The patient’s financial responsibility

Most MCO health insurance contracts require patients to pay a copayment, which is collected at the time of service. Copayments can range from $10 to $75 for office visits. They vary depending on whether the patient is seen by a PCP or specialist, in urgent care, or the emergency department. Office visits and prescription copayments do not count toward the yearly deductible. The medical assistant must make sure that the proper copayments are received and credited to patients’ accounts.

A deductible is a set dollar amount the policyholder is responsible for each year before the insurance company begins to reimburse the healthcare provider. The deductible amount is stated in the insurance policy.

Co-insurance means that the insured and the insurance company share the cost of covered medical services after the deductible has been met. The insurance company and the patient split the cost of the services. An 80/20 split is very common, especially for traditional insurance. This means that after the yearly deductible has been met, the insurance company pays 80% of the fee, and the insured pays 20%. The patient’s deductible or co-insurance responsibility is shown on the EOB.

To help patients understand their health insurance benefits, the medical assistant must be confident in defining the terms copayment, co-insurance, and deductible.

The medical office can contact the insurance company on the patient’s behalf to verify benefits, including how much of the deductible the patient has already paid in the calendar year, so the patient can be told what a procedure is likely to cost. Many procedures also require precertification (prior authorization), in which the insurance company confirms before the service is performed that it is covered and medically necessary.

Calculating the co-insurance and deductible

To find how much a patient owes when a plan has both a deductible and co-insurance, subtract the deductible from the total charge first, then apply the co-insurance percentage to what’s left.

Example: Calculating Mrs. Jones’ patient responsibility

Mrs. Anita Jones’ health insurance plan has a $500 annual deductible, after which the insurance company pays 95% of all charges - a 5% co-insurance expense for Mrs. Jones. She has incurred a $10,000 charge for cardiac surgery performed by her provider.

• Subtract the deductible from the total charge: $10,000 − $500 = $9,500 remains after the deductible.
• Apply the co-insurance percentage to that remainder: $9,500 × 0.05 = $475.
• Add the deductible back to find her total responsibility: $500 + $475 = $975.

Answer: Mrs. Jones owes $975 total; the insurance company pays the remaining $9,025.

Allowed amount

Another factor to be considered when determining the patient’s financial responsibility is whether or not the provider is a PAR provider. To become a participating provider in an insurance network, the provider must agree to accept the insurance plan’s fee schedule as payment in full for services rendered. This means that if the provider’s fee is higher than the plan’s allowed amount, the difference should be adjusted. For example, a provider may charge $80 for a Level I office visit; however, the insurance plan’s allowable amount may be only $60. Providers who are participating providers are obligated to adjust the difference between these two amounts - $20. The patient is not responsible for that $20. However, providers who are not participating providers can bill the patient for the $20 balance. Because contracts between insurance companies and providers vary greatly, it is important for the medical assistant to closely examine the EOB to ensure that the proper adjustments are made.

Discussing the patient’s financial responsibility

The guarantor is the person legally responsible for the entire bill. It is important that the patient and the guarantor understand what the financial responsibilities are for services provided. Some patients expect insurance to pay all costs simply because they are paying a premium. Often patients do not even read their insurance policies and have no idea what is and is not covered.

The medical assistant may need to educate patients about their policies and help them work with their insurance company to get answers to questions and make sure they are receiving all the benefits to which they are entitled. If problems come up with the insurance company, it is in the practice’s best interest to actively assist the patient. The medical billing staff is usually more knowledgeable than the patient is about health insurance. Helping patients with issues can help ensure that the provider is compensated for his or her services.

Always be sure to obtain the guarantor’s signature on an agreement to pay for services. Most patient information sheets have a section referring to the guarantor. A statement may be included that serves as an agreement to pay the costs of medical care. States have statutes that deal with guarantors, so be sure the office’s policies comply with those laws. It is especially important to secure a written agreement to pay for services when the care will be long term or involves costly treatment or surgical procedures.

Showing sensitivity when discussing the patient’s finances

Most patients use health insurance, but they do not always recognize that they will have financial obligations after the insurance plan pays its share. This is common among Medicare patients, who often feel they should have all their medical expenses paid because they have government insurance. Patients seeking care are also often in pain or discomfort, so their behavior may not be typical when a medical assistant raises the subject of payment.

Medical assistants should show patience and sensitivity when discussing a patient’s financial obligations, and patients should never be harassed to make a payment or forced into a payment arrangement. Offering a variety of payment options - including credit card and online payment - makes it easier for patients to meet their responsibilities.

Advance beneficiary notice (ABN)

Medicare does not cover some healthcare services, so the Advance beneficiary notice (ABN) is presented to patients in these circumstances. The ABN provides an option for patients to pay the provider’s fee in full to receive services that Medicare does not cover. Patients then decide whether they still want to receive the services from the provider and complete the information on the form.

Legal and ethical issues

From time-to-time patients may ask for a reduced fee after the insurance has already paid. If the provider is a participating provider with the health insurance plan, then he or she is obligated to follow the terms of the contract. This includes collecting the patient’s financial responsibility detailed in the EOB. The routine waiving of copays can be considered a fraudulent practice. The insurance plan can penalize the healthcare facility if a concerted effort is not made to collect the patient’s co-insurance and deductible amounts, thus not following the terms of the participating provider’s health insurance contract.

Patient-centered care

Most patients are unaware of their benefits and coverage through their insurance policies. The medical assistant should encourage patients to read the entire policy to become familiar with its limitations and exclusions. Inform patients that when they call the insurance company with questions, they should always write down the date, the time, and the name of the person with whom they spoke. Using email is helpful because a record of the correspondence can easily be saved or printed. Making sure that patients have a general understanding of their health insurance coverage is well worth the effort.

Often patients do not dispute the decision or question the insurance company when a claim is rejected or not paid in the expected amount. Encourage them to call the company and question rejections if they do not understand why the claim was denied.