Work with Your Provider to Reduce Costs
CRMA’s most difficult billing-related complaints are often the result of large bills patients receive due to an insurance deductible. In the last 10 years, health plans and employers have been shifting more and more medical costs to patients in the form of copays, deductibles, and coinsurance. Theoretically this is supposed to foster “patient engagement”. If a patient is going to share in the cost of a given medical decision, then that may motivate them to work with providers to make better decisions and minimize costs. In reality, most patients and providers don’t understand the details of their insurance well enough to be truly engaged and the result is often a surprise bill months after the time of service. This article will explain some of those details.
Almost all insurance claims start with a list of “procedure codes” submitted by your doctor to the health plan listing each service that was performed. Each procedure code is accompanied by a “diagnosis code” that explains why the procedure was done and many payers apply “medical necessity” checks to confirm the procedure (say, an office visit) was justified. Each procedure code has an “allowed amount” that determines how much the payer will pay for that procedure. This is determined by your physician’s contract with the insurance company. The amount charged by your physician plays no role in the billing process for the vast majority of insurance claims.
Let’s say the health plan determines that the office visit’s allowed amount was $100. If the patient’s plan has a copay of $25, it will deduct $25 from the payment to the physician and pay $75. The insurance company expects the physician to collect the $25 copay directly from the patient. Physicians dislike copays because they directly subtract from payments that otherwise were supposed to come from the insurance companies. If the patient didn’t pay the copay at the time of the visit, then the physician will have to bill the patient for it.
For deductibles, using the same case above the insurance company would typically allocate the entire $100 allowed amount to the deductible and expect the physician to collect from the patient directly. The amount charged to a patient deductible is governed by how much the insurance company would have paid the physician, not what the physician charges. Claims will continue to track to the deductible until the cumulative sum exceeds the deductible. When you start a calendar year, your first few claims will track to your deductible, the insurance company will pay your physician $0 for those claims, and your physician will have to collect the deductible amount from you directly. Once the deductible has been met, then the insurance company will pay all subsequent claims at the normal contracted rate.
Doctor’s Offices Rarely Know Copay and Deductible Details
Many patients assume the physician’s office staff will know their copay and deductible details. This is rarely the case. Physician offices deal with dozens of different insurance companies and each one can have dozens of health plans. There’s no consistency to how plans are designed, even within the same insurance company, and there’s no easy way for office staff to find out. Patients see multiple providers and the physician you’re seeing today doesn’t know what expenses may have already been charged to your deductible by other providers from previous visits. Even if staff knew your remaining deductible balance, it would be difficult to calculate how much would be charged to your deductible. The office staff would know their own physician’s charges, but charges play no role in insurance billing and most office staff don’t have access to what the insurance companies would pay their physicians. And even if they called the insurance company to find out, they wouldn’t necessarily know the exact procedure and diagnoses codes ahead of time so the best they could achieve would be an estimate.
Deductibles Rules are Complex
Most plans have complex rules governing how claims are charged to deductibles. For example, most plans offer “free annual physicals’; but the lab tests, blood draw, pap smear, EKG, vaccine injection, etc that are often done in conjunction with an annual physical are not necessarily “free”. Many plans track these to a patient’s deductible and they can often cost hundreds of dollars. Or sometimes a plan will make a distinction between tests ordered for screening purposes (i.e. patient doesn’t have any symptoms) versus tests ordered for diagnostic purposes (i.e. patient has symptoms). So the same lab or radiology test billed with a screening diagnosis code may incur no out-of-pocket cost whereas if it’s billed due to symptoms, it will track to the patient’s deductible. Unfortunately, some payers will pay for screening tests and some won’t so it’s not possible to minimize out-of-pocket costs by coding all tests as “screening”. If you call the insurance company and ask “Will xyz test be covered?” the customer service rep may confirm “yes” however they won’t necessarily tell you whether or not it tracks to your deductible unless you specifically ask.
Tips to Minimize Out of Pocket Costs
- Inform your physician’s office if your insurance plan changes, even if it’s within the same insurance company.
- If you have a deductible and are concerned about out-of-pocket cost, inform your physician at the time of service. Most physicians make treatment decisions without regard to your insurance but if you express concern for out-of-pocket cost, the physician can at least make some effort to minimize it.
- Confirm whether your health plan requires testing to be done at specific facilities. Hospital employees, for example, will often incur bigger out-of-pocket expense if they receive treatment or testing outside of their employer’s hospital. Some plans specify that lab testing go to certain labs, which can be a problem since all CRMA providers utilize the CRMA lab unless otherwise told.
- Be aware that some plans have frequency limits on certain wellness services, such as annual physicals and screening tests. Find out if your plan has any such restrictions. When scheduling, ensure your next wellness appointment is at least 366 days from your last one.
- If you call your insurance company to find out about coverage issues, be sure to ask the right questions. Don’t ask “Is this a covered service?” Instead, ask “Will I incur any out-of-pocket cost if this test is done by ____ provider for ___ reason on ____ date?”
- If you receive a bill from CRMA that looks “wrong”, call the CRMA billing office right away. Payers have filing deadlines and if you delay calling you may miss your opportunity to re-bill or appeal a claim.