on preparing the paperwork necessary for your visit in to be processed through your insurance carrier. The form that summarizes your visit that day is reported on what is called a Health Insurance Claim Form (also known as a HCFA 1500). This form consists of your basic information, the medical facility’s information, and then a set of numbers and codes that will be used for processing. These codes play an important part in ensuring the claim is properly processed. Once this form reaches your insurance carrier electronically, the computers at the insurance company automatically process the claim. This claim is then batched with other claims related to that urgent care. The batch is then sent to a clearinghouse and remitted to the urgent care. This information is sent to the urgent care on an Explanation of Benefits (EOB). This is a document that summarizes the procedures performed, the charges for those procedures, what your insurance company has adjusted, what your insurance company has paid, and then finally what you as a patient owe. You as a patient should also receive an individual EOB.
This simplified example is important to understand when calling about questions on your medical bill. Medical facilities have very little input when it comes down to what you as a patient owe. Their job is to simply report the details of your visit and submit that for processing. What you owe as a patient is primarily dependent on the fees that your insurance company allows. With most insurance (house, car, life, etc…), the main benefit is to receive financial assistance when something catastrophic happens. Although this same principle applies to health insurance, health insurance offers an additional benefit: a reduction of fees allowed for the services rendered.
Here are three tips to ensure you are reducing your overall healthcare costs.
Tip 1 – Choose a facility that is contracted with your insurance. Insurance companies contract with health professionals to ensure their members (you as the patient) receive a discounted rate. Choosing an in-network medical facility is an important part in utilizing and reducing your healthcare costs through insurance. If you choose an out-of-network provider, chances are you will owe more. Call the medical facility or your insurance company before being seen to ensure they are contracted. Many insurance companies will contract with facilities at a case rate versus a fee for service rate. This means that no matter what the services performed are, the allowed charges will always be one low fee. A fee for service contract means that all procedures will be considered but will be reduced to a lower allowed fee schedule.
Tip 2 – Understand the basics of your insurance. Many policies include simple things such as co-pays at time of visit, co-pays as a percent of allowed billed amounts, and deductibles. These items should all be identified in that EOB that you received. If it is not clearly identifiable on that EOB, your insurance carrier will have the most information on that EOB. Call them with any questions you have about the amount you owe. If they do not prove to be helpful, the medical facility is a good second option to call for understanding.
Tip 3 – Your insurance coverage is determined when you sign up with your insurance company. Your medical provider does not determine your coverage or lack thereof. Make sure you understand your coverage and negotiate any changes at the time you buy or sign up for your health insurance. FBN
Written by Dr. Alex Conrad